EO12866_HD_P2_2060-AS16_ NPRM_FRN_20150327.docx 


ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 85, 86, 1036, 1037, 1042, 1065, 1066, and 1068

DEPARTMENT OF TRANSPORTATIONNATIONAL HIGHWAY TRAFFIC SAFETY ADMINISTRATION 

49 CFR Parts 523, 534, and 535

[EPA - HQ - OAR - 2014 - 0827; NHTSA- 2014-0132; FRL-XXXX-X]

RIN 2060-AS16; RIN 2127-AL52

Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles - Phase 2

AGENCIES:  Environmental Protection Agency (EPA) and National Highway Traffic Safety Administration (NHTSA).

ACTION:  Proposed rules.
__________________________________________________________________
SUMMARY:
EPA and NHTSA, on behalf of the Department of Transportation, are each proposing rules to establish a comprehensive Phase 2 Heavy-Duty National Program that will reduce greenhouse gas (GHG) emissions and fuel consumption for new on-road heavy-duty vehicles.  This technology-advancing program would phase in over the long-term, beginning in the 2018 model year and culminating in standards for model year 2027, responding to the President's directive on February 18, 2014, to develop new standards that will take us well into the next decade.  NHTSA's proposed fuel consumption standards and EPA's proposed carbon dioxide (CO2) emissions standards are tailored to each of four regulatory categories of heavy-duty vehicles: (1) Combination Tractors; (2) Trailers used in combination with those tractors; (3) Heavy-duty Pickup Trucks and Vans; and (4) Vocational Vehicles.  The proposal also includes separate standards for the engines that power combination tractors and vocational vehicles.  Certain proposed requirements for control of GHG emissions are exclusive to EPA programs.  These include EPA's proposed hydrofluorocarbon standards to control leakage from air conditioning systems in vocational vehicles, and EPA's proposed nitrous oxide (N2O) and methane (CH4) standards for heavy-duty engines.  Additionally, NHTSA is addressing misalignment in the Phase 1 standards between EPA and NHTSA to ensure there are no difference in compliance standards between the agencies.  In an effort to promote efficiency, the agencies are also proposing to amend their rules to modify reporting requirements, such as the method by which manufacturers submit pre-model, mid-model, and supplemental reports.  EPA's proposed HD Phase 2 GHG emission standards are authorized under the Clean Air Act and NHTSA's proposed HD Phase 2 fuel consumption standards authorized under the Energy Independence and Security Act of 2007.  These standards would begin with model year 2018 for trailers under EPA standards and 2021 for all of the other heavy-duty vehicle and engine categories.  The agencies estimate that the combined standards would reduce CO2 emissions by approximately 1 billion metric tons and save 1.8 billion barrels of oil over the life of vehicles and engines sold during the Phase 2 program, providing over $200 billion in net societal benefits. As noted, the proposal also includes certain EPA-specific provisions relating to control of emissions of pollutants other than GHGs.  EPA is seeking comment on non-GHG emission standards relating to the use of auxiliary power units installed in tractors.  In addition, EPA is proposing to clarify the classification of natural gas engines and other gaseous-fueled heavy-duty engines, and is proposing closed crankcase standards for emissions of all pollutants from natural gas heavy-duty engines.  EPA is also proposing technical amendments to EPA rules that apply to emissions of non-GHG pollutants from light-duty motor vehicles, marine diesel engines, and other nonroad engines and equipment.  Finally, EPA is proposing to require that rebuilt engines installed in new incomplete vehicles meet the emission standards applicable in the year of assembly, including all applicable standards for criteria pollutants.

DATES:
Comments: Comments on all aspects of this proposal must be received on or before [insert date 60 days after publication IN THE FEDERAL REGISTER].  Under the Paperwork Reduction Act, comments on the information collection provisions must be received by the Office of Management and Budget (OMB) on or before [Insert date 30 days after publication IN THE FEDERAL REGISTER].  See the SUPPLEMENTARY INFORMATION section on "Public Participation" for more information about written comments.

Public Hearings: EPA and NHTSA will jointly hold XX public hearings on the following dates: [Insert Dates], in [Insert Locations].  The hearings will start at XX local time and continue until everyone has had a chance to speak. See the SUPPLEMENTARY INFORMATION section on "Public Participation" for more information about the public hearings.

ADDRESSES: 
EPA and NHTSA have established dockets for this action under Docket ID No. EPA - HQ - OAR - 2014-0827 and NHTSA-2014-0132, respectively.  All documents in the docket are listed on the www.regulations.gov web site. Although listed in the index, some information is not publicly available, e.g., confidential business information 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 www.regulations.gov or in hard copy at the following locations:  
EPA:  EPA Docket Center, EPA/DC, EPA WJC West Building, 1301 Constitution Ave., N.W., Room 3334, 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.  
NHTSA:  Docket Management Facility, M-30, U.S. Department of Transportation, West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590.  The telephone number for the docket management facility is (202) 366-9324.  The docket management facility is open between 9 a.m. and 5 p.m. Eastern Time, Monday through Friday, except Federal Holidays.  

FOR FURTHER INFORMATION CONTACT:
EPA: Tad Wysor, Office of Transportation and Air Quality, Assessment and Standards Division (ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214-4332; email address: wysor.tad@epa.gov. 
NHTSA: Ryan Hagen or Analiese Marchesseault, Office of Chief Counsel, National Highway Traffic Safety Administration, 1200 New Jersey Avenue, SE, Washington, DC 20590. Telephone: (202) 366-2992; ryan.hagen@dot.gov or analiese.marchesseault@dot.gov.

SUPPLEMENTARY INFORMATION:  
Does this Action Apply to Me
This proposed action would affect companies that manufacture, sell, or import into the United States new heavy-duty engines and new Class 2b through 8 trucks, including combination tractors, all types of  buses, vocational vehicles including municipal, commercial, recreational vehicles, and commercial trailers as well as (3/4)-ton and 1-ton pickup trucks and vans.  The heavy-duty category incorporates all motor vehicles with a gross vehicle weight rating of 8,500 pounds or greater, and the engines that power them, except for medium-duty passenger vehicles already covered by the greenhouse gas standards and corporate average fuel economy standards issued for light-duty model year 2017-2025 vehicles.  Proposed regulated categories and entities include the following: 
Category
NAICS Code[a]
Examples of Potentially Affected Entities
Industry
336111
Motor Vehicle Manufacturers, Engine Manufacturers, Truck Manufacturers, Truck Trailer Manufacturers

336112


333618


336120


336212

Industry
541514
Commercial Importers of Vehicles and Vehicle Components

811112


811198

Industry
336111
Alternative Fuel Vehicle Converters

336112


422720


454312


541514


541690


811198

Note:
[a] North American Industry Classification System (NAICS).


This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely covered by these rules.  This table lists the types of entities that the agencies are aware may be regulated by this action.  Other types of entities not listed in the table could also be regulated.  To determine whether your activities are regulated by this action, you should carefully examine the applicability criteria in the referenced regulations.  You may direct questions regarding the applicability of this action to the persons listed in the preceding FOR FURTHER INFORMATION CONTACT section.

Did EPA Conduct a Peer Review before Issuing this Notice?
This regulatory action is supported by influential scientific information. Therefore, EPA is conducting a peer review consistent with OMB's Final Information Quality Bulletin for Peer Review.  As described in Section II.C.3, a peer review of updates to the vehicle simulation model (GEM) for the proposed Phase 2 standards has been initiated and will be completed before the final rule is completed.  This version of GEM is based on the model used for the Phase 1 rule, which was peer-reviewed by a panel of four independent subject matter experts (from academia and a national laboratory).  Upon completion, the peer review reports and the agency's response to the peer review comments will be placed in the docket for the Phase 2 rulemaking.
Executive Summary 
Commitment to Greenhouse Gas Emission Reductions and Vehicle Fuel Efficiency
As part of the Climate Action Plan announced in June 2013, the President directed the Environmental Protection Agency (EPA) and the Department of Transportation's (DOT) National Highway Traffic Safety Administration (NHTSA) to set the next round of standards to reduce greenhouse gas (GHG) emissions and improve fuel efficiency for medium- and heavy-duty vehicles.  More than 70 percent of the oil used in the United States and 28 percent of GHG emissions come from the transportation sector, and since 2009 NHTSA and EPA have worked with industry and states to develop ambitious, flexible standards for both the fuel economy and GHG emissions of light-duty vehicles and the fuel efficiency and GHG emissions of heavy-duty vehicles.[,]  The standards proposed here (referred to as Phase 2) would build on the light-duty vehicle standards spanning model years 2011 to 2025 and on the initial phase of standards (referred to as Phase 1) for new medium and heavy-duty vehicles (MDVs and HDVs) and engines in model years 2014 to 2018.  Throughout every stage of development for these programs, EPA and NHTSA (collectively, the agencies, or "we") have worked in close partnership not only with one another, but with the vehicle manufacturing industry, environmental community leaders, and the State of California among other entities to create a single, effective set of national standards.  
      Through two previous rulemakings, EPA and NHTSA have worked with the auto industry to develop new fuel economy and GHG emission standards for light-duty vehicles. Taken together, the light-duty vehicle standards span model years 2011 to 2025 and are the first significant improvement in fuel economy in approximately two decades.  Under the final program, average new car and light truck fuel economy is expected to double by 2025.  This is projected to save consumers $1.7 trillion at the pump  --  roughly $8,200 per vehicle for a MY2025 vehicle  --  reducing oil consumption by 2.2 million barrels a day in 2025 and slashing GHG emissions by 6 billion metric tons over the lifetime of the vehicles sold during this period.  These fuel economy standards are already delivering savings for American drivers.  Between model years 2008 and 2013, the unadjusted average test fuel economy of new passenger cars and light trucks sold in the United States has increased by about four miles per gallon. Altogether, light-duty vehicle fuel economy standards finalized after 2008 have already saved nearly one billion gallons of fuel and avoided more than 10 million tons of carbon dioxide emissions.  

      Similarly, EPA and NHTSA have previously developed joint GHG emission and fuel efficiency standards for MDVs and HDVs.  Prior to these Phase 1 standards, heavy-duty trucks and buses  -  from delivery vans to the largest tractor-trailers  -  were required to meet pollution standards for soot and smog-causing air pollutants, but no requirements existed for the fuel efficiency or carbon pollution from these vehicles.  By 2010, total fuel consumption and GHG emissions from MDVs and HDVs had been growing, and these vehicles accounted for 23 percent of total U.S. transportation-related GHG emissions.  In August 2011, the agencies finalized the groundbreaking Phase 1 standards for new MDVs and HDVs in model years 2014 through 2018.  This program, developed with support from the trucking and engine industries, the State of California, Environment Canada, and leaders from the environmental community, set standards that are expected to save a projected 530 million barrels of oil and reduce carbon emissions by about 270 million metric tons, representing one of the most significant programs available to reduce domestic emissions of GHGs.  The Phase 1 program, as well as the many additional actions called for in the President's 2013 Climate Action Plan including this Phase 2 rulemaking, not only result in meaningful decreases in GHG emissions, but support  -  indeed are critical for  -  United States leadership to encourage other countries to also achieve meaningful GHG reductions. 

     This NPRM builds on our commitment to robust collaboration with stakeholders and the public.  It follows an expansive and thorough outreach effort in which the agencies gathered input, data and views from many interested stakeholders, involving over 200 meetings with  heavy-duty vehicle and engine manufacturers, technology suppliers, trucking fleets, truck drivers, dealerships, environmental organizations, and state agencies.  As with the previous light-duty rules and the heavy-duty Phase 1 rule, the agencies have consulted frequently with the California Air Resources Board staff during the development of this Phase 2 proposal, given California's unique ability among the states to adopt their own GHG standards for on-highway engines and vehicles.  The agencies look forward to feedback and ongoing conversation following the release of this NPRM from all stakeholders  -  including through planned public hearings, written comments, and other opportunities for input.  
      
Overview of Phase 1 Medium- and Heavy-Duty Vehicle Standards
The President's direction to EPA and NHTSA to develop GHG emission and fuel efficiency standards for MDVs and HDVs resulted in the agencies' promulgation of the Phase 1 program in 2011, which covers new trucks and heavy vehicles in model years 2014 to 2018.  The Phase 1 program includes specific standards for combination tractors, heavy-duty pickup trucks and vans, and vocational vehicles, and includes separate standards for both vehicles and engines.  The program offers extensive flexibility, allowing manufacturers to reach standards through average fleet calculations, a mix of technologies, and the use of various credit and banking programs.  
The Phase 1 program was developed through close consultation with industry and other stakeholders, resulting in standards tailored to the specifics of each different class of vehicles and engines.    
   * Heavy-duty combination tractors.  Combination tractors  --  semi trucks that typically pull trailers  --  are regulated under nine subcategories based on weight class, cab type, and roof height.  These vehicles represent approximately two-thirds of all fuel consumption and GHG emissions from MDVs and HDVs.  

   * Heavy-duty pickup trucks and vans.  Heavy-duty pickup and van standards are based on a "work factor" attribute that combines a vehicle's payload, towing capabilities, and the presence of 4-wheel drive. These vehicles represent about 15 percent of the fuel consumption and GHG emissions from MDVs and HDVs.

   * Vocational vehicles.  Specialized vocational vehicles, which consist of a very wide variety of truck and bus types (e.g., delivery, refuse, utility, dump, cement, transit bus, shuttle bus, school bus, emergency vehicles, and recreational vehicles) are regulated in three subcategories based on engine classification.  These vehicles represent approximately 20 percent of the fuel consumption and GHG emissions from MDVs and HDVs.  The Phase 1 program includes EPA GHG standards for recreational vehicles, but not NHTSA fuel efficiency standards.      

   * Heavy-duty engines.  In addition to vehicle types, the Phase 1 rule has separate standards for heavy-duty engines, to assure they contribute to the overall vehicle reductions in fuel consumption and GHG emissions.  
The Phase 1 standards are premised on utilization of immediately available technologies. The Phase 1 program provides flexibilities that facilitate compliance.  These flexibilities help provide sufficient lead time for manufacturers to make necessary technological improvements and reduce the overall cost of the program, without compromising overall environmental and fuel consumption objectives.  The primary flexibility provisions are an engine averaging, banking, and trading (ABT) program and a vehicle ABT program.  These ABT programs allow for emission and/or fuel consumption credits to be averaged, banked, or traded within each of the regulatory subcategories.   However, credits are not allowed to be transferred across subcategories.
The Phase 1 program is projected to save 530 million barrels of oil and avoid 270 million metric tons of GHG emissions.  At the same time, the program is projected to produce $50 billion in fuel savings, and net societal benefits of $49 billion. Today, the Phase 1 fuel efficiency and GHG reduction standards are already reducing GHG emissions and U.S. oil consumption, and producing fuel savings for America's trucking industry. 
Overview of Proposed Phase 2 Medium- and Heavy-Duty Vehicle Standards
   The Phase 2 GHG and fuel efficiency standards for MDVs and HDVs are a critical next step in improving fuel efficiency and reducing GHG.  The proposed Phase 2 standards carry forward our commitment to meaningful collaboration with stakeholders and the public, as they build on more than 200 meetings with manufacturers, suppliers, trucking fleets, dealerships, state air quality agencies, non-governmental organizations (NGOs), and other stakeholders to identify and understand the opportunities and challenges involved with this next level of fuel saving technology.  These meetings have been invaluable to the agencies, enabling the development of a proposal that appropriately balances all potential impacts and effectively minimizes the possibility of unintended consequences.
   Phase 2 would include technology-advancing standards that would phase in over the long-term (through model year 2027) to result in an ambitious, yet achievable program that would allow manufacturers to meet standards through a mix of different technologies at reasonable cost.  The Phase 2 standards would maintain the underlying regulatory structure developed in the Phase 1 program, such as the general categorization of MDVs and HDVs and the separate standards for vehicles and engines.  However, the Phase 2 program would build on and advance  Phase 1 in a number of important ways including: basing standards not only on currently available technologies but also on utilization of technologies now under development or not yet widely deployed while providing significant lead time to assure adequate time to develop, test, and phase in these controls; developing standards for trailers; further encouraging innovation and providing flexibility; including vehicles produced by small business manufacturers; incorporating enhanced test procedures that (among other things) allow individual drivetrain and powertrain performance to be reflected in the vehicle certification process; and using an expanded and improved compliance simulation model.     
* Strengthening standards to account for ongoing technological advancements.  Relative to the baseline as of the end of Phase 1, the proposed standards (labeled Alternative 3 or the "preferred alternative" throughout this proposal) would achieve vehicle fuel savings of up to 8 percent and 24 percent, depending on the vehicle category.  While costs are higher than for Phase 1, benefits greatly exceed costs, and payback periods are short, meaning that consumers will see substantial net savings over the vehicle lifetime.  Payback is estimated at about two years for tractors and trailers, about five years for vocational vehicles, and about three years for heavy-duty pickups and vans.  The agencies are further proposing to phase in these MY 2027 standards with interim standards for model years 2021 and 2024 (and for certain types of trailers, EPA is proposing model year 2018 phase-in standards as well).  
   
   In addition to the proposed standards, the agencies are considering another alternative (Alternative 4), which would achieve the same performance as the proposed standards 2-3 years earlier, leading to overall reductions in fuel use and greenhouse gas emissions.  The agencies believe Alternative 4 has the potential to be the maximum feasible and appropriate alternative; however, based on the evidence currently before us, EPA and NHTSA have outstanding questions regarding relative risks and benefits of Alternative 4 due to the timeframe envisioned by that alternative.   The agencies are proposing Alternative 3 based on their analyses and projections, and taking into account the agencies' respective statutory considerations.  The comments that the agencies receive on this NPRM will be instrumental in helping us determine standards that are appropriate (for EPA) and maximum feasible (for NHTSA), given the discretion that both agencies have under our respective statutes.  Therefore, the agencies have presented different options and raised specific questions throughout the NPRM, focusing in particular on better understanding the perspectives on the feasible adoption rates of different technologies, considering associated costs and necessary lead time.  
      
* Setting standards for trailers for the first time.  In addition to retaining the vehicle and engine categories covered in the Phase 1 program, which include semi tractors, heavy-duty pickup trucks and work vans, vocational vehicles, and separate standards for heavy-duty engines, the Phase 2 standards propose fuel efficiency and GHG emission standards for trailers used in combination with tractors.  Although the agencies are not proposing standards for all trailer types, the majority of new trailers would be covered. 
      
* Encouraging technological innovation while providing flexibility and options for manufacturers.  For each category of HDVs, the standards would set performance targets that allow manufacturers to achieve reductions through a mix of different technologies and leave manufacturers free to choose any means of compliance.  For tractors and vocational vehicles, enhanced test procedures and an expanded and improved compliance simulation model enable the proposed vehicle standards to encompass more of the complete vehicle and to account for engine, transmission and driveline improvements than the Phase 1 program.  With the addition of the powertrain and driveline to the compliance model, representative drive cycles and vehicle baseline configurations become critically important to assure the standards promote technologies that improve real world fuel efficiency and GHG emissions.  This proposal updates drive cycles and vehicle configurations to better reflect real world operation.  For tractor standards, for example, different combinations of improvements like advanced aerodynamics, engine improvements and waste-heat recovery, automated transmission, and lower rolling resistance tires and automatic tire inflation can be used to meet standards.  Additionally, the agencies' analyses indicate that this proposal should have no adverse impact on vehicle or engine safety.
      
* Providing flexibilities to help minimize effect on small businesses.  All small businesses are exempt from the Phase 1 standards.  The agencies are proposing to regulate small business entities under Phase 2 (notably certain trailer manufacturers), but have conducted extensive proceedings pursuant to Section 609 of the Regulatory Flexibility Act, and otherwise have engaged in extensive consultation with stakeholders, and developed a proposed approach to provide targeted flexibilities geared toward helping small businesses comply with the Phase 2 standards.  Specifically, the agencies are proposing to delay all new requirements by one year and simplify certification requirements for small businesses, and are further proposing additional specific flexibilities adapted to particular types of trailers. 

Summary of the Proposed Phase 2 Medium- and Heavy-Duty Vehicle Rule Impacts to Fuel Consumption, GHG emissions, Benefits and Costs for Model Years 2018  -  2029, Based on Analysis A
All Model Years 2018  -  2029[a]
                                      3%
                                      7%
Fuel Reductions (billion gallons)
                                    73 - 77
GHG Reductions (MMTCO2eq)
                                   932 - 990
                                       
Pre-Tax Fuel Savings ($billion)
                                   165 - 175
                                    89 - 94
Discounted Technology Costs ($billion)
                                   25 - 25.4
                                  16.8 -17.1
Value of reduced emissions ($billion)
                                  38.2 - 40.1
                                   32.3 - 34
Total Costs  ($billion)
                                  30.3 - 30.8
                                  19.8 - 20.2
Total Benefits  ($billion)
                                   229 - 243
                                   135 - 143
Net Benefits  ($billion)
                                   199 - 212
                                   116 - 123
[a] Range reflects two reference case assumptions, one that projects very little improvement in new vehicle fuel efficiency absent new standards, and the second that projects more significant improvements in vehicle fuel efficiency absent new standards.

Summary of the Proposed Phase 2 Medium- and Heavy-Duty Vehicle Fuel and GHG Reductions, Program Costs, Benefits and Net Benefits in Calendar Years 2035 and 2050[a]

                                     2035
                                     2050
Fuel Reductions (Billion Gallons)
                                      9.3
                                     13.4
GHG Reduction (MMT, CO2eq)
                                     127.1
                                     183.4
Vehicle Program Costs (including Maintenance; Billions of 2012$)
                                     -$6.0
                                     -$7.1
Fuel Savings (Pre-Tax; Billions of 2012$)
                                     $37.2
                                     $57.5
Benefits (Billions of 2012$)
                                     $20.5
                                     $32.9
Net Benefits (Billions of 2012$)
                                     $51.7
                                     $83.2
    [a] Benefits and net benefits use the 3 percent average SCC-CO2 value applied only to CO2 emissions; GHG reductions include CO2, CH4, N2O and HFC reductions.
Summary of the Proposed Phase 2 Medium- and Heavy-Duty Vehicle Program Expected Per-Vehicle Fuel Savings, GHG Emission Reductions, and Cost for Key Vehicle Categories
                                       
                                    MY 2021
                                    MY 2024
                                    MY 2027
Maximum Vehicle Fuel Savings and GHG Reduction (%)
                                       
                                       
                                       
Tractors
                                      13
                                      20
                                      24
Trailers[a]
                                       4
                                       6
                                       8
Vocational Vehicles
                                       7
                                      11
                                      16
Pick-ups/Vans
                                      2.5
                                      10
                                      16
Per Vehicle Cost ($)[b] 
(% Increase in Typical Vehicle Price)[c] 
                                       
                                       
                                       
Tractors
                                  $6,710 (7%)
                                 $9,940 (10%)
                                 $11,680 (12%)
Trailers
                                   $900 (4%)
                                  $1,010 (4%)
                                  $1,170 (5%)
Vocational Vehicles
                                  $1,150 (2%)
                                  $1,770 (3%)
                                  $3,380 (5%)
Pick-ups/Vans
                                   $520 (1%)
                                   $950 (2%)
                                  $1,340 (3%)
     a. Note that the proposed EPA standards for some categories of box trailers begin in model year 2018.
     [b] All engine costs are included
     [c] For this table, we use a typical vehicle price today of $100,000 for tractors, $25,000 for trailers, $70,000 for vocational vehicles and $40,000 for HD pickups/vans

Payback Periods for MY2027 Vehicles under the Proposed Standards (Payback Occurs in the Year Shown; using 7% Discounting)

Proposed Standards
Tractors/Trailers
                                      2nd
Vocational Vehicles
                                      6th
Pickups/Vans
                                      3rd

Issues Addressed in this NPRM
      This NPRM contains extensive discussion of the background, elements, and implications of the proposed Phase 2 program.  Section I includes information on the MDV and HDV industry, related regulatory and non-regulatory programs, summaries of Phase 1 and Phase 2 programs, costs and benefits of the proposed standards, and relevant statutory authority for EPA and NHTSA.  Section II discusses vehicle simulation, engine standards, and test procedures.  Sections III, IV, V, and VI detail the proposed standards for combination tractors, trailers, vocational vehicles, and heavy-duty pickup trucks and vans.  Sections VII and VIII discuss aggregate GHG impacts, fuel consumption impacts, climate impacts, and impacts on non-GHG emissions.  Section IX evaluates the economic impacts of the proposed standards.  Sections X, XI, and XII present the alternatives analyses, consideration of natural gas vehicles, and the agencies' initial response to recommendations from the Academy of Sciences.  Finally, Sections XIII and XIV discuss the changes that the proposed Phase 2 NPRM would have on Phase 1 standards and other regulatory provisions.  In addition to this preamble, the agencies have also prepared a joint Draft Regulatory Impact Analysis (DRIA) which is available on our respective websites and in the public docket for this rulemaking which provides additional data, analysis and discussion of the proposed standards and the alternatives analyzed by the agencies.  We request comment on all aspects of this proposed rulemaking, including the DRIA.
      

Table of Contents
I. Overview	
A. Background	
B. Summary of Phase 1 Program	
C. Summary of the Proposed Phase 2 Standards and Requirements	
D. Summary of the Costs and Benefits of the Proposed Rule	
E. EPA and NHTSA Statutory Authorities	
F. Other Issues	

II. Vehicle Simulation, Engine Standards and Test Procedures	
A. Introduction and Summary of Phase 1 and Phase 2 Regulatory Structures	
B. Phase 2 Proposed Regulatory Structure	
C. Proposed Vehicle Simulation Model  -  Phase II GEM 	
D. Proposed Engine Test Procedures and Engine Standards	

III. Class 7 and 8 Combination Tractors	
A. Summary of the Phase 1 Tractor Program	
B. Overview of the Proposed Phase 2 Tractor Program	
C. Proposed Phase 2 Tractor Standards	
D. Feasibility of the Proposed Tractor Standards	
E. Proposed Compliance Provisions for Tractors	
F. Flexibility Provisions	

IV. Trailers	
A. Summary of Trailer Consideration in Phase 1	
B. The Trailer Industry	
C. Proposed Phase 2 Trailer Standards	
D. Feasibility of the Proposed Trailer Standards	
E. Alternative Standards and Feasibility Considered	
F. Trailer Standards: Compliance and Flexibilities	

V. Class 2b-8 Vocational Vehicles	
A. Summary of Phase 1 Vocational Vehicle Standards	
B. Proposed Phase 2 Standards for Vocational Vehicles	
C. Feasibility of the Proposed Vocational Vehicle Standards	
D. Alternative Vocational Vehicle Standards Considered	
E. Compliance Provisions for Vocational Vehicles	

VI. Heavy-duty Pickups and Vans	
A. Introduction and Summary of Phase 1 HD Pickup and Van Standards	
B. Proposed HD Pickup and Van Standards	
C. Feasibility of Pickup and Van Standards	
D. DOT CAFE Model Analysis of the Regulatory Alternatives for HD Pickups and Vans	
E. Compliance and Flexibility for HD Pickup and Van Standards	

VII. Aggregate GHG, Fuel Consumption, and Climate Impacts	
A. What Methodologies Did the Agencies Use to Project GHG Emissions and Fuel Consumption Impacts?	
B. Analysis of Fuel Consumption and GHG Emissions Impacts Resulting from Proposed Standards and Alternative 4	
C. What Are the Projected Reductions in Fuel Consumption and GHG Emissions?	
D. Climate Impacts and Indicators	

VIII. How Will This Proposed Action Impact Non-GHG Emissions and Their Associated Effects?	
A. Emissions Inventory Impacts	
B. Health Effects of Non-GHG Pollutants	
C. Environmental Effects of Non-GHG Pollutants	
D. Air Quality Impacts of Non-GHG Pollutants	

IX. Economic and Other Impacts	
A. Conceptual Framework	
B. Vehicle-Related Costs Associated with the Program	
C. Changes in Fuel Consumption and Expenditures	
D. Maintenance Expenditures	
E. Analysis of the Rebound Effect	
F. Impact on Class Shifting, Fleet Turnover, and Sales	
G. Monetized GHG Impacts	
H. Monetized Non-GHG Health Impacts	
I. Energy Security Impacts	
J. Other Impacts	
K. Summary of Benefits and Costs	
L. Employment Impacts	
M. Cost of Ownership and Payback Analysis	

X. Analysis of the Alternatives	
A. What Are the Alternatives that the Agencies Considered?	
B. How Do These Alternatives Compare in Overall Fuel Consumption and GHG Emissions Reductions and in Benefits and Costs?	

XI. Natural Gas Vehicles and Engines	
A. Natural Gas Engine and Vehicle Technology	
B. GHG Lifecycle Analysis for Natural Gas Vehicles	
C. Projected Use of LNG and CNG	
D. Natural Gas Emission Control Measures	
E. Dimethyl Ether	

XII. Agencies' Response to Recommendations from the National Academy of Sciences	
A. Overview	
B. Major Findings and Recommendations of the NAS Phase 2 First Report	

XIII. Amendments to Phase 1 Standards	
A. EPA Amendments	
B. Other Compliance Provisions for NHTSA	

XIV. Other Proposed Regulatory Provisions	
A. Proposed Amendments Related to Heavy-Duty Highway Engines and Vehicles	
B. Applying the General Compliance Provisions of 40 CFR Part 1068 to Light-Duty Vehicles, Light-Duty Trucks, Chassis-certified Class 2b and 3 Heavy-Duty Vehicles and Highway Motorcycles	
C. Amendments to General Compliance Provisions in 40 CFR Part 1068	
D. Amendments to Light-Duty Greenhouse Gas Program Requirements	
E. Amendments to Highway and Nonroad Test Procedures and Certification Requirements	
F. Amendments Related to Nonroad Diesel Engines in 40 CFR Part 1039	
G. Amendments Related to Marine Diesel Engines in 40 CFR Part 1042	
H. Amendments Related to Locomotives in 40 CFR Part 1033	
I. Miscellaneous EPA Amendments	
J. Amending 49 CFR Parts 512 and 537 to Allow Electronic Submissions and Defining Data Formats for Light-Duty Vehicle Corporate Average Fuel Economy (CAFE) Reports	

XV. Statutory and Executive Order Reviews	
A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review	
B. National Environmental Policy Act	
C. Paperwork Reduction Act	
D. Regulatory Flexibility Act	
E. Unfunded Mandates Reform Act	
F. Executive Order 13132: Federalism	
G. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments	
H. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks	
I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use	
J. National Technology Transfer and Advancement Act and 1 CFR Part 51	
K. Executive Order 12898:  Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations	

XVI. EPA and NHTSA Statutory Authorities	
A. EPA	
B. NHTSA
C. List of Subjects	
  
  

I.  Overview
Background
This background and summary of the proposed Phase 2 GHG emissions and fuel efficiency standards includes an overview of the heavy-duty truck industry and related regulatory and non-regulatory programs, a summary of the Phase 1 GHG emissions and fuel efficiency program, a summary of the proposed Phase 2 standards and requirements, a summary of the costs and benefits of the proposed Phase 2 standards, discussion of EPA and NHTSA statutory authorities, and other issues.
For purposes of this preamble, the terms "heavy-duty" or "HD" are used to apply to all highway vehicles and engines that are not within the range of light-duty passenger cars, light-duty trucks, and medium-duty passenger vehicles (MDPV) covered by separate GHG and Corporate Average Fuel Economy (CAFE) standards.  They do not include motorcycles.  Thus, in this rulemaking, unless specified otherwise, the heavy-duty category incorporates all vehicles with a gross vehicle weight rating above 8,500 pounds, and the engines that power them, except for MDPVs.[,]
      Consistent with the President's direction, over the past two years as we have developed this proposal, the agencies have met on an on-going basis with a very large number of diverse stakeholders.  This includes meetings, and in many cases site visits, with truck, trailer, and engine manufacturers; technology supplier companies and their trade associations (e.g., transmissions, drive lines, fuel systems, turbochargers, tires, catalysts, and many others); line haul and vocational trucking firms and trucking associations; the trucking industries owner-operator association; truck dealerships and dealers associations; trailer manufacturers and their trade association; non-governmental organizations (NGOs, including environmental NGOs, national security NGOs, and consumer advocacy NGOs); state air quality agencies; manufacturing labor unions; and many other stakeholders.  In particular, NHTSA and EPA have consulted on an on-going basis with the California Air Resources Board (CARB) over the past two years as we have developed the Phase 2 proposal.   In addition, CARB staff and managers have also participated with EPA and NHTSA in meetings with many external stakeholders, in particular with vehicle OEMs and technology suppliers.
      NHTSA and EPA staff also participated in a large number of technical and policy conferences over the past two years related to the technological, economic, and environmental aspects of the heavy-duty trucking industry.  The agencies also met with regulatory counterparts from several other nations who either have already or are considering establishing fuel consumption or GHG requirements, including outreach with representatives from the governments of Canada, the European Commission, Japan, and China.
      These comprehensive outreach actions by the agencies provided us with information to assist in our identification of potential technologies that can be used to reduce heavy-duty GHG emissions and improve fuel efficiency.  The outreach has also helped the agencies to identify and understand the opportunities and challenges involved with the proposed standards for the heavy-duty trucks, trailers, and engines detailed in this preamble, including time needed for implementation of various technologies and potential costs and fuel savings.  The scope of this outreach effort to gather input for the proposal included well over 200 meetings with stakeholders.  These meetings and conferences have been invaluable to the agencies.  We believe they have enabled us to develop this proposal in such a way as to appropriately balance all of the potential impacts, to minimize the possibility of unintended consequences, and to ensure that we are requesting comment on a wide range of issues that can inform the final rule.   
    Brief Overview of the Heavy-Duty Truck Industry
      The heavy-duty sector is diverse in several respects, including the types of manufacturing companies involved, the range of sizes of trucks and engines they produce, the types of work for which the trucks are designed, and the regulatory history of different subcategories of vehicles and engines.  The current heavy-duty fleet encompasses vehicles from the "18-wheeler" combination tractors one sees on the highway to the largest pickup trucks and vans, as well as vocational vehicles covering a range between these extremes.  Together, the HD sector spans a wide range of vehicles with often specialized form and function.  A primary indicator of the diversity among heavy-duty trucks is the range of load-carrying capability across the industry.  The heavy-duty truck sector is often subdivided by vehicle weight classifications, as defined by the vehicle's gross vehicle weight rating (GVWR), which is a measure of the combined curb (empty) weight and cargo carrying capacity of the truck.  Table I-1 below outlines the vehicle weight classifications commonly used for many years for a variety of purposes by businesses and by several Federal agencies, including the Department of Transportation, the Environmental Protection Agency, the Department of Commerce, and the Internal Revenue Service.
Table I-1Vehicle Weight Classification
Class
2b
3
4
5
6
7
8
GVWR (lb)
8,501 -10,000
10,001-14,000
14,001-16,000
16,001-19,500
19,501 -26,000
26,001-33,000
> 33,001
In the framework of these vehicle weight classifications, the heavy-duty truck sector refers to "Class 2b" through "Class 8" vehicles and the engines that power those vehicles.  
Unlike light-duty vehicles, which are primarily used for transporting passengers for personal travel, heavy-duty vehicles fill much more diverse operator needs.  Heavy-duty pickup trucks and vans (Classes 2b and 3) are used chiefly as work trucks and vans, and as shuttle vans, as well as for personal transportation, with an average annual mileage in the range of 15,000 miles.  The rest of the heavy-duty sector is used for carrying cargo and/or performing specialized tasks.  "Vocational" vehicles, which may span Classes 2b through 8, vary widely in size, including smaller and larger van trucks, utility "bucket" trucks, tank trucks, refuse trucks, urban and over-the-road buses, fire trucks, flat-bed trucks, and dump trucks, among others.  The annual mileage of these vehicles is as varied as their uses, but for the most part tends to fall in between heavy-duty pickups/vans and the large combination tractors, typically from 15,000 to 150,000 miles per year.  
Class 7 and 8 combination tractor-trailers  -  some equipped with sleeper cabs and some not -- are primarily used for freight transportation.  They are sold as tractors and operate with one or more trailers that can carry up to 50,000 pounds or more of payload, consuming significant quantities of fuel and producing significant amounts of GHG emissions.  Together, Class 7 and 8 tractors and trailers account for approximately two-thirds of the heavy-duty sector's total CO2 emissions and fuel consumption.  Trailer designs vary significantly, reflecting the wide variety of cargo types.  However, the most common types of trailers are box vans (dry and refrigerated), which are a focus of this Phase 2 rulemaking.  The tractor-trailers used in combination applications can and frequently do travel more than 150,000 miles per year and can operate for 20-30 years.
EPA and NHTSA have designed our respective proposed standards in careful consideration of the diversity and complexity of the heavy-duty truck industry, as discussed in Section I. B. 
    Related Regulatory and Non-Regulatory Programs
History of EPA's Heavy-Duty Regulatory Program and Impacts of Greenhouse Gases on Climate Change
This subsection provides an overview of the history of EPA's heavy-duty regulatory program and impacts of greenhouse gases on climate change.
History of EPA's Heavy-Duty Regulatory Program 
Since the 1980s, EPA has acted several times to address tailpipe emissions of criteria pollutants and air toxics from heavy-duty vehicles and engines.  During the last two decades these programs have primarily addressed emissions of particulate matter (PM) and the primary ozone precursors, hydrocarbons (HC) and oxides of nitrogen (NOX).  These programs, which have successfully achieved significant and cost-effective reductions in emissions and associated health and welfare benefits to the nation, were an important basis of the Phase 1 program.  See e.g. 66 FR 5002, 5008, 5011-12 (January 18, 2001) (detailing substantial public health benefits of controls of criteria pollutants from heavy-duty diesel engines, including bringing areas into attainment with primary (public health) PM NAAQS, or contributing substantially to such attainment); National Petrochemical Refiners Association v. EPA, 287 F. 3d 1130, 1134 (D.C. Cir. 2002) (referring to the "dramatic reductions" in criteria pollutant emissions resulting from those on-highway heavy-duty engine standards, and upholding all of the standards).
As required by the Clean Air Act (CAA), the emission standards implemented by these programs include standards that apply at the time that the vehicle or engine is sold and continue to apply in actual use.  EPA's overall program goal has always been to achieve emissions reductions from the complete vehicles that operate on our roads. The agency has often accomplished this goal for many heavy-duty truck categories by regulating heavy-duty engine emissions.  A key part of this success has been the development over many years of a well-established, representative, and robust set of engine test procedures that industry and EPA now use routinely to measure emissions and determine compliance with emission standards.  These test procedures in turn serve the overall compliance program that EPA implements to help ensure that emissions reductions are being achieved.  By isolating the engine from the many variables involved when the engine is installed and operated in a HD vehicle, EPA has been able to accurately address the contribution of the engine alone to overall emissions.
Impacts of Greenhouse Gases on Climate Change
In 2009, the EPA Administrator issued the document known as the Endangerment Finding under CAA Section 202(a)(1).  In the Endangerment Finding, which focused on public health and public welfare impacts within the United States, the Administrator found that elevated concentrations of GHG emissions in the atmosphere may reasonably be anticipated to endanger public health and welfare of current and future generations.  See also Coalition for Responsible Regulation v. EPA, 684 F. 3d 102, 117-123 (D.C. Cir. 2012 (upholding the endangerment finding in all respects).   The following sections summarize the key information included in the Endangerment Finding.
Climate change caused by human emissions of GHGs threatens public health in multiple ways. By raising average temperatures, climate change increases the likelihood of heat waves, which are associated with increased deaths and illnesses. While climate change also increases the likelihood of reductions in cold-related mortality, evidence indicates that the increases in heat mortality will be larger than the decreases in cold mortality in the United States.  Compared to a future without climate change, climate change is expected to increase ozone pollution over broad areas of the U.S., including in the largest metropolitan areas with the worst ozone problems, and thereby increase the risk of morbidity and mortality.  Other public health threats also stem from projected increases in intensity or frequency of extreme weather associated with climate change, such as increased hurricane intensity, increased frequency of intense storms, and heavy precipitation. Increased coastal storms and storm surges due to rising sea levels are expected to cause increased drownings and other health impacts.  Children, the elderly, and the poor are among the most vulnerable to these climate-related health effects.  See also 79 FR 75242 (Dec. 17, 2014) (climate change, and temperature increases in particular, likely to increase O3 (Ozone) pollution "over broad areas of the U.S., including the worst largest metropolitan areas with the worst O3 problems, increas[ing] the risk of morbidity and mortality").
Climate change caused by human emissions of GHGs also threatens public welfare in multiple ways. Climate changes are expected to place large areas of the country at serious risk of reduced water supplies, increased water pollution, and increased occurrence of extreme events such as floods and droughts. Coastal areas are expected to face increased risks from storm and flooding damage to property, as well as adverse impacts from rising sea level, such as land loss due to inundation, erosion, wetland submergence and habitat loss.  Climate change is expected to result in an increase in peak electricity demand, and extreme weather from climate change threatens energy, transportation, and water resource infrastructure.  Climate change may exacerbate ongoing environmental pressures in certain settlements, particularly in Alaskan indigenous communities. Climate change also is very likely to fundamentally rearrange U.S. ecosystems over the 21st century.  Though some benefits may balance adverse effects on agriculture and forestry in the next few decades, the body of evidence points towards increasing risks of net adverse impacts on U.S. food production, agriculture and forest productivity as temperature continues to rise.  These impacts are global and may exacerbate problems outside the U.S. that raise humanitarian, trade, and national security issues for the U.S.  See also 79 FR 75382 (Dec. 17, 2014) (welfare effects of O3 increases due to climate change, with emphasis on increased wildfires).
As outlined in Section VIII.A. of the 2009 Endangerment Finding, EPA's approach to providing the technical and scientific information to inform the Administrator's judgment regarding the question of whether GHGs endanger public health and welfare was to rely primarily upon the recent, major assessments by the U.S. Global Change Research Program (USGCRP), the Intergovernmental Panel on Climate Change (IPCC), and the National Research Council (NRC) of the National Academies.  These assessments addressed the scientific issues that EPA was required to examine, were comprehensive in their coverage of the GHG and climate change issues, and underwent rigorous and exacting peer review by the expert community, as well as rigorous levels of U.S. government review. Since the administrative record concerning the Endangerment Finding closed following EPA's 2010 Reconsideration Denial, a number of such assessments have been released. These assessments include the IPCC's 2012 "Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation" (SREX) and the 2013-2014 Fifth Assessment Report (AR5), the USGCRP's 2014 "Climate Change Impacts in the United States" (Climate Change Impacts), and the NRC's 2010 "Ocean Acidification: A National Strategy to Meet the Challenges of a Changing Ocean" (Ocean Acidification), 2011 "Report on Climate Stabilization Targets: Emissions, Concentrations, and Impacts over Decades to Millennia" (Climate Stabilization Targets), 2011 "National Security Implications for U.S. Naval Forces" (National Security Implications), 2011 "Understanding Earth's Deep Past: Lessons for Our Climate Future" (Understanding Earth's Deep Past), 2012 "Sea Level Rise for the Coasts of California, Oregon, and Washington: Past, Present, and Future", 2012 "Climate and Social Stress: Implications for Security Analysis" (Climate and Social Stress), and 2013 "Abrupt Impacts of Climate Change" (Abrupt Impacts) assessments.
EPA has reviewed these new assessments and finds that the improved understanding of the climate system they present strengthens the case that GHG emissions endanger public health and welfare.
In addition, these assessments highlight the urgency of the situation as the concentration of CO2 in the atmosphere continues to rise. Absent a reduction in emissions, a recent National Research Council of the National Academies assessment projected that concentrations by the end of the century would increase to levels that the Earth has not experienced for millions of years.  In fact, that assessment stated that "the magnitude and rate of the present greenhouse gas increase place the climate system in what could be one of the most severe increases in radiative forcing of the global climate system in Earth history."  What this means, as stated in another NRC assessment, is that:
      Emissions of carbon dioxide from the burning of fossil fuels have ushered in a new epoch where human activities will largely determine the evolution of Earth's climate. Because carbon dioxide in the atmosphere is long lived, it can effectively lock Earth and future generations into a range of impacts, some of which could become very severe. Therefore, emission reductions choices made today matter in determining impacts experienced not just over the next few decades, but in the coming centuries and millennia. 
Moreover, due to the time-lags inherent in the Earth's climate, the Climate Stabilization Targets assessment notes that the full warming from any given concentration of CO2 reached will not be realized for several centuries.
The recently released USGCRP "National Climate Assessment" emphasizes that climate change is already happening now and it is happening in the United States. The assessment documents the increases in some extreme weather and climate events in recent decades, the damage and disruption to infrastructure and agriculture, and projects continued increases in impacts across a wide range of peoples, sectors, and ecosystems.
These assessments underscore the urgency of reducing emissions now: Today's emissions will otherwise lead to raised atmospheric concentrations for thousands of years, and raised Earth system temperatures for even longer.  Emission reductions today will benefit the public health and public welfare of current and future generations.
Finally, it should be noted that the concentration of carbon dioxide in the atmosphere continues to rise dramatically. In 2009, the year of the Endangerment Finding, the average concentration of carbon dioxide as measured on top of Mauna Loa was 387 parts per million.  The average concentration in 2013 was 396 parts per million.  And the monthly concentration in April of 2014 was 401 parts per million, the first time a monthly average has exceeded 400 parts per million since record keeping began at Mauna Loa in 1958, and for at least the past 800,000 years according to ice core records.   
The NHTSA and EPA Light-duty National GHG and Fuel Economy Program
On May 7, 2010, EPA and NHTSA finalized the first-ever National Program for light-duty cars and trucks, which set GHG emissions and fuel economy standards for model years 2012-2016 (see 75 FR 25324).  More recently, the agencies adopted even stricter standards for model years 2017 and later (77 FR 62624, October 15, 2012).  The agencies have used the light-duty National Program as a model for the HD National Program in several respects.  This is most apparent in the case of heavy-duty pickups and vans, which are similar in several ways to the light-duty trucks addressed in the light-duty National Program both technologically as well as in terms of how they are manufactured (i.e., the same company often makes both the vehicle and the engine, and several light-duty manufacturers also manufacture HD pickups and vans),  For HD pickups and vans, there are close parallels to the light-duty program in how the agencies have developed our respective heavy-duty standards and compliance structures. However, HD pickups and vans are true work vehicles that are designed for much higher towing and payload capabilities than are light-duty pickups and vans.  The technologies applied to light-duty trucks are not all applicable to heavy-duty pickups and vans at the same adoption rates, and the technologies often produce a lower percent reduction in CO2 emissions and fuel consumption when used in heavy-duty vehicles.  Another difference between the light-duty and the heavy-duty standards is that each agency adopts heavy-duty standards based on attributes other than vehicle footprint, as discussed below.
Due to the diversity of the remaining HD vehicles, there are fewer parallels with the structure of the light-duty program.  However, the agencies have maintained the same collaboration and coordination that characterized the development of the light-duty program throughout the Phase 1 rulemaking and the continued efforts for Phase 2.  Most notably, as with the light-duty program, manufacturers would continue to be able to design and build vehicles to meet a closely coordinated, harmonized national program, and to avoid unnecessarily duplicative testing and compliance burdens.  In addition, the averaging, banking, and trading provisions in the HD program, although structurally different from those of the light-duty program, serve the same purpose, which is to allow manufacturers to achieve large reductions in fuel consumption and emissions while providing a broad mix of products to their customers.  The agencies have also worked closely with CARB to achieve a national program.
EPA's SmartWay Program
EPA's voluntary SmartWay Transport Partnership program encourages businesses to take actions that reduce fuel consumption and CO2 emissions while cutting costs by working with the shipping, logistics, and carrier communities to identify low carbon strategies and technologies across their transportation supply chains.  SmartWay provides technical information, benchmarking and tracking tools, market incentives, and partner recognition to facilitate and accelerate the adoption of these strategies.  Through the SmartWay program and its related technology assessment center, EPA has worked closely with truck and trailer manufacturers and truck fleets over the last ten years to develop test procedures to evaluate vehicle and component performance in reducing fuel consumption and has conducted testing and has established test programs to verify technologies that can achieve these reductions.  SmartWay partners have demonstrated these new and emerging technologies in their business operations, adding to the body of technical data and information that EPA can disseminate to industry, researchers and other stakeholders.  Over the last several years, EPA has developed hands-on experience testing the largest heavy-duty trucks and trailers and evaluating improvements in tire and vehicle aerodynamic performance. In developing the Phase 1 program, the agencies drew from this testing and from the SmartWay experience.  In the same way, the agencies benefitted from SmartWay in developing the proposed Phase 2 trailer program.
The State of California
California has established ambitious goals for reducing GHG emissions from heavy-duty vehicles and engines as part of an overall plan to reduce GHG emissions from the transportation sector in California.   Heavy-duty vehicles are responsible for one-fifth of the total GHG emissions from transportation sources in California.  In the past several years the California Air Resources Board (CARB) has taken a number of actions to reduce GHG emissions from heavy-duty vehicles and engines.  For example, in 2008, the CARB adopted regulations to reduce GHG emissions from heavy-duty tractors that pull box-type trailers through improvements in tractor and trailer aerodynamics and the use of low rolling resistance tires[.]  The tractors and trailers subject to the CARB regulation are required to use SmartWay certified tractors and trailers, or retrofit their existing fleet with SmartWay verified technologies, consistent with its state authority to regulate both new and in-use vehicles.   Recently, in December 2013, CARB adopted regulations that establish its own parallel Phase 1 program with standards consistent with EPA Phase 1 standards. On December 5, 2014, California's Office of Administrative Law approved CARB's adoption of the Phase 1 standards, with an effective date of December 5, 2014.  Complementary to its regulatory efforts, CARB and other California Agencies are investing significant public capital through various incentive programs to accelerate fleet turnover and stimulate technology innovation within the heavy-duty vehicle market (e.g., Air Quality Improvement, Carl Moyer, Loan Incentives, Lower-Emission School Bus and Goods Movement Emission Reduction Programs). And, recently, California Governor Jerry Brown established a target of up to 50% petroleum reduction by 2030. 
In addition to California's efforts to reduce GHG emissions that contribute to climate change, California also faces unique air quality challenges as compared to many other regions of the United States.  Many areas of the state are classified as non-attainment for both the ozone and particulate matter National Ambient Air Quality Standards (NAAQS) with California having the nation's only two "Extreme" ozone non-attainment airsheds (the San Joaquin Valley and South Coast Air Basins). By 2016, California must submit to EPA its Clean Air Act State Implementation Plans (SIPs) that demonstrate how the 2008 ozone and 2006 PM2.5 NAAQS will be met by Clean Air Act deadlines.  Extreme ozone areas must attain the 2008 ozone NAAQS by no later than 2032 and PM2.5 moderate areas must attain the 2006 PM2.5 standard by 2021 or, if reclassified to serious,  by 2025.  
 Heavy-duty vehicles are responsible today for one-third of the state's oxides of nitrogen (NOx) emissions.  California has estimated that the state's South Coast Air Basin will need nearly a 90 percent reduction in heavy-duty vehicle NOx emissions by 2032 from 2010 levels to attain the 2008 NAAQS for ozone.  Additionally, on November 25, 2014, EPA issued a proposal to strengthen the ozone NAAQS.  If a change to the ozone NAAQS is finalized, California and other areas of the country will need to identify and implement measures to reduce NOx as needed to complement Federal emission reduction measures. 
In order to encourage the use of lower NOx emitting new heavy-duty vehicles in California, in 2013 CARB adopted a voluntary low NOx emission standard for heavy-duty engines.  In addition, in 2013 CARB awarded a major new research contract to Southwest Research Institute to investigate advanced technologies that could reduce heavy-duty vehicle NOx emissions well below the current EPA and CARB standards. 
California has long had the unique ability among states to adopt its own separate new motor vehicle standards per Section 209 of the Clean Air Act (CAA).  Although section 209(a) of the CAA expressly preempts  states from adopting and enforcing standards relating to the control of emissions from new motor vehicles or new motor vehicle engines (such as state controls for new heavy-duty engines and vehicles CAA section 209(b) directs EPA to waive this preemption under certain conditions.  Under the waiver process set out in CAA Section 209(b), EPA has granted CARB a waiver for its initial heavy-duty vehicle GHG regulation.  Even with California's ability under the CAA to establish its own emission standards, EPA and CARB have worked closely together over the past several decades to largely harmonize new vehicle criteria pollutant standard programs for heavy-duty engines and heavy-duty.  In the past several years EPA and NHTSA also consulted with CARB in the development of the Federal light-duty vehicle GHG and CAFE rulemakings for the 2012-2016 and 2017-2025 model years.  
As discussed above, California operates under state authority to establish its own new heavy-duty vehicle and engine emission standards, including standards for CO2, methane, N2O, and hydrofluorocarbons.  EPA recognizes this independent authority, and we also recognize the potential benefits for the regulated industry if the Federal Phase 2 standards could result in a single, National Program that would meet the NHTSA and EPA's statutory requirements to set appropriate and maximum feasible standards, and also be equivalent to potential future new heavy-duty vehicle and engine GHG standards established by CARB (addressing the same model years as addressed by the final Federal Phase 2 program and requiring the same technologies).   Similarly, CARB has expressed support in the past for a Federal heavy-duty Phase 2 program that would produce significant GHG reductions both at the Federal level and in California that could enable CARB to adopt the same standards at the state level.  This is similar to CARB's approach for the Federal heavy-duty Phase 1 program, and with past EPA criteria pollutant standards for heavy-duty vehicles and engines.  In order to further the opportunity for maintaining coordinated Federal and California standards in the Phase 2 timeframe (as well as to benefit from different technical expertise and perspective), NHTSA and EPA have consulted on an on-going basis with CARB over the past two years as we have developed the Phase 2 proposal.   The agencies' technical staff have shared information on technology cost, technology effectiveness, and feasibility with the CARB staff.  We have also received information from CARB on these same topics.  EPA and NHTSA have also shared preliminary results from several of our modeling exercises with CARB as we examined different potential levels of stringency for the Phase 2 program.  In addition, CARB staff and managers have also participated with EPA and NHTSA in meetings with many external stakeholders, in particular with vehicle OEMs and technology suppliers.  
In addition to information on GHG emissions, CARB has also kept EPA and NHTSA informed of the state's need to consider opportunities for additional NOx emission reductions from heavy-duty vehicles.  CARB has asked the agencies to consider opportunities in the Heavy-Duty Phase 2 rulemaking to encourage or incentivize further NOx emission reductions, in addition to the petroleum and GHG reductions which would come from the Phase 2 standards.  As described in Section VIII, the technologies the agencies are projecting to be used to meet the proposed GHG emission and fuel efficiency standards would be expected to also reduce NOx emissions significantly.
EPA and NHTSA believe that through this information sharing and dialog we will enhance the potential for the Phase 2 program to result in a National Program that can be adopted not only by the Federal Agencies, but also by the State of California, given the strong interest from the regulated industry for a harmonized State and Federal program.
The agencies will continue to seek input from CARB, and from all stakeholders, throughout this rulemaking. 
Environment Canada
On March 13, 2013, Environment Canada (EPA's Canadian counterpart) published its own regulations to control GHG emissions from heavy-duty vehicles and engines, beginning with MY 2014.  These regulations are closely aligned with EPA's Phase 1 program to achieve a common set of North American standards.  Environment Canada has expressed its intention to amend these regulations to further limit emissions of greenhouse gases from new on-road heavy-duty vehicles and their engines for post-2018 MYs.  As with the development of the current regulations, Environment Canada is committed to continuing to work closely with EPA to maintain a common Canada - United States approach to regulating GHG emissions for post-2018 MY vehicles and engines. This approach will build on the long history of regulatory alignment between the two countries on vehicle emissions pursuant to the Canada - United States Air Quality Agreement.  Environment Canada has also been of great assistance during the development of this Phase 2 proposal.  In particular, Environment Canada supported aerodynamic testing, and conducted chassis dynamometer emissions testing. 
Recommendations of the National Academy of Sciences
In April 2010 as mandated by Congress in EISA, the National Research Council (NRC) under the National Academy of Sciences (NAS) issued a report to NHTSA and to Congress evaluating medium- and heavy-duty truck fuel efficiency improvement opportunities, titled "Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-duty Vehicles."    That NAS report was far reaching in its review of the technologies that were available and that might become available in the future to reduce fuel consumption from medium- and heavy-duty vehicles.  In presenting the full range of technical opportunities, the report included technologies that may not be available until 2020 or even further into the future.  The report provided not only a valuable list of off the shelf technologies from which the agencies drew in developing the Phase 1 program, but also provided useful information the agencies have considered when developing this second phase of regulations.  
In April 2014, the NAS issued another report: "Reducing the Fuel Consumption and Greenhouse Gas Emissions of Medium and Heavy-Duty Vehicles, Phase Two, First Report."  This study outlines a number of recommendations to the U.S. Department of Transportation and NHTSA on technical and policy matters to consider when addressing the fuel efficiency of our nation's medium- and heavy-duty vehicles.  In particular, this report provided recommendations with respect to:
         * The Greenhouse Gas Emission Model (GEM) simulation tool used by the agencies to assess compliance with vehicle standards
         * Regulation of trailers
         * Natural gas-fueled engines and vehicles
         * Data collection on in-use operation
As described in Sections II, IV, and XII, the agencies are proposing to incorporate many of these recommendations into this proposed Phase 2 program, especially those recommendations relating to the GEM simulation tool and to trailers. 
Summary of Phase 1 Program
    EPA Phase 1 GHG Emission Standards and NHTSA Phase 1 Fuel Consumption Standards
The Phase 1 GHG mandatory standards commenced in MY 2014 and include increased stringency for standards applicable to MY 2017 and later MY vehicles and engines.  NHTSA's fuel consumption standards are voluntary for MYs 2014 and 2015, due to lead time requirements in EISA, and apply on a mandatory basis thereafter.  Both agencies have allowed voluntary early compliance starting in MY 2013 and encouraged manufacturers' participation through credit incentives.   
Given the complexity of the heavy-duty industry, the agencies divided the industry into three discrete categories for purposes of setting our respective Phase 1 standards  -  combination tractors, heavy-duty pickups and vans, and vocational vehicles -- based on the relative degree of homogeneity among trucks within each category.  The Phase 1 rules also include separate standards for the engines that power combination tractors and vocational vehicles.  For each regulatory category, the agencies adopted related but distinct program approaches reflecting the specific challenges in these segments.  In the following paragraphs, we summarize briefly EPA's final GHG emission standards and NHTSA's final fuel consumption standards for the three regulatory categories of heavy-duty vehicles and for the engines powering vocational vehicles and tractors.  See Sections III, V, and VI for additional details on the Phase 1 standards.  To respect differences in design and typical uses that drive different technology solutions, the agencies segmented each regulatory class into subcategories.  The category-specific structure enabled the agencies to set standards that appropriately reflect the technology available for each regulatory subcategory of vehicles and the engines for use in each type of vehicle.  The Phase 1 program also provided several flexibilities, as summarized in Section I.B(3).
The agencies are proposing to base the Phase 2 standards on test procedures that differ from those used for Phase 1, including the revised GEM simulation tool.  Significant revisions to GEM are discussed in Section II and the draft RIA Chapter 4, and other test procedures are discussed further in the draft RIA Chapter 3.  It is important to note that due to these test procedure changes, the Phase 1 standards and the proposed Phase 2 standards are not directly comparable in an absolute sense.  In particular, the proposed revisions to the 55 mph and 65 mph highway cruise cycles for tractors and vocational vehicles have the effect of making the cycles more challenging (albeit more representative of actual driving conditions).  We are not proposing to apply these revisions to the Phase 1 program because doing so would significantly change the stringency of the Phase 1 standards, for which manufacturers have already developed engineering plans and are now producing products to meet.  Moreover, the agencies intend such changes to address a broader range of technologies not part of the projected compliance path for use in Phase 1.      
Class 7 and 8 Combination Tractors
Class 7 and 8 combination tractors and their engines contribute the largest portion of the total GHG emissions and fuel consumption of the heavy-duty sector, approximately two-thirds, due to their large payloads, their high annual miles traveled, and their major role in national freight transport.  These vehicles consist of a cab and engine (tractor or combination tractor) and a detachable trailer.  The primary manufacturers of combination tractors in the United States are Daimler Trucks North America, Navistar, Volvo/Mack, and PACCAR.  Each of the tractor manufacturers and Cummins also produce heavy-duty engines used in tractors.  The Phase 1 standards require manufacturers to reduce GHG emissions and fuel consumption for these vehicles and engines, which we expect them to do through improvements in aerodynamics and tires, reductions in tractor weight, reduction in idle operation, as well as engine-based efficiency improvements.  
The Phase 1 tractor standards differ depending on gross vehicle weight rating (GVWR) (i.e., whether the truck is Class 7 or Class 8), the height of the roof of the cab, and whether it is a "day cab" or a "sleeper cab."  The agencies created nine subcategories within the Class 7 and 8 combination tractor category reflecting combinations of these attributes. The agencies set Phase 1 standards for each of these subcategories beginning in MY 2014, with more stringent standards following in MY 2017.  The standards represent an overall fuel consumption and CO2 emissions reduction up to 23 percent from the tractors and the engines installed in them when compared to a baseline MY 2010 tractor and engine.
For Phase 1, manufacturers demonstrate compliance with the tractor CO2 and fuel consumption standards using a vehicle simulation tool described in Section II.  The tractor inputs to the simulation tool in Phase 1 are the aerodynamic performance, tire rolling resistance, vehicle speed limiter, automatic engine shutdown, and weight reduction.  The agencies have verified, through our own confirmatory testing, that the values inputs into the model by manufacturers are generally correct.  Prior to and after adopting the Phase 1 standards, the agencies worked with manufacturers to minimize impacts of this process on their normal business practices.  
In addition to the final Phase 1 tractor-based standards for CO2, EPA adopted a separate standard to reduce leakage of hydrofluorocarbon (HFC) refrigerant from cabin air conditioning (A/C) systems from combination tractors, to apply to the tractor manufacturer.  This HFC leakage standard is independent of the CO2 tractor standard.  Manufacturers can choose technologies from a menu of leak-reducing technologies sufficient to comply with the standard, as opposed to using a test to measure performance.  Given that HFC leakage does not relate to fuel efficiency, NHTSA did not adopt corresponding HFC standards.
Heavy-Duty Pickup Trucks and Vans (Class 2b and 3)
Heavy-duty vehicles with a GVWR between 8,501 and 10,000 lb are classified as Class 2b motor vehicles.  Heavy-duty vehicles with a GVWR between 10,001 and 14,000 lb are classified as Class 3 motor vehicles.  Class 2b and Class 3 heavy-duty vehicles (referred to in these rules as "HD pickups and vans") together emit about 15 percent of today's GHG emissions from the heavy-duty vehicle sector.   
The majority of HD pickups and vans are (3/4)-ton and 1-ton pickup trucks, 12- and 15-passenger vans, and large work vans that are sold by vehicle manufacturers as complete vehicles, with no secondary manufacturer making substantial modifications prior to registration and use.  These vehicles can also be sold as cab-complete vehicles.  The majority of heavy-duty pickups and vans are produced by companies with major light-duty markets in the United States.  Furthermore, the technologies available to reduce fuel consumption and GHG emissions from this segment are similar to the technologies used on light-duty pickup trucks, including both engine efficiency improvements (for gasoline and diesel engines) and vehicle efficiency improvements.  For these reasons, EPA and NHTSA concluded that it was appropriate to adopt GHG standards, expressed as grams per mile, and fuel consumption standards, expressed as gallons per 100 miles, for HD pickups and vans based on the whole vehicle (including the engine), consistent with the way these vehicles have been regulated by EPA for criteria pollutants and also consistent with the way their light-duty counterpart vehicles are regulated by NHTSA and EPA.  This complete vehicle approach adopted by both agencies for HD pickups and vans was consistent with the recommendations of the NAS Committee in its 2010 Report.
For the light-duty GHG and fuel economy standards, the agencies based the emissions and fuel economy targets on vehicle footprint (the wheelbase times the average track width).   For those standards, passenger cars and light trucks with larger footprints are assigned higher GHG and lower fuel economy target levels reflecting their inherent tendency to consume more fuel and emit more GHGs per mile.  For HD pickups and vans, the agencies believe that setting standards based on vehicle attributes is appropriate, but have found that a work-based metric would be a more appropriate attribute than the footprint attribute utilized in the light-duty vehicle rulemaking, given that work-based measures such as towing and payload capacities are critical elements of these vehicles' functionality.  EPA and NHTSA therefore adopted standards for HD pickups and vans based on a "work factor" attribute that combines their payload and towing capabilities, with an added adjustment for 4-wheel drive vehicles.
Each manufacturer's fleet average Phase 1 standard is based on production volume-weighting of target standards for all vehicles, which in turn are based on each vehicle's work factor.  These target standards are taken from a set of curves (mathematical functions), specified in 40 CFR 1037.104 with separate curves for gasoline and diesel.  However, both gasoline and diesel vehicles in this category are included in a single averaging set.  EPA phased in the CO2 standards gradually starting in the 2014 MY, at 15-20-40-60-100 percent of the MY 2018 standards stringency level in MYs 2014-2015-2016-2017-2018, respectively.  The phase-in takes the form of a set of target curves, with increasing stringency in each MY.
NHTSA allowed manufacturers to select one of two fuel consumption standard alternatives for MYs 2016 and later.  The first alternative defined individual gasoline vehicle and diesel vehicle fuel consumption target curves that will not change for MYs 2016-2018, and are equivalent to EPA's 67-67-67-100 percent target curves in MYs 2016-2017-2018-2019, respectively.  The second alternative defined target curves that are equivalent to EPA's 40-60-100 percent target curves in MYs 2016-2017-2018, respectively.  NHTSA allowed manufacturers to opt voluntarily into the NHTSA HD pickup and van program in MYs 2014 or 2015 at target curves equivalent to EPA's target curves.  If a manufacturer chose to opt in for one category, they would be required to opt in for all categories.  In other words a manufacturer would be unable to opt in for Class 2b vehicles, but opt out for Class 3 vehicles.
EPA also adopted an alternative phase-in schedule for manufacturers wanting to have stable standards for model years 2016-2018.  The standards for heavy-duty pickups and vans, like those for light-duty vehicles, are expressed as set of target standard curves, with increasing stringency in each model year.  The final EPA standards for 2018 (including a separate standard to control air conditioning system leakage) represent an average per-vehicle reduction in GHG emissions of 17 percent for diesel vehicles and 12 percent for gasoline vehicles. The NHTSA standard will require these vehicles to achieve up to about 15 percent reduction in fuel consumption and greenhouse gas emissions by MY 2018.  Manufacturers demonstrate compliance based on entire vehicle chassis certification using the same duty cycles used to demonstrate compliance with criteria pollutant standards.  
Class 2b-8 Vocational Vehicles
Class 2b-8 vocational vehicles include a wide variety of vehicle types, and serve a vast range of functions. Some examples include service for urban delivery, refuse hauling, utility service, dump, concrete mixing, transit service, shuttle service, school bus, emergency, motor homes, and tow trucks.  In Phase 1, we defined Class 2b-8 vocational vehicles as all heavy-duty vehicles that are not included in either the heavy-duty pickup and van category or the Class 7 and 8 tractor category.  EPA's and NHTSA's Phase 1 standards for this vocational vehicle category generally apply at the chassis manufacturer level. Class 2b-8 vocational vehicles and their engines emit approximately 20 percent of the GHG emissions and burn approximately 21 percent of the fuel consumed by today's heavy-duty truck sector. 
The Phase 1 program for vocational vehicles has vehicle standards and separate engine standards, both of which differ based on the weight class of the vehicle into which the engine will be installed.  The vehicle weight class groups mirror those used for the engine standards -- Classes 2b-5 (light heavy-duty or LHD in EPA regulations), Classes 6&7 (medium heavy-duty or MHD in EPA regulations) and Class 8 (heavy heavy-duty or HHD in EPA regulations).  Manufacturers demonstrate compliance with the Phase 1 vocational vehicle CO2 and fuel consumption standards using a vehicle simulation tool described in Section II.  The Phase 1 program for vocational vehicles limited the simulation tool inputs to tire rolling resistance.  The model assumes the use of a typical representative, compliant engine in the simulation, resulting in one overall value for CO2 emissions and one for fuel consumption.  
Engines used in vocational vehicles are subject to separate Phase 1 engine-based standards. Optional certification paths, for EPA and NHTSA, are also provided to enhance the flexibilities for vocational vehicles.  Manufacturers producing spark-ignition (or gasoline) cab-complete or incomplete vehicles weighing over 14,000 pounds GVWR and below 26,001 pounds GVWR have the option to certify to the complete vehicle standards for heavy-duty pickup trucks and vans rather than using the separate engine and chassis standards for vocational vehicles.
Engine Standards
The agencies established separate Phase 1 performance standards for the engines manufactured for use in vocational vehicles and Class 7 and 8 tractors.  These engine standards vary depending on engine size linked to intended vehicle service class.  EPA's engine-based CO2 standards and NHTSA's engine-based fuel consumption standards are being implemented using EPA's existing test procedures and regulatory structure for criteria pollutant emissions from heavy-duty engines.
The agencies also finalized a regulatory alternative whereby a manufacturer, for an interim period of the 2014-2016 MYs, would have the option to comply with a unique standard based on a three percent reduction from an individual engine's own 2011 MY baseline level.      
Manufacturers Excluded from the Phase 1 Standards
Phase 1 temporarily deferred greenhouse gas emissions and fuel consumption standards for any manufacturers of heavy-duty engines, manufacturers of combination tractors, and chassis manufacturers for vocational vehicles that meet the "small business" size criteria set by the Small Business Administration (SBA).  13 CFR 121.201 defines a small business by the maximum number of employees; for example, this is currently 1,000 for heavy-duty vehicle manufacturing and 750 for engine manufacturing.  In order to utilize this exemption, qualifying small businesses must submit a declaration to the agencies.   See Section I. F. (1) (b) for a summary of how Phase 2 would apply for small businesses.
The agencies stated that they consider appropriate GHG and fuel consumption standards for these entities as part of a future regulatory action. This includes both U.S.-based and foreign small-volume heavy-duty manufacturers.  
    Costs and Benefits of the Phase 1 Program
Overall, EPA and NHTSA estimated that the Phase 1 HD National Program will cost the affected industry about $8 billion, while saving vehicle owners fuel costs of nearly $50 billion over the lifetimes of MY 2014-2018 vehicles.  The agencies also estimated that the combined standards will reduce CO2 emissions by about 270 million metric tons and save about 530 million barrels of oil over the life of MY 2014 to 2018 vehicles.  The agencies estimated additional monetized benefits from CO2 reductions, improved energy security, reduced time spent refueling, as well as possible increased driving accidents, traffic congestion, and noise. When considering all these factors, we estimated that Phase 1 of the HD National Program will yield $49 billion in net benefits to society over the lifetimes of MY 2014-2018 vehicles.  
EPA estimated the benefits of reduced ambient concentrations of particulate matter and ozone resulting from the Phase 1 program to range from $1.3 to $4.2 billion in 2030.  
In total, we estimated the combined Phase 1 standards will reduce GHG emissions from the U.S. heavy-duty fleet by approximately 76 million metric tons of CO2-equivalent annually by 2030.  In its Environmental Impact Statement for the Phase 1 rule, NHTSA also quantified and/or discussed other potential impacts of the program, such as the health and environmental impacts associated with changes in ambient exposures to toxic air pollutants and the benefits associated with avoided non-CO2 GHGs (methane, nitrous oxide, and HFCs).
    Phase 1 Program Flexibilities
As noted above, the agencies adopted numerous provisions designed to give manufacturers a degree of flexibility in complying with the Phase 1 standards.   These provisions, which are essentially identical in structure and function in NHTSA's and EPA's regulations, enabled the agencies to consider overall standards that are more stringent and that will become effective sooner than we could consider with a more rigid program, one in which all of a manufacturer's similar vehicles or engines would be required to achieve the same emissions or fuel consumption levels, and at the same time. 
Phase 1 included four primary types of flexibility: averaging, banking, and trading (ABT) provisions; early credits; advanced technology credits (including hybrid powertrains); and innovative technology credit provisions.  The ABT provisions were patterned on existing EPA and NHTSA ABT programs (including the light-duty GHG and fuel economy standards) and will allow a vehicle manufacturer to reduce CO2 emission and fuel consumption levels further than the level of the standard for one or more vehicles to generate ABT credits.  The manufacturer can use those credits to offset higher emission or fuel consumption levels in the same averaging set, "bank" the credits for later use, or "trade" the credits to another manufacturer.  As also noted above, for HD pickups and vans, we adopted a fleet averaging system very similar to the light-duty GHG and CAFE fleet averaging system.  In both programs, manufacturers are allowed to carry-forward deficits for up to three years without penalty.  
The agencies provided in the ABT programs flexibility for situations in which a manufacturer is unable to avoid a negative credit balance at the end of the year.  In such cases, manufacturers are not considered to be out of compliance unless they are unable to make up the difference in credits by the end of the third subsequent model year.  
In total, the Phase 1 program divides the heavy-duty sector into 19 subcategories of vehicles.  These subcategories are grouped into 9 averaging sets to provide greater opportunities in leveraging compliance.  For tractors and vocational vehicles, the fleet averaging sets are Classes 2b through 5, Classes 6 and 7, and Class 8 weight classes.  For engines, the fleet averaging sets are gasoline engines, light heavy-duty diesel engines, medium heavy-duty diesel engines, and heavy heavy-duty diesel engines.  Complete HD pickups and vans (both spark-ignition and compression-ignition) are the final fleet averaging set.
As noted above, the agencies included a restriction on averaging, banking, and trading of credits between the various regulatory subcategories by defining three HD vehicle averaging sets:  light heavy-duty (Classes 2b-5); medium heavy-duty (Class 6-7); and heavy heavy-duty (Class 8). This allows the use of credits between vehicles within the same weight class.  This means that a Class 8 day cab tractor can exchange credits with a Class 8 high roof sleeper tractor but not with a smaller Class 7 tractor.  Also, a Class 8 vocational vehicle can exchange credits with a Class 8 tractor.  However, we did not allow trading between engines and chassis. We similarly allowed for trading among engine categories only within an averaging set, of which there are four: spark-ignition engines, compression-ignition light heavy-duty engines, compression-ignition medium heavy-duty engines, and compression-ignition heavy heavy-duty engines.  
In addition to ABT, the other primary flexibility provisions in the Phase 1 program involve opportunities to generate early credits, advanced technology credits (including for use of hybrid powertrains), and innovative technology credits.  For the early credits and advanced technology credits, the agencies adopted a 1.5x multiplier, meaning that manufacturers would get 1.5 credits for each early credit and each advanced technology credit. In addition, advanced technology credits for Phase 1 can be used anywhere within the heavy-duty sector (including both vehicles and engines).  Put another way, as a means of promoting this promising technology, the Phase 1 rules do not restrict averaging or trading by averaging set in this instance. 
For other vehicle or engine technologies that can reduce CO2 and fuel consumption, but for which there do not yet exist established methods for quantifying reductions, the agencies wanted to encourage the development of such innovative technologies, and therefore adopted special "innovative technology" credits.  These innovative technology credits apply to technologies that are shown to produce emission and fuel consumption reductions that are not adequately recognized on the Phase 1 test procedures and that were not yet in widespread use in the heavy-duty sector before MY 2010.  Manufacturers need to quantify the reductions in fuel consumption and CO2 emissions that the technology is expected to achieve, above and beyond those achieved on the existing test procedures.  As with ABT, the use of innovative technology credits is allowed only for use among vehicles and engines of the same defined averaging set generating the credit, as described above.  The credit multiplier likewise does not apply for innovative technology credits.
    Implementation of Phase 1
Manufacturers have already begun complying with the Phase 1 standards.  In some cases manufacturers voluntarily chose to comply early, before compliance was mandatory.   The Phase 1 rule allows manufacturers to generate credits for such early compliance.  The market appears to be very accepting of the new technology, and the agencies have seen no evidence of "pre-buy" effects in response to the standards.  In fact sales have been higher in recent years than they were before Phase 1 began.   Moreover, manufacturers' compliance plans are taking advantage of the Phase 1 flexibilities, and we have yet to see significant non-compliance with the standards.   
Summary of the Proposed Phase 2 Standards and Requirements
The agencies are proposing new standards that build on and enhance existing Phase 1 standards, as well as proposing the first ever standards for certain trailers used in combination with heavy-duty tractors.  Taken together, the proposed Phase 2 program would comprise a set of largely technology-forcing standards that would achieve greater GHG and fuel consumption savings than the Phase 1 program.  As described in more detail in the following sections, the agencies are proposing these standards because, based on the information available at this time, we believe they would best match our respective statutory authorities when considered in the context of available technology, feasible reductions of emissions and fuel consumption, costs, lead time, safety, and other relevant factors.
The proposed Phase 2 standards would represent a more technology-forcing approach than the Phase 1 approach, predicated on use of both off-the-shelf technologies and emerging technologies that are not yet in widespread use.  The agencies are proposing standards for MY 2027 that would likely require manufacturers to make extensive use of these technologies.  For existing technologies and technologies in the final stages of development, we project that manufacturers would likely apply them to nearly all vehicles, excluding those specific vehicles with applications or uses that would prevent the technology from functioning properly.  We also project as one possible compliance pathway that manufacturers could apply other more advanced technologies such as hybrids and waste engine heat recovery systems, although at lower application rates.
Under Alternative 3, the preferred alternative, the agencies propose to provide ten years of lead time for manufacturers to meet these 2027 standards which the agencies believe is adequate to implement the technologies industry could use to meet the proposed standards.  For some of the more advanced technologies production prototype parts are not yet available, though they are in the research stage with some demonstrations in actual vehicles.  Additionally, even for the more developed technologies, phasing in more stringent standards over a longer timeframe may help manufacturers to ensure better reliability of the technology and to develop packages to work in a wide range of applications.  Moving more quickly, however, as in Alternative 4, would lead to earlier and greater cumulative fuel savings and greenhouse gas reductions.  
As discussed later, the agencies are also proposing new standards in MYs 2018 (trailers only), 2021, and 2024 to ensure manufacturers make steady progress toward the 2027 standards, thereby achieving steady and feasible reductions in GHG emissions and fuel consumption in the years leading up to the MY 2027 standards.  Moving more quickly, however, as in Alternative 4, would lead to earlier and greater cumulative fuel and greenhouse gas savings.
Providing additional lead time can often enable manufacturers to resolve technological challenges or to find lower cost means of meeting new regulatory standards, effectively making them more feasible in either case.  See generally NRDC v. EPA, 655 F. 2d 318, 329 (D.C. Cir. 1981).  On the other hand, manufacturers and/or operators may incur additional costs if regulations require them to make changes to their products with less lead time than manufacturers would normally have when bringing a new technology to the market or expanding the application of existing technologies.  After developing a new technology, manufacturers typically conduct extensive field tests to ensure its durability and reliability in actual use.  Standards that accelerate technology deployment can lead to manufacturers incurring additional costs to accelerate this development work, or can lead to manufacturers beginning production before such testing can be completed.  In the context of some prior EPA heavy-duty engine regulations, manufacturers introduced new technologies with insufficient product development validation, which led to additional costs for operators when the technology caused vehicle breakdowns or other operational issues in use. Thus, the issues of costs, lead time, and reliability are intertwined for the agencies' determination of whether standards are reasonable.  
Another important consideration is the possibility of disrupting the market, such as might happen if we were to adopt standards that manufacturers respond to by applying a new technology too suddenly.  In particular, the agencies note that for fleet purchases that are planned more than a year in advance, expectations of reduced reliability, increased operating costs, reduced residual value, or of large increases in purchase prices can lead the fleets to pre-buy vehicles without the newer technology.  Such pre-buys would be followed by some period of reduced purchases that can lead to temporary layoffs at the factories producing the engines and vehicles, as well as at supplier factories, and disruptions at dealerships.  Such pre-buys also reduce the overall environmental and fuel consumption benefits of the standards by delaying the rate at which the fleet turns over.  See International Harvester v. EPA, 478 F. 2d 615, 634 (D.C. Cir. 1973).  Prior EPA heavy-duty engine criteria pollutant standards implemented in 2002 and 2007 have resulted in this phenomenon for the Class 8 tractor market.  The  agencies understand the impact that pre-buy can have on American manufacturing and labor, dealerships, truck purchasers, and on the program's environmental and fuel savings goals.  This proposal has been structured to avoid such disruptions by:
         * Providing considerable lead time, including two to three additional years for the preferred alternative compared to Alternative 4
         * The standards will result in significantly lower operating costs for vehicle owners (unlike the 2002 and 2007 standards , which increased operating costs)
         * Phasing in the standards
         * Structuring the program so the industry will have a significant range of technology choices to be considered for compliance, rather than the one or two new technologies the OEMs pursued in 2002 and 2007
         * Allowing manufacturers to use emissions averaging, banking and trading to phase in the technology even further
We request comment on the sufficiency of the proposed Phase 2 structure, lead time, and stringency to avoid market disruptions such as pre-buying.  We note, however, that the additional costs and pre-buy issues that resulted from previous EPA standards for the HD vehicle sector occurred in the context of criteria pollutant emissions regulations that provided no direct benefit in terms of fuel savings to vehicle purchasers.  The fuel consumption/GHG emissions standards proposed today, in contrast, provide immediate and direct benefits to vehicle purchasers  -  they will begin saving money on fuel costs as soon as they begin operating the vehicles.  It would seem logical, therefore, that vehicle purchasers (and manufacturers) would weigh those significant fuel savings against the potential for increased costs that could result from applying fuel-saving technologies sooner than they might otherwise choose in the absence of the standards.  Given that fuel savings increase (and payback periods generally decrease) as the standards increase in stringency, it would also seem less clear that the higher costs associated with meeting more stringent standards would necessarily outweigh expected higher fuel savings in manufacturers' and purchasers' calculations. 
As discussed in the Phase 1 final rule, NHTSA has certain statutory considerations to take into account when determining feasibility of the preferred alternative.  The Energy Independence and Security Act (EISA) states that NHTSA (in consultation with EPA and the Secretary of Energy) shall develop a commercial medium- and heavy-duty fuel efficiency program designed "to achieve the maximum feasible improvement."  Although there is no definition of maximum feasible standards in EISA, NHTSA is directed to consider three factors when determining what the maximum feasible standards are.  Those factors are, "appropriateness, cost-effectiveness, and technological feasibility," which modify "feasible" beyond its plain meaning of "capable of being done."  
NHTSA has the broad discretion to weigh and balance the aforementioned factors in order to accomplish EISA's mandate of determining maximum feasible standards.  The fact that the factors may often be at odds gives NHTSA significant discretion to decide what weight to give each of the competing factors, policies and concerns and then determine how to balance them -- as long as NHTSA's balancing does not undermine the fundamental purpose of the EISA: energy conservation, and as long as that balancing reasonably accommodates "conflicting policies that were committed to the agency's care by the statute."   
EPA also has significant discretion in assessing, weighing, and balancing the relevant statutory criteria.  Section 202(a)(2) of the Clean Air Act requires that the standards "take effect after such period as the Administrator finds necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance within such period." This language affords EPA considerable discretion in how to weight the critical statutory factors of emission reductions, cost, and lead time. 76 FR 57129-130.  Section 202 (a) also allows (although it does not compel) EPA to adopt technology-forcing standards.  Id. at 57130.  
In giving due consideration to the agencies' respective statutory criteria discussed above, the agencies are proposing these technology-forcing standards for MY 2027.  The agencies nevertheless recognize that there is some uncertainty in projecting costs and effectiveness, especially for those technologies not widely available, but believe that the thresholds proposed for consideration account for realistic projections of technological development.  The agencies are requesting comment on the alternatives described in Section X below.  These alternatives range from Alternative 1 (which is a no-action alternative that serves as the baseline for our cost and benefit analyses) to Alternative 5 (which includes the most stringent of the alternative standards analyzed by the agencies).  The assessment of these different alternatives considers the importance of allowing manufacturers sufficient flexibility and discretion while achieving meaningful fuel consumption and GHG emissions reductions across vehicle types.  The agencies look forward to receiving comments on questions of feasibility and long-term projections.
As discussed throughout this document, the agencies believe Alternative 4 has potential to be the maximum feasible alternative, however, based on the evidence currently before us, the agencies have outstanding questions regarding relative risks and benefits of that option in the timeframe envisioned.  Alternative 3 is generally designed to achieve the vehicle levels of fuel consumption and GHG reduction that Alternative 4 would achieve, but with two to three years of additional lead-time  -  i.e., the Alternative 3 standards would end up in the same place as the Alternative 4 standards, but two to three years later, meaning that manufacturers could, in theory, apply new technology at a more gradual pace and with greater flexibility as discussed above.  However, Alternative 4 would lead to earlier and greater cumulative fuel savings and greenhouse gas reductions.
In the sections that follow, the agencies have closely examined the potential feasibility of Alternative 4 for each subcategory.  The agencies may consider establishing final fuel efficiency and GHG standards in whole or in part in the Alternative 4 timeframe if we deem them to be maximum feasible and reasonable for NHTSA and EPA, respectively.  The agencies seek comment on the feasibility of Alternative 4, whether for some or for all segments, including empirical data on its appropriateness, cost-effectiveness, and technological feasibility.  
Sections II through VI of this notice explain the consideration that the agencies took into account in considering options and proposing a preferred alternative based on balancing of the statutory factors under CAA Section 202 (a)(1) and (2), and under 49 U.S.C. Section 32902 (k) of EISA.   
    Carryover from Phase 1 Program and Proposed Compliance Changes
Phase 2 will carry over many of the compliance approaches developed for Phase 1, with certain changes as described below.  Readers are referred to the proposed regulatory text for much more detail.  Note that some of these provisions are being carried over with revisions or additions (such as those needed to address trailers). 
Certification
NHTSA and EPA are proposing to apply the same general certification procedures for Phase 2 as are currently being used for certifying to the Phase 1 standards.  The agencies, however, are proposing changes to the simulation tool used for the vocational vehicle, tractor and trailer standards that would allow the simulation tool to more specifically reflect improvements to transmissions and drivetrains.  Rather than the model using default values for transmissions and drivetrains, manufacturers would enter measured or tested values as inputs reflecting performance of their actual transmission and drivetrain technologies.  
The agencies apply essentially the same process for certifying tractors and vocational vehicles, and propose largely to apply it to trailers as well.  The Phase 1 certification process for engines used in tractors and vocational vehicles was based on EPA's process for showing compliance with the heavy-duty engine criteria pollutant standards, and the agencies propose to continue it for Phase 2.  Finally, we also propose to continue certifying HD pickups and vans using the Phase 1 vehicle certification process, which is very similar to the light-duty vehicle certification process.
Averaging, Banking and Trading (ABT)
The Phase 1 ABT provisions were patterned on established EPA ABT programs that have proven to work well.  In Phase 1, the agencies determined this flexibility would provide an opportunity for manufacturers to make necessary technological improvements and reduce the overall cost of the program without compromising overall environmental and fuel economy objectives.  We propose to continue this Phase 1 approach with few revisions.  The agencies see the ABT program as playing an important role in making the proposed technology-forcing standards feasible, by helping to address many issues of technological challenges in the context of lead time and costs.  It provides manufacturers flexibilities that assist the efficient development and implementation of new technologies and therefore enable new technologies to be implemented at a more aggressive pace than without ABT.  
ABT programs are more than just add-on provisions included to help reduce costs, and can be, as in EPA's Title II programs generally, an integral part of the standard setting itself.  A well-designed ABT program can also provide important environmental and energy security benefits by increasing the speed at which new technologies can be implemented (which means that more benefits accrue over time than with later-commencing standards) and at the same time increase flexibility for, and reduce costs to, the regulated industry and ultimately consumers.  Without ABT provisions (and other related flexibilities), standards would typically have to be numerically less stringent since the numerical standard would have to be adjusted to accommodate issues of feasibility and available lead time.  See 75 FR at 25412-13.  By offering ABT credits and additional flexibilities the agencies can offer progressively more stringent standards that help meet our fuel consumption reduction and GHG emission goals at a faster and more cost-effective pace.
Carryover of Phase 1 Credits and Credit Life
The agencies propose to continue the five-year credit life provisions from Phase 1, and are not proposing any additional restriction on the use of banked Phase 1 credits in Phase 2.  In other words, Phase 1 credits in MY2019 could be used in Phase 1 or in Phase 2 in MYs 2021-2024.   Although, as we have already noted, the numerical values of proposed Phase 2 standards are not directly comparable in an absolute sense to the existing Phase 1 standards (in other words, a given vehicle would have a different g/ton-mile emission rate when evaluated using Phase 1 GEM than it would when evaluated using Phase 2 GEM), we believe that the Phase 1 and Phase 2 credits are largely equivalent.  This is best understood by examining the way in which credits are calculated.  For example, the credit equation in 40 CFR 1037.705 calculates credits as the product of the difference between the standard and the vehicle's emission level (g/ton-mile), the regulatory payload (tons), production volume, and regulatory useful life (miles), and Phase 2 would not change payloads, production volumes, of useful lives.  Because the standards and emission levels are included in a relative sense (as a difference), it is not necessary for the Phase 1 and Phase 2 standards to be directly equivalent in an absolute sense in order for the credits to be equivalent.
We note that the primary purpose of allowing manufacturers to bank credits is to provide flexibility in managing transitions to new standards.  The five-year credit life is substantial, and would allow credits generated in either Phase 1 or early in Phase 2 to be used for the intended purpose.  The agencies believe longer credit life is not necessary to accomplish this transition.   Restrictions on credit life serve to reduce the likelihood that any manufacturer would be able to use banked credits to disrupt the heavy-duty vehicle market in any given year by effectively limiting the amount of credits that can be held.  Without this limit, one manufacturer that saved enough credits over many years could achieve a significant cost advantage by using all the credits in a single year.  The agencies believe, subject to consideration of public comment, that allowing a five year credit life for all credits, and as a consequence allowing use of Phase 1 credits in Phase 2, creates appropriate flexibility and appropriately facilitates a smooth transition to each new level of standards.
Although we are not proposing any additional restrictions on the use of Phase 1 credits, we are requesting comment on this issue.  Early indications suggest that positive market reception to the Phase 1 technologies could lead to manufacturers accumulating credit surpluses that could be quite large at the beginning of the proposed Phase 2 program.  This appears especially likely for tractors.  The agencies are specifically requesting comment on the likelihood of this happening, and whether any regulatory changes would be appropriate in response.  For example, should the agencies limit the amount of credits than could be carried over from Phase1 or limit them to the first year or two of the Phase 2 program?  Also, if we determine that large surpluses are likely, how should that factor into our decision on the feasibility of more stringent standards in MY 2021?
Averaging Sets
Under phase 1, averaging, banking and trading can only occur within and between specified "averaging sets" (with the exception of credits generated through use of specified advanced technologies).  We propose to continue this regime in phase 2, to retain the existing vehicle and engine averaging sets, and create new trailer averaging sets.  We also propose to continue the averaging set restrictions from Phase 1 in Phase 2.  These averaging sets for vehicles are:
         * Complete pickups and vans
         * Other light heavy-duty vehicles (Classes 2b-5)
         * Medium heavy-duty vehicles (Class 6-7)
         * Heavy heavy-duty vehicles (Class 8)
         * Long dry van trailers
         * Short dry van trailers
         * Long refrigerated trailers 
         * Short refrigerated trailers
We also propose not to allow trading between engines and chassis, even within the same vehicle class.  Such trading would essentially result in double counting of emission credits, because the same engine technology would likely generate credits relative to both standards. We similarly would limit trading among engine categories to trades within the designated averaging sets: 
         * Spark-ignition engines
         * Compression-ignition light heavy-duty engines
         * Compression-ignition medium heavy-duty engines
         * Compression-ignition heavy heavy-duty engines
The agencies continue to believe that restricting trading to within the same eight classes would provide adequate opportunities for manufacturers to make necessary technological improvements and to reduce the overall cost of the program without compromising overall environmental and fuel efficiency objectives, and is therefore appropriate and reasonable.  We do not expect emissions from engines and vehicles  -  when restricted by weight class  -  to be dissimilar.  We therefore expect that the lifetime vehicle performance and emissions levels will be very similar across these defined categories, and the estimated credit calculations will fairly ensure the expected fuel consumption and GHG emission reductions.  
We continue to believe, subject to consideration of public comment, that the Phase 1 averaging sets create the most flexibility that is appropriate without creating an unfair advantage for manufacturers with erratically integrated portfolios, including engines and vehicles.   See 76 FR 57240.   The agencies committed in Phase 1 to seek public comment after credit trading begins with manufacturers certifying in 2014 on whether broader credit trading is more appropriate in developing the next phase of HD regulations (76 FR 57128, September 15, 2011).  The 2014 model year end of year reports will become available to the agencies in mid-2015.    Therefore, the agencies will provide information at that point.  We welcome comment on averaging set restrictions.  The agencies propose to continue this carry forward provision for phase 2 for the same reasons.
Credit Deficits
The Phase 1 regulations allow manufacturers to carry-forward deficits for up to three years without penalty.   This is an important flexibility because the program is designed to address the diversity of the heavy-duty industry by allowing manufacturers to sell a mix of engines or vehicles that have very different emission levels and fuel efficiencies.  Under this construct, manufacturers can offset sales of engines or vehicles not meeting the standards by selling others (within the same averaging set) that are much better than required.  However, in any given year it is possible that the actual sales mix will not balance out and the manufacturer may be short of credits for that model year.  The three year provision allows for this possibility and creates additional compliance flexibility to accommodate it.
Advanced Technology Credits
At this time, the agencies believe it is no longer appropriate to provide extra credit for the technologies identified as advanced technologies for Phase 1, although we are requesting comment on this issue.  The Phase 1 advanced technology credits were adopted to promote the implementation of advanced technologies, such as hybrid powertrains, Rankine cycle engines, all-electric vehicles, and fuel cell vehicles (see 40 CFR 1037.150(i)).  As the agencies stated in the Phase 1 final rule, the Phase 1 standards were not premised on the use of advanced technologies but we expected these advanced technologies to be an important part of the Phase 2 rulemaking (76 FR 57133, September 15, 2011).  The proposed Phase 2 heavy-duty engine and vehicles standards are premised on the use of some advanced technologies, making them equivalent to other fuel-saving technologies in this context.   We believe the Phase 2 standards themselves would provide sufficient incentive to develop them.
We request comment on this issue, especially with respect to electric vehicle, plug-in hybrid, and fuel cell technologies.  Although the proposed standards are premised on some use of Rankine cycle engines and hybrid powertrains, none of the proposed standards are based on projected utilization of the use of the other advanced technologies.  (Note that the most stringent alternative is based on some use of these technologies.)  Commenters are encouraged to consider the recently adopted light-duty program, which includes temporary incentives for these technologies. 
Innovative Technology and Off-Cycle Credits
The agencies propose to largely continue the Phase 1 innovative technology program but to redesignate it as an off-cycle program for Phase 2.  In other words, beginning in MY 2021 technologies that are not fully accounted for in the GEM simulation tool, or by compliance dynamometer testing would be considered off-cycle, including those technologies that may no longer be considered innovative technologies.  
The agencies propose to maintain that, in order for a manufacturer to receive credits for Phase 2, the off-cycle technology would still need to meet the requirement that it was not in common use prior to MY 2010.  Although, we have not identified specific off-cycle technologies at this time that should be excluded, we believe it may be prudent to continue this requirement to avoid the potential for manufacturers to receive windfall credits for technologies that they were already using before MY 2010.  Nevertheless, the agencies seek comment on whether off-cycle technologies in the Phase 2 program should be limited in this way.  In particular, the agencies are concerned that because the proposed Phase 2 program would be implemented MY 2021 and may extend beyond 2027, the agencies and manufacturers may have difficulty in the future determining whether an off-cycle technology was in common use prior to MY 2010.  Moreover, because we have not identified a single off-cycle technology that should be excluded by this provision at this time, we are concerned that this approach may create an unnecessary hindrance to the off-cycle program.
Manufacturers would be able to carry over an innovative technology credits from Phase 1 into Phase 2, subject to the same restrictions as other credits.  Manufacturers would also be able to carry over the improvement factor (not the credit value) of a technology, if certain criteria were met.  The agencies would require documentation for all off-cycle requests similar to those required by EPA for its light-duty GHG program.
Additionally, NHTSA would not grant any off-cycle credits for crash avoidance technologies.  NHTSA would also require manufacturers to consider the safety of off-cycle technologies and would request a safety assessment from the manufacturer for all off-cycle technologies.  
The agencies seek comment on these proposed changes, as well as the possibility of adopting aspects of the light-duty off-cycle program.
Alternative Fuels
The agencies are proposing to largely continue the Phase 1 approach for engines and vehicles fueled by fuels other than gasoline and diesel.  Phase 1 engine emission standards applied uniquely for gasoline-fueled and diesel-fueled engines.  The regulations in 40 CFR part 86 implement these distinctions for alternative fuels by dividing engines into Otto-cycle and Diesel-cycle technologies based on the combustion cycle of the engine.  The agencies are, however, proposing a small change that is described in Section II.  Under the proposed change, we would require manufacturers to divide their natural gas engines into primary intended service classes, like the current requirement for compression-ignition engines.  Any alternative fuel-engine qualifying as a medium heavy-duty engine or a heavy heavy-duty engine would be subject to all the emission standards and other requirements that apply to compression-ignition engines.  Note that this small change in approach would also apply with respect to EPA's criteria pollutant program.
We are also proposing that the Phase 2 standards apply exclusively at the vehicle tailpipe.  That is, compliance is based on vehicle fuel consumption and GHG emission reductions, and does not reflect any so-called lifecycle emission properties.  The agencies have explained why it is reasonable that the heavy duty standards be fuel neutral in this manner.  See 76 FR 57123; see also 77 FR at 51705 (Aug. 24. 2012) and 77 FR at 51500 (Aug. 27, 2012).  In particular, EPA notes that there is a separate, statutorily-mandated program under the Clean Air Act which encourages use of renewable fuels in transportation fuels, including renewable fuel used in heavy-duty diesel engines.  This program considers lifecycle greenhouse gas emissions compared to petroleum fuel.  NHTSA notes that the fuel efficiency standards are necessarily tailpipe-based, and that a lifecycle approach would likely render it impossible to harmonize the fuel efficiency and GHG emission standards, to the great detriment of our goal of achieving a coordinated program.  77 FR  51500-501; see also 77 FR 51705 (similar finding by EPA); see also section I.F. (1) (a) below.  
One consequence of the tailpipe-based approach is that the agencies are proposing to treat vehicles powered by electricity the same as in Phase 1.  In Phase 1, EPA treated all electric vehicles as having zero emissions of CO2, CH4, and N2O (see 40 CFR 1037.150(f)).  Similarly, NHTSA adopted regulations in Phase 1 that set the fuel consumption standards based on the fuel consumed by the vehicle.  The agencies also did not require emission testing for electric vehicles in Phase 1.  The agencies considered the potential unintended consequence of not accounting for upstream emissions from the charging of heavy-duty electric vehicles.  In our reassessment for Phase 2, we have not found any all-electric heavy-duty vehicles that have certified by 2014.  As we look to the future, we project very limited adoption of all-electric vehicles into the market.  Therefore, we believe that this provision is still appropriate.  Unlike the 2017-2025 light-duty rule, which included a cap whereby upstream emissions would be counted after a certain volume of sales (see 77 FR 62816-62822), we believe there is no need to propose a cap for heavy-duty vehicles because of the small likelihood of significant production of EV technologies in the Phase 2 timeframe.  We welcome comments on this approach.   Note that we also request comment on upstream emissions for natural gas in Section XI. 
Phase 1 Interim Provisions
EPA adopted several flexibilities for the Phase 1 program (40 CFR 1036.150 and 1037.150) as interim provisions.  Because the existing regulations do not have an end date for Phase 1, most of these provisions did not have an explicit end date.  NHTSA adopted similar provisions.  With few exceptions, the agencies are proposing not to apply these provisions to Phase 2.  These will generally remain in effect for the Phase 1 program.  In particular, the agencies note that we do not propose to continue the blanket exemption for small manufacturers.  Instead, the agencies propose to adopt narrower and more targeted relief.
    Proposed Phase 2 Standards
This section briefly summarizes the proposed Phase 2 standards for each category and identifies the technologies that the agencies project would be needed to meet the standards.  Given the large number of different regulatory categories and model years for which separate standards are being proposed, the actual numerical standards are not listed.  Readers are referred to Sections II through IV for the tables of proposed standards.
Summary of the Proposed Engine Standards
The agencies are proposing to continue the basic Phase 1 structure for the Phase 2 engine standards.  There would be separate standards and test cycles for tractor engines, vocational diesel engines, and vocational gasoline engines.  However, as described in Section II, we are proposing a revised test cycle for tractor engines to better reflect actual in-use operation.
For diesel engines, the agencies are proposing standards for MY 2027 requiring reduction in CO2 emissions and fuel consumption of 4.2 percent better than the 2017 baseline.   We are proposing more accelerated standards for MY 2021 and MY 2024, requiring reductions in CO2 emissions and fuel consumption of 1.5 to 3.7 percent better than the 2017 baseline.  The agencies project that these reductions would be feasible based on technological changes that would improve combustion and reduce energy losses.  For most of these improvements, the agencies project manufacturers will begin applying them to about 50 percent of their heavy-duty engines by 2021, and ultimately apply them to about 90 percent of their heavy-duty engines by 2024.  However, for some of these improvements we project more limited application rates.  In particular, we project limited use of waste exhaust heat recovery systems in 2027, projecting that about 15 percent of tractor engines (and no vocational engines) would employ some form of waste heat recovery.  Although we see great potential for waste heat recovery systems to achieve significant fuel savings and CO2 emission reductions, we are not projecting that the technology could be available for more wide-spread use in this time frame.  
For gasoline vocational engines, we are not proposing new more stringent engine standards.  Gasoline engines used in vocational vehicles are generally the same engines as are used in the complete HD pickups and vans in the Class 2b and 3 weight categories.   Given the relatively small sales volumes for gasoline-fueled vocational vehicles, manufacturers typically cannot afford to invest significantly in developing separate technology for these engines.  Thus, we project that vocational gasoline engines would include the same technology as would be used to meet the pickup and van chassis standards, and this would result in some real world reductions in CO2 emissions and fuel consumption.  Although it is difficult at this time, to project how much improvement would be observed during certification testing, it seems likely that these improvements would reduce measured CO2 emissions and fuel consumption by about one percent.  Therefore, we are requesting comment on finalizing a Phase 2 standard of 621 g/hp-hr for gasoline engines (i.e., one percent more stringent than the 2016 Phase 1 standard of 627 g/hp-hr) in MY 2027.  We note that the proposed MY 2027 vehicle standards for gasoline-fueled vocational vehicles are predicated in part on the use of advanced friction reduction technology with effectiveness over the GEM cycles of about one percent.  We also request comment on whether not proposing more stringent standards for gasoline engines would create an incentive for purchasers who would have otherwise chosen a diesel vehicle to instead choose a gasoline vehicle.

Table I-2 Engines in Combination Tractors and Vocational Vehicles
                                       

                                Phase 1 Program
                   Alternative 3 - 2027 (proposed standard)
               Alternative 4  -  2024 (also under consideration)
Covered in this category 
Engines installed in tractors and vocational chassis.
Share of HDV fuel consumption and GHG emissions
Combination tractors and vocational vehicles account for approximately 85 percent of fuel use and GHG emissions in the medium and heavy duty truck sector.
Per vehicle fuel consumption and CO2 improvement 
5%-9% improvement over 2010 MY baseline, depending vehicle application. Improvements are in addition to improvements from tractor and vocational vehicle standards.
4% improvement over 2017 MY for diesel engines.  Note that improvements are captured in complete vehicle tractor and vocational vehicle standards, so that engine improvements and the vehicle improvement shown below are not additive.
Form of the standard
EPA: CO2 grams/horsepower-hour and NHTSA: gallons of fuel/horsepower-hour
Technology options to help manufacturers meet standards 
Combustion, air handling, friction and emissions after-treatment technology improvements
Further technology improvements and increased use of all Phase 1 technologies, plus waste heat recovery systems for tractor engines (e.g., turbo-compound and Rankine)
Flexibilities

ABT program which allows emissions and fuel consumption credits to be averaged, banked, or traded.  Manufacturers allowed to carry-forward credit deficits for up to three model years.  Interim incentives for advanced technologies, recognition of innovative (off-cycle) technologies not accounted for by the HD Phase 1 test procedures, and credits for certifying early.
Same as Phase 1, except no advanced technology incentives. 


Summary of the Proposed Tractor Standards 
As explained in Section III, the agencies are proposing to largely continue the Phase 1 tractor program but to propose new standards.  The tractor standards proposed for MY 2027 would achieve up to 24 percent lower CO2 emissions and fuel consumption than a 2017 model year Phase 1 tractor.  The agencies project that the proposed 2027 tractor standards could be met through improvements in the:
         * Engine (including some use of waste heat recovery systems)
         * Transmission
         * Driveline
         * Aerodynamic design
         * Tire rolling resistance
         * Idle Performance
         * Other accessories of the tractor.  
The agencies' evaluation shows that some of these technologies are available today, but have very low adoption rates on current vehicles, while others will require some lead time for development.  The agencies are proposing to enhance the GEM vehicle simulation tool to recognize these technologies, as described in Section II.C.
We have also determined that there is sufficient lead time to introduce many of these tractor and engine technologies into the fleet at a reasonable cost starting in the 2021 model year.  The proposed 2021 model year standards for combination tractors and engines would achieve up to 13 percent lower CO2 emissions and fuel consumption than a 2017 model year Phase 1 tractor, and the 2024 model year standards would achieve up to 20 percent lower CO2 emissions and fuel consumption.

Table I-3 Class 7 and Class 8 Combination Tractors
                                       

                                Phase 1 Program
                   Alternative 3 - 2027 (proposed standard)
               Alternative 4  -  2024 (also under consideration)
Covered in this category 
Tractors that are designed to pull trailers and move freight.
Share of HDV fuel consumption and GHG emissions
Combination tractors and their engines account for approximately two thirds of fuel use and GHG emissions in the medium and heavy duty truck sector.
Per vehicle fuel consumption and CO2 improvement 
10%-23% improvement over 2010 MY baseline, depending on tractor category. Improvements are in addition to improvements from engine standards.
18%-24% improvement over MY 2017 standards
Form of the standard
EPA: CO2 grams/ton payload mile and NHTSA: gallons of fuel/1,000 ton payload mile
Technology options to help manufacturers meet standards 
Aerodynamic drag improvements; low rolling resistance tires; high strength steel and aluminum weight reduction; extended idle reduction; and speed limiters
Further technology improvements and increased use of all Phase 1 technologies, plus engine improvements, improved and automated transmissions and axles, powertrain optimization, tire inflation systems, and predictive cruise control (depending on tractor type)
Flexibilities

ABT program which allows emissions and fuel consumption credits to be averaged, banked, or traded.  Manufacturers allowed to carry-forward credit deficits for up to three model years.  Interim incentives for advanced technologies, recognition of innovative (off-cycle) technologies not accounted for by the HD Phase 1 test procedures, and credits for certifying early.
Same as Phase 1, except no extra credits for advanced technologies or early certification.

Summary of the Proposed Trailer Standards 
This NPRM proposes a set of GHG emission and fuel consumption standards for manufacturers of new trailers that are used in combination with tractors that would significantly reduce CO2 and fuel consumption from combination tractor-trailers nationwide over a period of several years.  As described in Section IV, there are numerous aerodynamic and tire technologies available to manufacturers to accomplish these proposed standards.  For the most part, these technologies have already been introduced into the market to some extent through EPA's voluntary SmartWay program.  However, adoption is still somewhat limited.  
The agencies are proposing incremental levels of Phase 2 standards that would apply beginning in MY 2018 and be fully phased-in by 2027.  These standards are predicated on use of aerodynamic and tire improvements, with trailer OEMs making incrementally greater improvements in MYs 2021 and 2024 as standard stringency increases in each of those model years.  EPA's GHG emission standards would be mandatory beginning in MY 2018, while NHTSA's fuel consumption standards would be voluntary beginning in MY 2018, and be mandatory beginning in MY 2021.    
As described in Section XV.D and Chapter 12 of the draft RIA, the agencies are proposing special provisions to minimize the impacts on small trailer manufacturers.  These provisions have been informed by and are largely consistent with recommendations coming from the SBAR Panel that EPA conducted pursuant to Section 609(b) of the Regulatory Flexibility Act (RFA).  Broadly, these provisions provide additional lead time for small manufacturers, as well as simplified testing and compliance requirements.  The agencies are also requesting comment on whether there is a need for additional provisions to address small business issues.

Table I-4 Trailers
                                       

                                Phase 1 Program
                   Alternative 3 - 2027 (proposed standard)
               Alternative 4  -  2024 (also under consideration)
Covered in this category 
Trailers hauled by low, mid, and high roof day and sleeper cab tractors, except those qualified as logging, mining, stationary or heavy-haul.
Share of HDV fuel consumption and GHG emissions
Trailers are modeled together with combination tractors and their engines.  Together, they account for approximately two thirds of fuel use and GHG emissions in the medium and heavy duty truck sector.  
Per vehicle fuel consumption and CO2 improvement  
                                      N/A
Between 3% and 8% improvement over MY 2017 baseline, depending on the trailer type.

Form of the standard
                                      N/A
EPA: CO2 grams/ton payload mile and                  NHTSA:  gallons /1,000 ton payload mile
Technology options to help manufacturers meet standards 
                                      N/A
Low rolling resistance tires, automatic tire inflation systems, weight reduction for most trailers, aerodynamic improvements such as side and rear fairings, gap closing devices, and undercarriage treatment for  box-type trailers (e.g., dry and refrigerated vans) 
Flexibilities
                                      N/A
One year delay in implementation for small businesses, trailer manufacturers may use pre-approved devices to avoid testing, averaging program for manufacturers of dry and refrigerated box trailers
Summary of the Proposed Vocational Vehicle Standards 
As explained in Section V, the agencies are proposing to revise the Phase 1 vocational vehicle program and to propose new standards.    These proposed standards also reflect further sub-categorization from Phase 1, with separate proposed standards based on mode of operation: urban, regional, and multi-purpose.  The agencies are also proposing alternative standards for emergency vehicles.  
The agencies project that the proposed MY vocational vehicle standards could be met through improvements in the engine, transmission, driveline, lower rolling resistance tires, workday idle reduction technologies, and weight reduction, plus some application of hybrid technology.  These are described in Section V of this preamble and in Chapter 2.9 of the draft RIA.  These MY 2027 standards would achieve up to 16 percent lower CO2 emissions and fuel consumption than MY 2017 Phase 1 standards.  The agencies are also proposing revisions to the compliance regime for vocational vehicles.  These include: the addition of an idle cycle that would be weighted along with the other drive cycles; and revisions to the vehicle simulation tool to reflect specific improvements to the engine, transmission, and driveline. 
Similar to the tractor program, we have determined that there is sufficient lead time to introduce many of these new technologies into the fleet starting in MY 2021.  Therefore, we are proposing new standards for MY 2021 and 2024.  Based on our analysis, the MY 2021 standards for vocational vehicles would achieve up to 7 percent lower CO2 emissions and fuel consumption than a MY 2017 Phase 1 vehicle, on average, and the MY 2024 standards would achieve up to 11 percent lower CO2 emissions and fuel consumption.
In Phase 1, EPA adopted air conditioning (A/C) refrigerant leakage standards for tractors, as well as for heavy-duty pickups and vans, but not for vocational vehicles.   For Phase 2, EPA believes that it would be feasible to apply similar A/C refrigerant leakage standards for vocational vehicles, beginning with the 2021 model year.  The process for certifying that low leakage components are used would follow the system currently in place for comparable systems in tractors.

Table I-5 Vocational Vehicle Chassis
                                       

                                Phase 1 Program
                   Alternative 3 - 2027 (proposed standard)
               Alternative 4  -  2024 (also under consideration)
Covered in this category 
Class 2b  -  8 chassis that are intended for vocational services such as delivery vehicles, emergency vehicles, dump truck, tow trucks, cement mixer, refuse trucks, etc., except those qualified as off-highway vehicles.
Because of sector diversity, vocational vehicle chassis are segmented into Light, Medium and Heavy Duty vehicle categories and for Phase 2 each of these segments are further subdivided using three duty cycles:  Regional, Multi-purpose, and Urban.
Share of HDV fuel consumption and GHG emissions
Vocational vehicles account for approximately 20 percent of fuel use and GHG emissions in the medium and heavy duty truck sector categories 
Per vehicle fuel consumption and CO2 improvement
2% improvement over MY 2010 baseline.
Improvements are in addition to improvements from engine standards.
Up to 16% improvement over MY 2017 standards
Form of the standard
EPA: CO2 grams/ton payload mile and NHTSA: gallons of fuel/1,000 ton payload mile 
Technology options to help manufacturers meet standards 
Low rolling resistance tires 
Further technology improvements and increased use of Phase 1 technologies, plus improved transmissions and axles, powertrain optimization, weight reduction, hybrids, and workday idle reduction systems.
Flexibilities  

ABT program which allows emissions and fuel consumption credits to be averaged, banked, or traded.  Manufacturers allowed to carry-forward credit deficits for up to three model years.  Interim incentives for advanced technologies, recognition of innovative (off-cycle) technologies not accounted for by the HD Phase 1 test procedures, and credits for certifying early.
Same as Phase 1, except no advanced technology incentives. 

Chassis intended for emergency vehicles have proposed Phase 2 standards based only on Phase 1 technologies, and may continue to certify using a simplified Phase 1-style GEM tool.


Summary of the Proposed Heavy-Duty Pickup and Van Standards 
The agencies are proposing to adopt new Phase 2 GHG emission and fuel consumption standards for heavy-duty pickups and vans that would be applied in largely the same manner as the Phase 1 standards.  These standards would effectively require the extensive use of most known and proven technologies, and could result in some use of strong hybrid powertrain technology.  These proposed standards would commence in MY 2021.  Overall, the proposed standards are 16 percent more stringent by 2027.

Table I-6 HD Pickups and Vans
                                       

                                Phase 1 Program
                   Alternative 3 - 2027 (proposed standard)
               Alternative 4  -  2025 (also under consideration)
Covered in this category 
Class 2b and 3 complete pickup trucks and vans, including all work vans and 15-passenger vans but excluding 12-passenger vans which are subject to light-duty standards.
Share of HDV fuel consumption and GHG emissions
HD pickups and vans account for approximately 15% of fuel use and GHG emissions in the medium and heavy duty truck sector.
Per vehicle fuel consumption and CO2 improvement 
15% improvement over 2010 MY baseline
                  16% improvement over MY 2018-2020 standards
Form of the standard
Phase 1 standards are based upon a "work factor" attribute that combines truck payload and towing capabilities, with an added adjustment for 4-wheel drive vehicles.  There are separate target curves for diesel-powered and gasoline-powered vehicles.  As proposed, the Phase 2 standards would be based on the same approach.
Technology options to help manufacturers meet standards 
Engine improvements, transmission improvements, aerodynamic drag improvements, low rolling resistance tires, weight reduction, and improved accessories.
Further technology improvements and increased use of all Phase 1 technologies, plus engine stop-start, and powertrain hybridization (mild and strong).
Flexibilities    

Two optional phase-in schedules; ABT program which allows emissions and fuel consumption credits to be averaged, banked, or traded (five year credit life).  Manufacturers allowed to carry-forward credit deficits for up to three model years.  Interim incentives for advanced technologies, recognition of innovative (off-cycle) technologies not accounted for by the HD Phase 1 test procedures, and credits for certifying early.

Proposed to be same as Phase 1, with phase-in schedule based on year-over-year increase in stringency. Adjustment factor of 1.25 proposed for credits carried forward from Phase 1 to Phase 2 due to proposed change in useful life. Proposed cessation of advanced technology incentives in 2021 and continuation of off-cycle credits.

Summary of the Costs and Benefits of the Proposed Rule
This section summarizes the projected costs and benefits of the proposed NHTSA fuel consumption and EPA GHG emission standards, along with those of Alternative 4.  These projections helped to inform the agencies' choices among the alternatives considered, along with other relevant factors, and NHTSA's Draft Environmental Impact Statement (DEIS).  See Sections VII through IX and the Draft RIA for additional details about these projections.
For this rule, the agencies conducted coordinated and complementary analyses using two analytical methods for the heavy-duty pick up and van segment by employing both DOT's CAFE model and EPA's MOVES model.  The agencies used EPA's MOVES model to estimate fuel consumption and emissions impacts for tractor-trailers (including the engine that powers the tractor), and vocational vehicles (including the engine that powers the vehicle).  Additional calculations were performed to determine corresponding monetized program costs and benefits.  For heavy-duty pickups and vans, the agencies performed complementary analyses, which we refer to as "Method A" and "Method B."  In Method A, the CAFE model was used to project a pathway the industry could use to comply with each regulatory alternative and the estimated effects on fuel consumption, emissions, benefits and costs.  In Method B, the CAFE model was used to project a pathway the industry could use to comply with each regulatory alternative, along with resultant impacts on per vehicle costs, and the MOVES model was used to calculate corresponding changes in total fuel consumption and annual emissions.  Additional calculations were performed to determine corresponding monetized program costs and benefits.  NHTSA considered Method A as its central analysis and Method B as a supplemental analysis.  EPA considered the results of both methods.  The agencies concluded that both methods led the agencies to the same conclusions and the same selection of the proposed standards.  See Section VII for additional discussion of these two methods.  
    Reference Case against Which Costs and Benefits are Calculated
The No Action Alternative for today's analysis, alternatively referred to as the "baseline" or "reference case," assumes that the agencies would not issue new rules regarding MD/HD fuel efficiency and GHG emissions.  This is the baseline against which costs and benefits for the proposed standards are calculated.  The reference case assumes that model year 2018 standards would be extended indefinitely and without change.
The agencies recognize that if the proposed rule is not adopted, manufacturers will continue to introduce new heavy-duty vehicles in a competitive market that responds to a range of factors.  Thus manufacturers might have continued to improve technologies that to reduce heavy-duty vehicle fuel consumption.  Thus, as described in Section VII, both agencies fully analyzed the proposed standards and the regulatory alternatives against two reference cases.  The first case uses a baseline that projects very little improvement in new vehicles in the absence of new Phase 2 standards, and the second uses a more dynamic baseline that projects more significant improvements in vehicle fuel efficiency.  NHTSA considered its primary analysis to be based on the more dynamic baseline, where certain cost-effective technologies are assumed to be applied by manufacturers to improve fuel efficiency beyond the Phase 1 requirements in the absence of new Phase 2 standards.  EPA considered both reference cases.  The results for all of the regulatory alternatives relative to both reference cases, derived via the same methodologies discussed in this section, are presented in Section X of the preamble.
    Costs and Benefits Projected for the Standards Being Proposed and Alternative 4
The tables below summarize the benefits and costs for the program in two ways: first, from the perspective of a program designed to improve the Nation's energy security and to conserve energy by improving fuel efficiency and then from the perspective of a program designed to reduce GHG emissions.  The individual categories of benefits and costs presented in the tables below are defined more fully and presented in more detail in Chapter 8 of the draft RIA.  
Table I-7 shows benefits and costs for the proposed standards and Alternative 4 from the perspective of a program designed to improve the Nation's energy security and conserve energy by improving fuel efficiency.  From this viewpoint, technology costs occur when the vehicle is purchased, just as they do from a GHG-reduction perspective.  However, fuel savings are counted as benefits that occur over the lifetimes of the vehicles produced during the model years subject to the Phase 2 standards as they consume less fuel, rather than as negative costs experienced either at the time of purchase or over the lifetimes of these vehicles.

Table I-7 Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for Model Years 2018 - 2029 Vehicles Using Analysis Method A (Billions of 2012$) [a]
                                   Category
                                  Alternative

                                      3 
                                   Preferred
                                       4

                               3% Discount Rate
                               7% Discount Rate
                               3% Discount Rate
                               7% Discount Rate
Fuel Reductions (Billion Gallons)
                                 72.7  - 76.7
                                 81.8  -  86.7
GHG  reductions  (MMT CO2eq)
                                   932 - 990
                                  1056 - 1118

Vehicle Program: Technology and Indirect Costs, Normal Profit on Additional Investments
                                 25.0 ‒ 25.4
                                 16.8 ‒ 17.1
                                 32.9 ‒ 34.3
                                 22.5 ‒ 23.5
Additional Routine Maintenance
                                  1.0 ‒ 1.1
                                  0.6 ‒ 0.6
                                  1.0 ‒ 1.1
                                  0.6 ‒ 0.7
Congestion, Accidents, and Noise from Increased Vehicle Use
                                  4.5 ‒ 4.7
                                  2.6 ‒ 2.8
                                  4.7 ‒ 4.9
                                  2.7 ‒ 2.8
  Total Costs
                                 30.5 ‒ 31.1
                                 20.0 ‒ 20.5
                                 38.7 ‒ 40.8
                                 25.8 ‒ 27.0
 
Fuel Savings (valued at pre-tax prices)
                                165.1 ‒ 175.1
                                 89.2 ‒ 94.2
                                187.4 ‒ 198.3
                                102.0 ‒ 107.5
Savings from Less Frequent Refueling 
                                  2.9 ‒ 3.1
                                  1.5 ‒ 1.6
                                  3.4 ‒ 3.6
                                  1.8 ‒ 2.0
Economic Benefits from Additional Vehicle Use
                                 14.7 ‒ 15.1
                                  8.2 ‒ 8.4
                                 15.0 ‒ 15.4
                                  8.4 ‒ 8.6
Reduced Climate Damages from GHG Emissions [c]
                                 25.7 ‒ 27.4
                                 25.7 ‒ 27.4
                                 29.3 ‒ 31.0
                                 29.3 ‒ 31.0
Reduced Health Damages from Non-GHG Emissions
                                 12.4 ‒ 12.7
                                  6.6 ‒ 6.6
                                 13.1 ‒ 13.4
                                  6.9 ‒ 7.0
Increased U.S. Energy Security
                                  8.1 ‒ 8.9
                                  4.3 ‒ 4.7
                                 9.3 ‒ 10.2
                                  5.0 ‒ 5.5
  Total Benefits
                                229.0 ‒ 242.2
                                135.6 ‒ 143.0
                                257.4 ‒ 271.9
                                153.4 ‒ 161.6
                                       
  Net Benefits
                                198.5 ‒ 211.1
                                115.6 ‒ 122.5
                                218.8 ‒ 231.5
                                127.7 ‒ 134.6
a  Range reflects two reference case assumptions 1a and 1b. 
[b]  Benefits and net benefits use the 3 percent average SCC value applied only to CO2 emissions; GHG reductions include CO2, CH4, N2O and HFC reductions. Some fraction of these benefits is experienced outside the U.S.

Table I-8 shows benefits and cost from the perspective of reducing GHG.  From this perspective, the regulation's net effects on truck owners and operators are its costs, while the program's benefits are its external effects on the other sectors of the U.S. economy. 
Table I-8 Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for Model Years 2018 - 2029 Vehicles Using Analysis Method B (Billions of 2012$) a
                                   Category
                                  Alternative

                                      3 
                                   Preferred
                                       4

                               3% Discount Rate
                               7% Discount Rate
                               3% Discount Rate
                               7% Discount Rate
Fuel Reductions (Billion Gallons)
                                 70.2 to 75.8
                                 79.7 to 85.4
GHG  reductions  (MMT CO2eq)
                                963.2 to 1036.4
                               1090.0 to 1163.1

Vehicle Program (e.g., technology and indirect costs, normal profit on additional investments)
                                                               -$24.6 to -$25.1
                                                               -$16.3 to -$16.6
                                                               -$33.1 to -$33.5
                                                               -$22.2 to -$22.5
Additional Routine Maintenance
                                                                 -$1.1 to -$1.1
                                                                 -$0.6 to -$0.6
                                                                 -$1.1 to -$1.1
                                                                 -$0.6 to -$0.6
Fuel Savings (valued at pre-tax prices)
                                                               $159.1 to $171.1
                                                                 $84.2 to $90.1
                                                               $181.0 to $193.0
                                                                $96.5 to $102.5
Energy Security
                                                                   $8.5 to $9.3
                                                                   $4.4 to $4.8
                                                                  $9.8 to $10.6
                                                                   $5.2 to $5.6
Congestion, Accidents, and Noise from Increased Vehicle Use
                                                                 -$4.2 to -$4.3
                                                                 -$2.4 to -$2.4
                                                                 -$4.2 to -$4.3
                                                                 -$2.4 to -$2.4
Savings from Less Frequent Refueling 
                                                                   $2.8 to $3.1
                                                                   $1.4 to $1.6
                                                                   $3.3 to $3.6
                                                                   $1.7 to $1.9
Economic Benefits from Additional Vehicle Use
                                                                 $14.8 to $14.9
                                                                   $8.2 to $8.2
                                                                 $14.7 to $14.8
                                                                   $8.1 to $8.1
Benefits from Reduced Non-GHG Emissions [b]
                                                                  $7.5 to $17.7
                                                                   $3.4 to $8.3
                                                                  $7.8 to $18.4
                                                                   $3.6 to $8.6
Reduced Climate Damages from GHG Emissions [b]
                                $24.1 to $25.9
                                $27.4 to $29.2
  Net Benefits
                                                               $191.6 to $206.7
                                                               $108.8 to $117.1
                                                               $210.5 to $225.6
                                                               $119.6 to $128.0
a  Range reflects two baseline assumptions 1a and 1b. 
b  Range reflects both the two baseline assumptions 1a and 1b, and both low and high $/ton estimates for calculating benefits.
c  Benefits and net benefits use the 3 percent average SCCO2 value applied only to CO2 emissions; GHG reductions include CO2, CH4 and N2O reductions. 



Table I-9 Per Vehicle Costs 
                                       
                                       3
                              Proposed Standards
                                       4
                                       
                                    MY 2021
                                    MY 2024
                                    MY 2027
                                    MY 2021
                                    MY 2024
Per Vehicle Cost ($)[a]
                                       
                                       
                                       
                                       
                                       
  Tractors
                                    $6,710
                                    $9,940
                                    $11,680
                                    $10,230
                                    $12,430
  Trailers
                                     $900
                                    $1,010
                                    $1,170
                                    $1,080
                                    $1,230
  Vocational Vehicles
                                    $1,150
                                    $1,770
                                    $3,380
                                    $1,990
                                    $3,590
  Pick-ups/Vans
                                     $520
                                     $950
                                    $1,340
                                    $1,050
                                    $1,730
a Per vehicle costs include new engine and vehicle technology only; costs associated with increased insurance, taxes and maintenance are included in the payback period values.
[b] Calculated payback periods would be similar but slightly shorter using 3% discount rate
An important metric to vehicle purchasers is the payback period that can be expected on any new purchase. In other words, there is greater willingness to pay for new technology if that new technology "pays back" within an acceptable period of time.  The agencies make no effort to define the acceptable period of time, but seek to estimate the payback period for others to make the decision themselves.  The payback period is the point at which reduced fuel expenditures outpace increased vehicle costs, including increased maintenance, insurance premiums and taxes. The payback periods for vehicles meeting the standards considered for the final year of implementation (MY2024 for alternative 4 and MY2027 for the proposed standards) are shown in Table I-10, and similar for both Method A and Method B.

Table I-10 Payback Periods for MY2027 Vehicles under the Proposed Standards and for MY2024 Vehicles Under Alternative 4 (Payback Occurs in the Year Shown; using 7% Discounting)

Proposed Standards
Alternative 4
Tractors/Trailers
                                      2nd
                                      2nd
Vocational Vehicles
                                      6th
                                      6th
Pickups/Vans
                                      3rd
                                      4th

    Cost Effectiveness
These proposed regulations implement Section 32902 (k) of EISA and Section 202 (a) (1) and (2) of the Clean Air Act.  Through the 2007 EISA, Congress directed NHTSA to create a medium- and heavy-duty vehicle fuel efficiency program designed to achieve the maximum feasible improvement by considering appropriateness, cost-effectiveness, and technological feasibility to determine maximum feasible standards.  The Clean Air Act requires that any air pollutant emissions standards for heavy-duty vehicles and engines take into account the costs of any requisite technology and the lead time necessary to implement such technology.  Both agencies considered overall costs, overall benefits and cost effectiveness in developing the Phase 1 standards.  Although there are different ways to evaluate cost effectiveness, the essence is to consider some measure of costs relative to some measure of impacts.
   Considering that Congress enacted EPCA and EISA to, among other things, address the need to conserve energy, the agencies have evaluated the proposed standards in terms of costs per gallon of fuel conserved.  As described in the draft RIA, the agencies also evaluated the proposed standards using the same approaches employed in HD Phase 1.  Together, the agencies have considered the following three ratios of cost effectiveness:
   1. Total costs per gallon of fuel conserved.
   2. Technology costs per ton of GHG emissions reduced.
   3. Technology costs minus fuel savings per ton of GHG emissions reduced.
By all three of these measures, the proposed standards would be highly cost effective.
As discussed below, the agencies estimate that over the lifetime of heavy-duty vehicles produced for sale in the U.S. during model years 2018-2029, the proposed standards would cost about $30 billion and conserve about 75 billion gallons of fuel, such that the first measure of cost effectiveness would be about 40 cents per gallon.  Relative to fuel prices underlying the agencies' analysis, the agencies have concluded that today's proposed standards would be cost effective.
With respect to the second measure, which is useful for comparisons to other GHG rules, the proposed standards would have overall $/ton costs similar to the HD Phase 1 rule.  As Chapter 7 of the draft RIA shows, technology costs by themselves would amount to less than $50 per metric ton of GHG (CO2eq) for the entire HD Phase 2 program.  This compares well to both the HD Phase 1 rule, which was estimated to cost about $30 per metric ton of GHG (without fuel savings), and to the agencies' estimates of the social cost of carbon.  Thus, even without accounting for fuel savings, the proposed standards would be cost-effective.
The third measure deducts fuel savings from technology costs, which also is useful for comparisons to other GHG rules.  On this basis, net costs per ton of GHG emissions reduced would be negative under the proposed standards.  This means that the value of the fuel savings would be greater than the technology costs, and there would be a net cost saving for vehicle owners.  In other words, the technologies would pay for themselves (indeed, more than pay for themselves) in fuel savings.  
In addition, while the net economic benefits (i.e., total benefits minus total costs) of the proposed standards is not a traditional measure of their cost-effectiveness, the agencies have concluded that the total costs of the proposed standards are justified in part by their significant economic benefits.  As discussed in the previous subsection and in Section IX, this rule would provide benefits beyond the fuel conserved and GHG emissions avoided.  The rule's net benefits is a measure that quantifies each of its various benefits in economic terms, including the economic value of the fuel it saves and the climate-related damages it avoids, and compares their sum to the rule's estimated costs.  The agencies estimate that the proposed standards would result in net economic benefits exceeding $100 billion, making this a highly beneficial rule.
Our current analysis of Alternative 4 also shows that, if technologically feasible, it would have similar cost-effectiveness but with greater net benefits (see Chapter 11 of the draft RIA).  For example, the agencies estimate costs under Alternative 4 could be about $40 billion and about 85 billion gallons of fuel could be conserved, such that the first measure of cost effectiveness would be about 47 cents per gallon.  However, the agencies considered all of the relevant factors, not just relative cost-effectiveness, when selecting the proposed standards from among the alternatives considered.  Relative cost-effectiveness was not a limiting factor for the agencies in selecting the proposed standards. It is also worth noting that the proposed standards and the Alternative 4 standards appear very cost effective, regardless of which reference case is used for the baseline, such that all of the analyses reinforced the agencies' findings. 
EPA and NHTSA Statutory Authorities
This section briefly summarizes the respective statutory authority for EPA and NHTSA to promulgate the Phase 1 and proposed Phase 2 programs.  For additional details of the agencies' authority, see Section XV of this notice as well as the Phase 1 rule.
    EPA Authority
Statutory authority for the vehicle controls in this proposal is found in CAA Section 202(a)(1) and (2) (which requires EPA to establish standards for emissions of pollutants from new motor vehicles and engines which emissions cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare), Sections 202(d), 203-209, 216, and 301 of the CAA, 42 U.S.C. 7521 (a), 7521 (d), 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7550, and 7601.
Title II of the CAA provides for comprehensive regulation of mobile sources, authorizing EPA to regulate emissions of air pollutants from all mobile source categories.  When acting under Title II of the CAA, EPA considers such issues as technology effectiveness, its cost (both per vehicle, per manufacturer, and per consumer), the lead time necessary to implement the technology, and based on this the feasibility and practicability of potential standards; the impacts of potential standards on emissions reductions of both GHGs and non-GHG emissions; the impacts of standards on oil conservation and energy security; the impacts of standards on fuel savings by customers; the impacts of standards on the truck industry; other energy impacts; as well as other relevant factors such as impacts on safety.
This proposed action implements a specific provision from Title II, Section 202(a).  Section 202(a)(1) of the CAA states that "the Administrator shall by regulation prescribe (and from time to time revise)...standards applicable to the emission of any air pollutant from any class or classes of new motor vehicles ..., which in his judgment cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare."  With EPA's December 2009 final findings that certain greenhouse gases may reasonably be anticipated to endanger public health and welfare and that emissions of GHGs from Section 202 (a) sources cause or contribute to that endangerment, Section 202(a) requires EPA to issue standards applicable to emissions of those pollutants from new motor vehicles.  See Coalition for Responsible Regulation v. EPA, 684 F. 3d at 116-125, 126-27 (upholding EPA's endangerment and cause and contribute findings, and further affirming EPA's conclusion that it is legally compelled to issue standards under Section 202 (a) to address emission of the pollutant which endangers after making the endangerment and cause of contribute findings); see also id. at 127-29 (upholding EPA's light-duty GHG emission standards for MYs 2012-2016 in their entirety).
Other aspects of EPA's legal authority, including it authority under Section 202 (a), its testing authority under Section 203 of the Act, and its enforcement authorities under Section 207 of the Act are discussed fully in the Phase 1 rule, and need not be repeated here.  See 76 FR 57129-130.
The proposed rule includes GHG emission and fuel efficiency standards applicable to trailers  -  an essential part of the tractor-trailer motor vehicle.  Class 7/8 heavy-duty vehicles are composed of three major components:  -  the engine, the cab-chassis (i.e. the tractor), and the trailer.  The fact that the vehicle consists of two detachable parts does not mean that either of the parts is not a motor vehicle.  The trailer's sole purpose is to serve as the cargo-hauling part of the vehicle.  Without the tractor, the trailer cannot transport property.  The tractor is likewise incomplete without the trailer.  The motor vehicle needs both parts, plus the engine, to accomplish its intended use.  Connected together, a tractor and trailer constitute ``a self-propelled vehicle designed for transporting . . . property on a street or highway,'' and thus meet the definition of ``motor vehicle'' under Section 216(2) of the CAA.  Thus, as EPA has previously explained, we interpret our authority to regulate motor vehicles to include authority to regulate such trailers.  See 79 FR 46259 (August 7, 2014).     
This analysis is consistent with definitions in the Federal regulations issued under the CAA at 40 CFR 86.1803.01, where a heavy-duty vehicle ``that has the primary load carrying device or container attached'' is referred to as a ``[c]omplete heavy-duty vehicle,'' while a heavy-duty vehicle or truck ``which does not have the primary load carrying device or container attached'' is referred to as an ``[i]ncomplete heavy- duty vehicle'' or ``[i]ncomplete truck.'' The trailers that would be covered by this proposal are properly considered ``the primary load carrying device or container'' for the heavy-duty vehicles to which they become attached for use.  Therefore, under these definitions, such trailers are implicitly part of a ``complete heavy-duty vehicle,'' and thus part of a ``motor vehicle.''[,]
The argument that trailers do not themselves emit pollutants and so are not subject to emission standards is also unfounded.  First, the argument lacks a factual predicate.  Trailers indisputably contribute to the motor vehicle's CO2 emissions by increasing engine load, and these emissions can be reduced through various means such as trailer aerodynamic and tire rolling resistance improvements. See Section IV below.  The argument also lacks a legal predicate.  Section 202 (a) (1) authorizes standards applicable to emissions of air pollutants "from" either the motor vehicle or the engine.  There is no requirement that pollutants be emitted from a specified part of the motor vehicle or engine.  And indeed, the argument proves too much, since tractors and vocational vehicles likewise contribute to emissions (by the same mechanisms that trailers do) but do not themselves directly emit pollutants.  The fact that Section 202 (a)(1) applies explicitly to both motor vehicles and engines likewise indicates that EPA has unquestionable authority to interpret pollutant emission caused by the vehicle component to be "from" the motor vehicle and so within its regulatory authority under Section 202 (a)(1). 
    NHTSA Authority
The Energy Policy and Conservation Act (EPCA) of 1975 mandates a regulatory program for motor vehicle fuel economy to meet the various facets of the need to conserve energy.  In December 2007, Congress enacted the Energy Independence and Security Act (EISA), amending EPCA to require, among other things, the creation of a medium- and heavy-duty fuel efficiency program for the first time.    
Statutory authority for the fuel consumption standards in this proposed rule is found in EISA Section 103, 49 U.S.C. 32902(k).  This section authorizes a fuel efficiency improvement program, designed to achieve the maximum feasible improvement to be created for commercial medium- and heavy-duty on-highway vehicles and work trucks, to include appropriate test methods, measurement metrics, standards, and compliance and enforcement protocols that are appropriate, cost-effective and technologically feasible.  
NHTSA has responsibility for fuel economy and consumption standards, and assures compliance with EISA through rulemaking, including standard-setting; technical reviews, audits and studies; investigations; and enforcement of implementing regulations including penalty actions.  This proposed rule would continue to fulfill the requirements of Section 103 of EISA, which instructs NHTSA to create a fuel efficiency improvement program for "commercial medium- and heavy-duty on-highway vehicles and work trucks"  by rulemaking, which is to include standards, test methods, measurement metrics, and enforcement protocols.  See 49 U.S.C. 32902(k)(2).
 Congress directed that the standards, test methods, measurement metrics, and compliance and enforcement protocols be "appropriate, cost-effective, and technologically feasible" for the vehicles to be regulated, while achieving the "maximum feasible improvement" in fuel efficiency. NHTSA has broad discretion to balance the statutory factors in Section 103 in developing fuel consumption standards to achieve the maximum feasible improvement.
As discussed in the Phase 1 final rule notice, NHTSA has determined that the five year statutory limit on average fuel economy standards that applies to passengers and light trucks is not applicable to the HD vehicle and engine standards.  As a result, the Phase 1 HD engine and vehicle standards remain in effect indefinitely at their 2018 or 2019 MY levels until amended by a future rulemaking action. As was contemplated in that notice, NHTSA is currently engaging in this Phase 2 rulemaking action.  Therefore, the Phase 1 standards would not remain in effect at their 2018 or 2019 MY levels indefinitely; they would remain in effect until the MY Phase 2 standards apply.  In accordance with Section 103 of EISA, NHTSA will ensure that not less than four full MYs of regulatory lead-time and three full MYs of regulatory stability are provided for in the Phase 2 standards. 
Authority to Regulate Trailers
As contemplated in the Phase 1 NPRM and FR, the agencies are proposing standards for trailers in this rulemaking.  Because Phase 1 did not include standards for trailers, NHTSA did not discuss its authority for regulating them in the NPRM or FR; that authority is described here
EISA directs NHTSA to "determine in a rulemaking proceeding how to implement a commercial medium- and heavy-duty on-highway vehicle and work truck fuel efficiency improvement program designed to achieve the maximum feasible improvement...."  EISA defines a commercial medium- and heavy-duty on-highway vehicle to mean "an on-highway vehicle with a GVWR of 10,000 pounds or more."  A "work truck" is defined as a vehicle between 8,500 and 10,000 pounds GVWR that is not an MDPV.  These definitions do not explicitly exclude trailers, in contrast to MDPVs.  Because Congress did not act to exclude trailers when defining GVWRs, despite demonstrating the ability to exclude MDPVs, it is reasonable to interpret the provision to include them.  
Both commercial medium- and heavy-duty on-highway vehicles and work trucks, though, must be vehicles in order to be regulated under this program. Although EISA does not define the term "vehicle," NHTSA's authority to regulate motor vehicles under its organic statute, the Motor Vehicle Safety Act ("Safety Act"), does.  The Safety Act defines a motor vehicle as "a vehicle driven or drawn by mechanical power and manufactured primarily for use on public streets, roads, and highways...."  NHTSA clearly has authority to regulate trailers under this Act as vehicles that are drawn and has exercised that authority numerous times.  Given the absence of any apparent contrary intent on the part of Congress in EISA, NHTSA believes it is reasonable to interpret the term "vehicle" as used in the EISA definitions to have a similar meaning that includes trailers.  
Furthermore, the general definition of a vehicle is something used to transport goods or persons from one location to another.  A tractor-trailer is designed for the purpose of transporting goods.  Therefore it is reasonable to consider all of its parts  -  the engine, the cab-chassis, and the trailer  -  as parts of a whole.  As such they are all parts of a vehicle, and are captured within the definition of vehicle.  As EPA describes above, the tractor and trailer are both incomplete without the other.  Neither can fulfill the function of the vehicle without the other.  For this reason, and the other reasons stated above, NHTSA interprets its authority to regulate commercial medium- and heavy-duty on-highway vehicles, including tractor-trailers, as encompassing both tractors and trailers.
	Authority to Regulate Recreational Vehicles
NHTSA did not regulate recreational vehicles as part of the Phase 1 medium- and heavy-duty fuel consumption standards, although EPA did regulate them as vocational vehicles for GHG emissions.  In the Phase 1 NPRM, NHTSA interpreted "commercial medium- and heavy duty" to mean that recreational vehicles, such as motor homes, were not to be included within the program because recreational vehicles are not commercial.  Oshkosh Corporation submitted a comment on the agency's interpretation stating that it did not match the statutory definition of "commercial medium- and heavy-duty on-highway vehicle," which defines the phrase by GVWR and on-highway use.  In the Phase 1 final rule NHTSA agreed with Oshkosh Corporation that the agency had effectively read words into the statutory definition.  However, because recreational vehicles were not proposed in the Phase 1 NPRM, they were not within the scope of the rulemaking and were excluded from NHTSA's standards.  NHTSA expressed that it would address recreational vehicles in its next rulemaking.  
NHTSA is proposing that recreational vehicles be included in the Phase 2 fuel consumption standards.  As discussed above, EISA prescribes that NHTSA shall set average fuel economy standards for work trucks and commercial medium-duty or heavy-duty on-highway vehicles.  "Work truck" means a vehicle that is rated between 8,500 and 10,000 pounds GVWR and is not an MDPV.  "Commercial medium- and heavy-duty on-road highway vehicle" means an on-highway vehicle with a gross vehicle weight rating of 10,000 pounds or more.  Based on the definitions in EISA, recreational vehicles would be regulated as class 2b-8 vocational vehicles.  Excluding recreational vehicles from the NHTSA standards in Phase 2 could create illogical results, including treating similar vehicles differently.  Moreover, including recreational vehicles under NHTSA regulations furthers the agencies' goal of one national program, as EPA regulations already cover recreational vehicles.   
NHTSA is proposing that recreational vehicles be included in the Phase 2 fuel consumption standards and that early compliance be allowed for manufacturers who want to certify during the Phase 1 period.  
Other Issues
In addition to the standards being proposed, this notice discusses several other issues related to those standards.  It also proposes some regulatory provisions related to the Phase 1 program, as well as amendments related to other EPA and NHTSA regulations.  These other issues are summarized briefly here and discussed in greater detail in later sections.
    Issues Related to Phase 2
Natural Gas Engines and Vehicles
This combined rulemaking by EPA and NHTSA is designed to regulate two separate characteristics of heavy duty vehicles:  GHGs and fuel consumption.  In the case of diesel or gasoline powered vehicles, there is a one-to-one relationship between these two characteristics.  For alternatively fueled vehicles, which use no petroleum, the situation is different.  For example, a natural gas vehicle that achieves approximately the same fuel efficiency as a diesel powered vehicle would emit 20 percent less CO2; and a natural gas vehicle with the same fuel efficiency as a gasoline vehicle would emit 30 percent less CO2.  Yet natural gas vehicles consume no petroleum.  In Phase 1, the agencies balanced these facts by applying the gasoline and diesel CO2 standards to natural gas engines based on the engine type of the natural gas engine.  Fuel consumption for these vehicles is then calculated according to their tailpipe CO2 emissions.  In essence, this applies a one-to-one relationship between fuel efficiency and tailpipe CO2 emissions for all vehicles, including natural gas vehicles.  The agencies determined that this approach would likely create a small balanced incentive for natural gas use.  In other words, it created a small incentive for the use of natural gas engines that appropriately balanced concerns about the climate impact methane emissions against other factors such as the energy security benefits of using domestic natural gas.  See 76 FR 57123.  We propose to maintain this approach for Phase 2.  Note that EPA is also considering natural gas in a broader context of life cycle emissions, as described in Section XI  
Alternative Refrigerants
In addition to use of leak-tight components in air conditioning system design, manufacturers could also decrease the global warming impact of refrigerant leakage emissions by adopting systems that use alternative, lower global warming potential (GWP) refrigerants, to replace the refrigerant most commonly used today, HFC-134a (R-134a). HFC-134a is a potent greenhouse gas with a GWP 1,430 times greater than that of CO2.  
Under EPA's Significant New Alternatives Policy (SNAP) Program, EPA has found acceptable, subject to use conditions, three alternative refrigerants that have significantly lower GWPs than HFC-134a for use in A/C systems in newly manufactured light-duty vehicles: HFC-152a, CO2  (R-744), and HFO-1234yf.  HFC-152a has a GWP of 124, HFO-1234yf has a GWP of 4, and CO2 (by definition) has a GWP of 1, as compared to HFC-134a which has a GWP of 1,430. CO2 is nonflammable, while HFO-1234yf and HFC-152a are flammable. All three are subject to use conditions requiring labeling and the use of unique fittings, and where appropriate, mitigating flammability and toxicity.  Currently, the SNAP listing for HFO-1234yf is limited to newly manufactured A/C systems in LD vehicles, whereas HFC-152a and CO2 have been found acceptable for all motor vehicle air conditioning applications, including heavy-duty vehicles.  
None of these alternative refrigerants can simply be "dropped" into existing HFC-134a air conditioning systems. In order to account for the unique properties of each refrigerant and address use conditions required under SNAP, changes to the system will be necessary. Typically these changes will need to occur during a vehicle redesign cycle but could also occur during a refresh. For example, because CO2, when used as a refrigerant, is physically and thermodynamically very different from HFC-134a and operates at much higher pressures, a transition to this refrigerant would require significant hardware changes. A transition to A/C systems designed for HFO-1234yf, which is more thermodynamically similar to HFC-134a than is CO2, requires less significant hardware changes that typically include installation of a thermal expansion valve and could potentially require resized condensers and evaporators, as well as changes in other components. In addition, vehicle assembly plants require re-tooling in order to handle new refrigerants safely. Thus a change in A/C refrigerants requires significant engineering, planning, and manufacturing investments. 
EPA is not aware of any significant development of A/C systems designed to use alternative refrigerants in heavy-duty vehicles; however, all three lower GWP alternatives are in use or under various stages of development for use in LD vehicles. Of these three refrigerants, most manufacturers of LD vehicles have identified HFO-1234yf as the most likely refrigerant to be used in that application.  For that reason, EPA would anticipate that HFO-1234yf could be a primary candidate for refrigerant substitution in the HD market in the future if it is listed as an acceptable substitute under SNAP for HD A/C applications.  EPA has begun, but has not yet completed, our evaluation of the use of HFO-1234yf in HD vehicles.  After EPA has conducted a full evaluation based on the SNAP program's comparative risk framework, EPA will list this alternative as either a) acceptable subject to use conditions or b) unacceptable if the risk of use in HD A/C systems is determined to be greater than that of the other currently or potentially available alternatives. EPA is also considering and evaluating additional refrigerant substitutes for use in motor vehicle A/C systems under the SNAP program.  EPA welcomes comments related to industry development of HD A/C systems using lower-GWP refrigerants.
LD vehicle manufacturers are currently making investments in systems designed for lower-GWP refrigerants, both domestically and on a global basis. In support of the LD GHG rule, EPA projected a full transition of LD vehicles to lower-GWP alternatives in the United States by MY 2021. We expect the investment required to transition to ease over time as alternative refrigerants are adopted across all LD vehicles and trucks. This may occur in part due to increased availability of components and the continuing increases in refrigerant production capacity, as well as knowledge gained through experience. As lower-GWP alternatives become widely used in LD vehicles, some manufacturers may wish to also transition their HD vehicles. Transitioning could be advantageous for a variety of reasons including platform standardization and company environmental stewardship policies.  
Although manufacturers of HD vehicles may begin to transition to alternative refrigerants in the future, there is great uncertainty about when significant adoption of alternative refrigerants for HD vehicles might begin, on what timeline adoption might become widespread, and which refrigerants might be involved. Another factor is that the most likely candidate, HFO-1234yf, remains under evaluation and has not yet been listed under SNAP.  For these reasons, EPA has not attempted to project any specific hypothetical scenarios of transition for analytical purposes in this proposed rule.  
Because future introduction of and transition to lower-GWP alternative refrigerants for HD vehicles may occur, EPA is proposing regulatory provisions that would be in place if and when such alternatives become available and manufacturers of HD vehicle choose to use them.  These proposed provisions would also have the effect of easing the burden associated with complying with the lower-leakage requirements when a lower-GWP refrigerant is used instead of HFC-134a.  These provisions would recognize that leakage of refrigerants would be relatively less damaging from a climate perspective if one of the lower-GWP alternatives is used.    Specifically, EPA is proposing to allow a manufacturer to be "deemed to comply" with the leakage standard by using a lower-GWP alternative refrigerant. In order to be "deemed to comply" the vehicle manufacturer would need to use a refrigerant other than HFC-134a that is listed as an acceptable substitute refrigerant for heavy-duty A/C systems under SNAP, and defined under the LD GHG regulations at 40 CFR 86.1867-12(e). The refrigerants currently defined at 40 CFR 86.1867-12(e), besides HFC-134a, are HFC-152a, HFO-1234yf, and CO2. If a manufacturer chooses to use a lower-GWP refrigerant that is listed in the future as acceptable in 40 CFR part 82, subpart G, but that is not identified in 40 CFR 86.1867-12(e), then the manufacturer could contact EPA about how to appropriately determine compliance with the leakage standard.
EPA encourages comment on all aspects of our proposed approach to HD vehicle refrigerant leakage and the potential future use of alternative refrigerants for HD applications.  We specifically request comment on whether there should be additional provisions that could prevent or discourage manufacturers that transition to an alternative refrigerant from discontinuing existing, low-leak A/C system components and instead reverting to higher-leakage components. 
Recently, EPA proposed to change the SNAP listing for the refrigerant HFC-134a from acceptable (subject to use conditions) to unacceptable for use in A/C systems in new LD vehicles.  EPA expects to take final action on this proposed change in listing status for HFC-134a for use in new, light-duty vehicles in 2015.  If the final action changes the status of HFC-134a to unacceptable, it would establish a future compliance date by which HFC-134a could no longer be used in A/C systems in newly manufactured LD vehicles; instead, all A/C systems in new LD vehicles would be required to use HFC-152a, HFO-1234yf, CO2, or any other alternative listed as acceptable for this use in the future.  The current proposed rule does not address the use of HFC-134a in heavy-duty vehicles; however, EPA could consider a change of listing status for HFC-134a use in HD vehicles in the future if EPA determines that other alternatives are currently or potentially available that pose lower overall risk to human health and the environment.
Small Business Issues
The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities.  See generally 5 USC Sections 601-612.  The RFA analysis is discussed in Section XIV.
Pursuant to Section 609(b) of the RFA, as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA), EPA also conducted outreach to small entities and convened a Small Business Advocacy Review Panel to obtain advice and recommendations of representatives of the small entities that potentially would be subject to the rule's requirements. Consistent with the RFA/SBREFA requirements, the Panel evaluated the assembled materials and small-entity comments on issues related to elements of the IRFA. A copy of the Panel Report is included in the docket for this proposed rule.
The agencies determined that the proposed Phase 2 regulations could have a significant economic impact on small entities.  Specifically, the agencies identified four categories of directly regulated small businesses that could be impacted:
         * Trailer Manufacturers
         * Alternative Fuel Converters
         * Vocational Chassis Manufacturers
         * Glider Vehicle Assemblers
To minimize these impacts the agencies are proposing certain regulatory flexibilities  -  both general and category-specific.  In general, we are proposing to delay all new requirements by one year and simplify certification requirements for small businesses.  We are also proposing the following specific relief:
         * Trailers: Proposing simpler requirements for non-box trailers, which are more likely to be manufactured by small businesses; and making third-party testing easier for certification.
         * Alternative Fuel Converters: Omitting recertification of a converted vehicle when the engine is converted and certified; reduced N2O testing; and simplified onboard diagnostics.
         * Vocational Chassis: Less stringent standards for certain vehicle categories.
         * Glider Vehicle Assemblers: Exempt existing small businesses, but cap sales at current levels.
These flexibilities are described in more detail in Section XIV and in the Panel Report.  The agencies look forward to comments and to feedback from the small business community before finalizing the rule and associated flexibilities to protect small businesses. 
Confidentiality of Test Results and GEM Inputs
In accordance with Federal statutes, EPA does not release information from certification applications (or other compliance reports) that we determine to be confidential business information (CBI) under 40 CFR part 2.  Consistent with the CAA, EPA does not consider emission test results to be CBI after introduction into commerce of the certified engine or vehicle.  (However, we have generally treated test results as protected before the introduction into commerce date.)  For Phase 2, we expect to continue this policy and thus would not treat any test results or other GEM inputs as CBI after the introduction into commerce date as identified by the manufacturer.  We request comment on this approach.
We consider this issue to be especially relevant for tire rolling resistance measurements.  Our understanding is that tire manufacturers typically consider such results as proprietary.  However, under EPA's policy, tire rolling resistance measurements are not considered to be CBI and can be released to the public after the introduction into commerce date identified by the manufacturer.  We request comment on whether EPA should release such data on a regular basis to make it easier for operators to find proper replacement tires for their vehicles.
With regard to NHTSA's treatment of confidential business information, manufacturers must submit a request for confidentiality with each electronic submission specifying any part of the information or data in a report that it believes should be withheld from public disclosure as trade secret or other confidential business information.  A form will be available through the NHTSA website to request confidentiality.  NHTSA does not consider manufacturers to continue to have a business case for protecting pre-model report data after the vehicles contained within that report have been introduced into commerce.
Delegated Assembly
       In EPA's existing regulations (40 CFR 1068.261), we allow engine manufacturers to sell or ship engines that are missing certain emission-related components if those components will be installed by the vehicle manufacturer.  EPA has found this provision to work well for engine manufacturers and is proposing a new provision in 40 CFR 1037.621 that would provide a similar allowance for vehicle manufacturers to sell or ship vehicles that are missing certain emission-related components if those components will be installed by a secondary vehicle manufacturer.  As conditions of this allowance manufacturers would be required to:
         * Have a contractual obligation with the secondary manufacturer to complete the assembly properly and provide instructions about how to do so.
         * Keep records to demonstrate compliance.
         * Apply a temporary label to the incomplete vehicles
         * Take other reasonable steps to ensure the assembly is completed properly.
         * Describe in its application for certification how it will use this allowance. 
            
We request comment on this allowance.
    Proposed Amendments to Phase 1 Program
The agencies are proposing revisions to test procedures and compliance provisions used for Phase 1.  These changes are described in Section XII. As a drafting matter, EPA notes that we are proposing to migrate the GHG standards for Class 2b and 3 pickups and vans from 40 CFR 1037.104 to 40 CFR 86.1819.  
NHTSA is also proposing to amend 49 CFR Part 535 to make technical corrections to its Phase 1 program to better align with EPA's compliance approach, standards and CO2 performance results.  In general, these changes are intended to improve the regulatory experience for regulated parties and also reduce agency administrative burden.
NHTSA is proposing to amend 49 CFR Part 535 to make technical corrections to its Phase 1 program to better align with EPA's compliance approach, standards and CO2 performance results.  More specifically, NHTSA proposes to change the rounding of its standards and performance values to have more significant digits.  Increasing the number of significant digits for values used for compliance with NHTSA standards reduces differences in credits generated and overall credit balances for the NHTSA and EPA programs.  NHTSA is also proposing to remove the petitioning process for off-road vehicles, clarify requirements for the documentation needed for submitting innovative technology requests in accordance with 40 CFR 1037.610 and 49 CFR Part 535.7, and add further detail to requirements for submitting credit allocation plans as specified in 49 CFR Part 535.9.  Finally, NHTSA is adding the same record requirements that EPA currently requires to facilitate in-use compliance inspections.  These changes are intended to improve the regulatory experience for regulated parties and also reduce agency administrative burden.
    Other Proposed Amendments to EPA Regulations
EPA is proposing several amendments to regulations not directly related to the HD Phase 1 or Phase 2 programs, as detailed in Section XIII.  For these amendments, there would not be corresponding changes in NHTSA regulations (since there are no such regulations relevant to those programs).  Some of these relate directly to heavy-duty highway engines, but not to the GHG programs.  Others relate to nonroad engines.  This latter category reflects the regulatory structure EPA uses for its mobile source regulations, in which regulatory provisions applying broadly to different types of mobile sources are codified in common regulatory parts such as 40 CFR part 1068.  This approach creates a broad regulatory structure that regulates highway and nonroad engines, vehicles, and equipment collectively in a common program. Thus, it is appropriate to include some proposed amendments to nonroad regulations in addition to the changes proposed only for highway engines and vehicles.
Standards for Engines Used In Glider Kits
EPA regulations currently allow used pre-2013 engines to be installed into new glider kits without meeting currently applicable standards.  As described in Section XIV, EPA is proposing to amend our regulations to allow only engines that have been certified to meet current standards to be installed in new glider kits, with two exceptions.  First, engines certified to earlier MY standards that were identical to the current model year standards may be used.  Second, the small manufacturer allowance described in Section I. F. (1) (c) would also apply for the engines used in the exempted glider kits.
Re-proposal of Nonconformance Penalty Process Changes
Nonconformance penalties are monetary penalties established by regulation that allow a vehicle or engine manufacturer to sell engines that do not meet the emission standards.  Manufacturers unable to comply with the applicable standard pay penalties, which are assessed on a per-engine basis. 
On September 5, 2012, EPA adopted final NCPs for heavy heavy-duty diesel engines that could be used by manufacturers of heavy-duty diesel engines unable to meet the current oxides of nitrogen (NOx) emission standard.  On December 11, 2013 the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion vacating that Final Rule.  It issued its mandate for this decision on April 16, 2014, ending the availability of the NCPs for the current NOx standard, as well as vacating certain amendments to the NCP regulations due to concerns about inadequate notice.  In particular, the amendments revise the text explaining how EPA determines when NCP should be made available.  In this action, EPA is re-proposing most of these amendments to provide fuller notice.  They are discussed in Section XIV.
Updates to Heavy-Duty Engine Manufacturer In-use Testing Requirements 
EPA and manufacturers have gained substantial experience with in-use testing over the last four or five years.  This has led to important insights in ways that the test protocol can be adjusted to be more effective.  We are accordingly proposing to make changes to the regulations in 40 CFR part 86, subparts N and T.
Extension of Certain 40 CFR part 1068 Provisions to Highway Vehicles and Engines
As part of the Phase 1 GHG standards, we applied the exemption and importation provisions from 40 CFR part 1068, subparts C and D, to heavy-duty highway engines and vehicles.  We also specified that the defect reporting provisions of 40 CFR 1068.501 were optional.  In an earlier rulemaking, we applied the selective enforcement auditing under 40 CFR part 1068, subpart E (75 FR 22896, April 30, 2010).  We are proposing in this rule to adopt the rest of 40 CFR part 1068 for heavy-duty highway engines and vehicles, with certain exceptions and special provisions. 
As described above, we are proposing to apply all the general compliance provisions of 40 CFR part 1068 to heavy-duty engines and vehicles.  We propose to also apply the recall provisions and the hearing procedures from 40 CFR part 1068 for highway motorcycles and for all vehicles subject to standards under 40 CFR part 86, subpart S.  We also request comment on applying the rest of the provisions from 40 CFR part 1068 to highway motorcycles and to all vehicles subject to standards under 40 CFR part 86, subpart S.
EPA is proposing to update and consolidate the regulations related to formal and informal hearings in 40 CFR part 1068, subpart G.  This would allow us to rely on a single set of regulations for all the different categories of vehicles, engines, and equipment that are subject to emission standards.  We also made an effort to write these regulations for improved readability.  
We are also proposing to make a number of changes to part 1068 to correct errors, to add clarification, and to make adjustments based on lessons learned from implementing these regulatory provisions.  
Amendments to Engine and Vehicle Test Procedures in 40 CFR parts 1065 and 1066 
EPA is proposing several changes to our engine testing procedures specified in 40 CFR part 1065.  None of these changes would significantly impact the stringency of any standards. 
Amendments Related to Marine Diesel Engines in 40 CFR part 1042
EPA's emission standards and certification requirements for marine diesel engines under the Clean Air Act are identified in 40 CFR part 1042. EPA is proposing to amend these regulations with respect to continuous NOx monitoring and auxiliary engines, as well as making several other minor revisions.
Amendments Related to Locomotives in 40 CFR part 1033
EPA's emission standards and certification requirements for locomotives under the Clean Air Act are identified in 40 CFR part 1033. EPA is proposing to make several minor revisions to these regulations.
    Other Proposed Amendments to NHTSA Regulations
NHTSA is proposing to amend Parts 537 and 512 of title 49 of the CFR in order to allow manufacturers to submit required compliance data for the Corporate Average Fuel Economy program electronically, rather than submitting some reports to NHTSA via paper and CDs and some reports to EPA through its VERIFY database system.  The agencies are coordinating on an information technology project which will allow manufacturers to submit pre-model, mid-model and final model year reports through a single electronic entry point.  The agencies anticipate that this would reduce the reporting burden on manufacturers by up to fifty percent.  The amendments to Part 537 would allow reporting to an electronic database (i.e. EPA's VERIFY system), and the amendments to Part 512 would ensure that manufacturer's confidential business information would be protected through that process. This proposal is discussed further in Section XIII.


Vehicle Simulation, Engine Standards and Test Procedures
Introduction and Summary of Phase 1 and Phase 2 Regulatory Structures
This Section II. A. gives an overview of our vehicle simulation approach in Phase 1 and our proposed approach for Phase 2; our separate engine standards for tractor and vocational chassis in Phase 1 and our proposed separate engine standards in Phase 2; and it describes our engine and vehicle test procedures that are common among the tractor and vocational chassis standards.  Section II. B. discusses in more detail how the Phase 2 proposed regulatory structure would approach vehicle simulation, separate engine standards, and test procedures. Section II. C. discusses the proposed vehicle simulation computer program, GEM, in further detail and Section II. D. discusses the proposed separate engine standards and engine test procedure.  See Sections III through VI for discussions of the proposed test procedures that are unique for tractors, trailers, vocational chassis, and HD pickup trucks and vans.
In Phase 1 the agencies adopted a regulatory structure that included a vehicle simulation procedure for certifying tractors and the chassis of vocational vehicles.  In contrast, the agencies adopted a full vehicle chassis dynamometer test procedure for certifying complete heavy-duty pickups and vans.  The Phase 1 vehicle simulation procedure for tractors and vocational chassis requires regulated entities to use GEM to simulate and certify tractors and vocational vehicle chassis. This program is provided free of charge for unlimited use and may be downloaded by anyone from EPA's Website: http://www.epa.gov/otaq/climate/gem.htm.  This computer program mathematically combines vehicle component test results with other pre-determined vehicle attributes to determine a vehicle's levels of fuel consumption and CO2 emissions for certification purposes.  For Phase 1, the required inputs to this computer program include, for tractors, vehicle aerodynamics information, tire rolling resistance, and whether or not a vehicle is equipped with certain lightweight high-strength steel or aluminum components, a tamper-proof speed limiter, or tamper-proof idle reduction technologies.  The sole input for vocational vehicles, was tire rolling resistance.  For Phase 1 the computer program's inputs did not include engine test results or attributes related to a vehicle's powertrain, namely, its transmission, drive axle(s), or tire revolutions per mile.  Instead, for Phase 1 the agencies specified a generic engine and powertrain within the computer program, and for Phase 1 these cannot be changed by a program user.  
The full vehicle chassis dynamometer test procedure for heavy-duty pickups and vans substantially mirrors EPA's existing light-duty vehicle test procedure.  EPA also set separate engine so-called cap standards for methane (CH4) and nitrous oxide (N2O) (essentially capping current emission levels).  Compliance with the CH4 and N2O standards is measured by an engine dynamometer test procedure, which EPA based on our existing heavy-duty engine emissions test procedure with small adaptations.  EPA also set hydro-fluorocarbon refrigerant leakage design standards for cabin air conditioning systems in tractors pick-up trucks, and vans, which are evaluated by design rather than a test procedure. 
In this action the agencies are proposing a similar regulatory structure for Phase 2, along with a number of revisions that are intended to more accurately evaluate vehicle and engine technologies' impact on real-world fuel efficiency and GHG emissions.  Thus, we are proposing to continue the same certification test regime for heavy duty pickups and vans, and for the CH4 and N2O) standards, as well as tractor and pickup and van air conditioning leakage standards. EPA is also proposing to control vocational vehicle air conditioning leakage and to use that same certification procedure.
We are proposing to continue the vehicle simulation procedure for certifying tractors and vocational chassis, and we are proposing a new regulatory program to regulate some of the trailers hauled by tractors.  The agencies would also apply the vehicle simulation procedure for trailer certification.  We are also proposing some simplified options for trailer certification that would not require the use of the computer program initially.  We are also proposing to continue separate fuel consumption and CO2 standards for the engines installed in tractors and vocational chassis, and we are proposing to continue to require a full vehicle chassis dynamometer test procedure for certifying complete heavy-duty pickups and vans.  As described in Section II. B. (2) (b), the agencies see important advantages to maintaining separate engines standards, such as improved compliance assurance and better control during transient engine operation.
The vehicle simulation procedure necessitates some testing of engines and vehicle components to generate the inputs for the simulation tool; that is, to generate the inputs to the model which is used to certify tractors, vocational chassis, and trailers.  In addition to the testing needed for this purpose for the inputs used in the Phase 1 standards, the agencies are proposing in Phase 2 that manufacturers conduct additional required and optional engine and vehicle component tests, and proposing the additional procedures for conducting these input tests.  These include a new required engine test procedure that provides steady-state engine fuel consumption and CO2 inputs to represent the actual engine in a vehicle.  In addition, we are seeking comment on a newly developed engine test procedure that captures transient engine performance for use in the vehicle simulation computer program.  As described in detail in the draft RIA Chapter 4, we are proposing to require entering attributes that describe the vehicle's transmission type, and its number of gears and gear ratios.  We are proposing an optional powertrain test procedure that would provide inputs to override the agencies' simulated engine and transmission in the vehicle simulation computer program.  We are proposing to require entering attributes that describe the vehicle's drive axle(s) type and axle ratio.  We are also seeking comment on an optional axle efficiency test procedure that would override the agencies' simulated axle in the vehicle simulation computer program.  To improve the measurement of aerodynamic components performance, we are proposing a number of improvements to the aerodynamic coast-down test procedure and data analysis, and we are seeking comment on a newly developed constant speed aerodynamic test procedure.  We are proposing that the aerodynamic test procedures for tractors be applicable to trailers when a regulated entity opts to use the computer program for trailer certification.  Additional details about all these test procedures are found in the draft RIA Chapter 3.
We are further proposing to significantly expand the number of technologies that are recognized in the vehicle simulation computer program.  These include recognizing lightweight thermoplastic materials, automatic tire inflation systems, advanced cruise control systems, workday idle reduction systems, and axle configurations that decrease the number of drive axles.  We are seeking comment on recognizing additional technologies such as high efficiency glass and low global warming potential air conditioning refrigerants as post-process adjustments to the simulation results. 
To better reflect real-world operation, we are also proposing to revise the vehicle simulation computer program's urban (55 mph) and rural (65 mph) highway duty cycles to include changes in road grade.  We are seeking comment on whether or not these duty cycles should also simulate driver behavior in response to varying traffic patterns.  We are proposing a new duty cycle to capture the performance of technologies that reduce the amount of time a vehicle's engine is at idle during a workday when the vehicle is not moving.  And to better recognize that vocational vehicle powertrains are configured for particular applications, we are proposing to further subdivide the vocational chassis category into three different vehicle speed categories.  This is in addition to the Phase 1 subdivision by three weight categories.  The result is nine proposed vocational vehicle subcategories for Phase 2.  The agencies are also proposing to subdivide the highest weight class of tractors into two separate categories to recognize the unique configurations and technology applicability to "heavy-haul" tractors.
Even though we are proposing to include engine test results as inputs into the vehicle simulation computer model, we are also proposing to continue the Phase 1 separate engine standard regulatory structure by proposing separate engine fuel consumption and CO2 standards for engines installed in tractors and vocational chassis.  For these separate engine standards, we are proposing to continue to use the Phase 1 engine dynamometer test procedure, which was adapted substantially from EPA's existing heavy-duty engine emissions test procedure.  However, we are proposing to modify the weighting factors of the tractor engine's 13-point steady-state duty cycle to better reflect real-world engine operation and to reflect the trend toward operating engines at lower engine speeds during tractor cruise speed operation.  Further details on the proposed Phase 2 separate engine standards are provided below in Section II. D.  In today's action EPA is proposing to continue the separate engine cap standards for methane (CH4) and nitrous oxide (N2O) emissions.  
Phase 1 Vehicle Simulation Computer Program (GEM)
For Phase 1 EPA developed a vehicle simulation computer program called, "Greenhouse gas Emissions Model" or "GEM."  GEM was created for Phase 1 for the exclusive purpose of certifying tractors and vocational vehicle chassis.  GEM is similar in concept to a number of other commercially available vehicle simulation computer programs.  See 76 FR 57116, 57146, 57156-157.  However, GEM is also unique in a number of ways.
Similar to other vehicle simulation computer programs, GEM combines various vehicle inputs with known physical laws and justified assumptions to predict vehicle performance for a given period of vehicle operation.  For Phase 1 GEM's vehicle inputs include vehicle aerodynamics information (for tractors), tire rolling resistance, and whether or not a vehicle is equipped with lightweight materials, a tamper-proof speed limiter, or tamper-proof idle reduction technologies.  Other vehicle and engine characteristics were fixed as defaults that cannot be altered by the user.  These defaults included tabulated data of engine fuel rate as a function of engine speed and torque (i.e. "engine fuel maps"), transmissions, axle ratios, and vehicle payloads.  For tractors, Phase 1 GEM models the vehicle pulling a standard trailer.  For vocational vehicles, Phase 1 GEM includes a fixed aerodynamic drag coefficient and vehicle frontal area. 
GEM uses the same physical principles as many other existing vehicle simulation models to derive governing equations which describe driveline components, engine, and vehicle.  These equations are then integrated in time to calculate transient speed and torque.  Some of the justified assumptions in GEM include average energy losses due to friction between moving parts of a vehicle's powertrain; the logical behavior of an average driver shifting from one transmission gear to the next; ad speed limit assumptions such as 55 miles per hour for urban highway driving and 65 miles per hour for rural interstate highway driving.  The sequence of the GEM vehicle simulation can be visualized by imagining a human driver initially sitting in a parked running tractor or vocational vehicle.  The driver then proceeds to drive the vehicle over a prescribed route that includes three distinct patterns of driving: stop-and-go city driving, urban highway driving, and rural interstate highway driving.  The driver then exits the highway and brings the vehicle to a stop.  This concludes the vehicle simulation.  
Over each of the three driving patterns or "duty cycles," GEM simulates the driver's behavior of pressing the accelerator, coasting, or applying the brakes.  GEM also simulates how the engine operates as the gears in the vehicle's transmission are shifted and how the vehicle's weight, aerodynamics, and tires resist the forward motion of the vehicle.  GEM combines the driver behavior over the duty cycles with the various vehicle inputs and other assumptions to determine how much fuel must be consumed to move the vehicle forward at each point during the simulation.  For each of the three duty cycles, GEM totals the amount of fuel consumed and then divides that amount by the product of the miles travelled and tons of payload carried.  The tons of payload carried are specified by the agencies for each vehicle type and weight class.  For each regulatory subcategory of tractor and vocational vehicle (e.g., sleeper cab tractor, day cab tractor, small vocational vehicle, large vocational vehicle, etc.), GEM applies prescribed weighting factors to each of the three duty cycles to represent the fraction of city, urban highway, and rural highway driving that would be typical of each subcategory.  After completing all the cycles, GEM outputs a single composite result for the vehicle, expressed as both fuel consumed in gallon per 1000 ton-miles  (for NHTSA standards) and an equivalent amount of CO2 emitted in grams per ton-mile (for EPA standards).  These are the vehicle's GEM results that are used along with other information to demonstrate the vehicle complies with the applicable standards.  This other information includes the annual sales volume of the vehicle (family) simulated in GEM, plus information on emissions credits that may be generated or used as part of that vehicle family's certification.
While GEM is similar to other vehicle simulation computer programs, GEM is also unique in a number of ways.  First, GEM was designed exclusively for regulated entities to certify tractor and vocational vehicle chassis to the agencies' respective fuel consumption and CO2 emissions standards.  For GEM to be effective for this purpose, the inputs to GEM include only information related to vehicle components and attributes that significantly impact vehicle fuel efficiency and CO2 emissions.  For example, these include vehicle aerodynamics, tire rolling resistance, and whether or not a vehicle is equipped with lightweight materials, a tamper-proof speed limiter, or tamper-proof idle reduction technologies.  On the other hand, other attributes such as those related to a vehicle's suspension, frame strength, or interior features are not included, where these might be included in other commercially available vehicle simulation programs for other purposes.  Furthermore, the simulated driver behavior and the duty cycles cannot be changed in the GEM executable program.  This helps to ensure that all vehicles are simulated and certified in the same way, but this does preclude GEM from being of much use as a research tool for exploring the effects of driver behavior and of different duty cycles.     
To ensure full transparency, GEM is available free of charge for unlimited use, and the GEM source code is open source.  That is, the programming source code of GEM is freely available upon request for anyone to examine, manipulate, and generally use without restriction.  In contrast commercially available vehicle simulation programs are generally not free and open source.  Additional details of GEM are included in Chapter 4 of the RIA.
As part of Phase 1, the agencies conducted a peer review of GEM version 1.0, which was the version released for the Phase 1 proposal.[,]  In response to this peer review and comments from stakeholders, EPA has made changes to GEM.  The current version of GEM is v2.0.1, which is the version applicable for the Phase 1 standards.
Phase 1 Engine Standards and Engine Test Procedure

For Phase 1 the agencies set separate engine fuel consumption and CO2 standards for engines installed in tractors and vocational vehicle chassis.  EPA also set separate engine cap standards for methane (CH4) and nitrous oxide (N2O) emissions.  These Phase 1 engine standards are specified in terms of brake-specific (g/hp-hr) fuel, CO2, CH4 and N2O emissions limits.  For these separate engine standards, the agencies adopted an engine dynamometer test procedure, which was built substantially from EPA's existing heavy-duty engine emissions test procedure.  Since the test procedure already specified how to measure fuel consumption, CO2 and CH4, few changes were needed to employ the test procedure for purposes of the Phase 1 standards.  For Phase 1 the test procedure was modified to specify how to measure N2O.

The duty cycles from EPA's existing heavy-duty emissions test procedure were used in a somewhat unique way for Phase 1.  In EPA's non-GHG engine emissions standards, heavy-duty engines must meet brake-specific standards for emissions of total oxides of nitrogen (NOx), particulate mass (PM), non-methane hydrocarbon (NMHC), and carbon monoxide (CO).  These standards must be met by all engines both over a 13-mode steady-state duty cycle called the "Supplemental Emissions Test" (SET) and over a composite of a cold-start and a hot-start transient duty cycle called the "Federal Test Procedure" (FTP).  In contrast, for Phase 1 the agencies require that engines specifically installed in tractors meet fuel efficiency and CO2 standards over only the SET but not the FTP.  This requirement was intended to reflect that tractor engines typically operate near steady-state conditions versus transient conditions.  See 76 FR 57159/2-3.  The agencies adopted the converse for engines installed in vocational vehicles. That is, these engines must meet fuel efficiency and CO2 standards over only the hot-start FTP but not the SET.  This requirement was intended to reflect that vocational vehicle engines typically operate under transient conditions versus steady-state conditions (76 FR 57178).  For both tractor and vocational vehicle engines in Phase 1, EPA set CH4 and N2O emissions cap standards over the hot-start FTP only and not over the cold-start FTP or SET duty cycles.  See Section II. D. for details on how we propose to modify the engine test procedure for Phase 2.
 
Phase 2 Proposed Regulatory Structure
For Phase 2, the agencies are proposing to modify the regulatory structure used for Phase 1.  Note that we are not proposing to apply the new Phase 2 regulatory structure for compliance with the Phase 1 standards.  The structure used to demonstrate compliance with the Phase 1 standards will remain as finalized in the Phase 1 regulation.  The modifications we are proposing are consistent with the agencies' Phase 1 commitments to consider a range of regulatory approaches during the development of future regulatory efforts (76 FR at 57133), especially for vehicles not already subject to full vehicle chassis dynamometer testing.  For example, we committed to consider a more sophisticated approach to vehicle testing to more completely capture the complex interactions within the total vehicle, including the engine and powertrain performance.  We also intended to consider the potential for full vehicle certification of complete tractors and vocational chassis using a chassis dynamometer test procedure.  We also considered chassis dynamometer testing of complete tractors and vocational chassis as a complementary approach for validating a more complex vehicle simulation approach.  We also committed to consider the potential for a regulatory program for some of the trailers hauled by tractors.  After considering these various approaches, the agencies are proposing a structure in which regulated tractor and vocational chassis manufacturers would additionally enter engine and powertrain-related inputs into GEM, which was not allowed in Phase 1.  For trailer manufacturers, which would be subject to first-time standards under the proposal, we are proposing to require trailer-related inputs into GEM for the purposes of trailer certification.  (Note, however, that we are proposing some interim allowances that would allow certification without the manufacturers using GEM in the early years).  We are proposing both required and optional test procedures to provide these additional GEM inputs.  We are also proposing to significantly expand the number of technologies recognized in GEM. Further, we are proposing to modify the GEM duty cycles and to further subdivide the vocational vehicle subcategory to better represent real-world vehicle operation.  In contrast to these changes, we are proposing to maintain essentially the same chassis dynamometer test procedure for certifying complete heavy-duty pickups and vans.
Other Structures Considered
To follow-up on the commitment to consider other approaches, the agencies spent significant time and resources in evaluating six different options for demonstrating compliance with the proposed Phase 2 standards.  These six options include full vehicle chassis dynamometer testing, full vehicle simulation, and vehicle simulation in combination with powertrain testing, engine testing, engine electronic controller and/or transmission electronic controller testing.  The agencies evaluated these options in terms of the capital investment required of regulated manufacturers to conduct the testing and/or simulation, the cost per test, the accuracy of the simulation, and the challenges of validating the results.  Other considerations included the representativeness to the real world behavior, maintaining existing Phase 1 certification approaches that are known to work well, enhancing the Phase 1 approaches that could use improvements, the alignment of test procedures for determining GHG and non-GHG emissions compliance, and the potential to circumvent the intent of the test procedures.
Chassis dynamometer testing is used extensively in the development and certification of light-duty vehicles.  It also is used in Phase 1 for complete Class 2b/3 pickups and vans, as well as for certain incomplete vehicles (at the manufacturer's option).  The agencies considered chassis dynamometer testing more broadly as a heavy-duty fuel efficiency and GHG certification option because chassis dynamometer testing has the ability to evaluate a vehicle's performance in a manner that most closely resembles the vehicle's in-use performance.  Nearly all of the fuel efficiency technologies can be evaluated on a chassis dynamometer, including the vehicle systems' interactions that depend on the behavior of the engine, transmission, and other vehicle electronic controllers.  One challenge associated with application of wide-spread heavy-duty chassis testing is the small number of heavy-duty chassis test sites that are available in North America.  As discussed in draft RIA Chapter 3, the agencies were only able to locate 11 heavy-duty chassis test sites.  However, we have seen an increased interest in building new sites since issuing the Phase 1 Final Rule.  For example, EPA is currently building a heavy-duty chassis dynamometer with the ability to test up to 80,000 pound vehicles at the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan.

Nevertheless, the agencies continue to be concerned about proposing a chassis test procedure for certifying tractors or vocational chassis due to the initial cost of a new test facility and the large number of heavy duty tractor and vocational chassis variants that could require testing.  We have also concluded that for heavy-duty tractors and vocational chassis, there can be increased test-to-test variability under chassis dynamometer test conditions.  First, the agencies recognize that such testing requires expensive, specialized equipment that is not widely available.  The agencies estimate that it would vary from about $1.3 to $4.0 million per new test site depending on existing facilities.  In addition, the large number of heavy-duty vehicle configurations would require significant amounts of testing to cover the sector.  For example, for Phase 1 tractor manufacturers typically certified several thousand variants of one single tractor model.  Finally, EPA's evaluation of heavy-duty chassis dynamometer testing has shown that the variation of chassis test results is greater than light-duty testing, up to 3 percent worse, based on our sponsored testing at Southwest Research Institute.  Although the agencies are not proposing chassis dynamometer certification of tractors and vocational chassis, we believe such an approach could be appropriate in the future for some heavy duty vehicles if more test facilities become available and if the agencies are able to address the large number of vehicle variants that might require testing.  We request comment on whether or not a chassis dynamometer test procedure should be required in lieu of the vehicle simulation approach we are proposing.  Note, as discussed in Section II. C. (4) II. C. (3) (b)that we are also proposing a modest complete tractor heavy-duty chassis dynamometer test program only for monitoring complete tractor fuel efficiency trends over the implementation timeframe of the Phase 1 and proposed Phase 2 standards.

Another option considered for certification involves testing a vehicle's powertrain in a modified engine dynamometer test facility.  In this case the engine and transmission are installed in a laboratory test facility and a dynamometer is connected to the output shaft of the transmission.  GEM or an equivalent vehicle simulation computer program is then used to control the dynamometer to simulate vehicle speeds and loads.  The step-by-step test procedure considered for this option was initially developed as an option for hybrid powertrain testing for Phase 1.  A key advantage of the powertrain test approach is that it directly measures the effectiveness of the engine, the transmission, and the integration of the two.  Engines and transmissions are particularly challenging to simulate within a computer program like GEM because engines and transmissions installed in vehicles today are actively and interactively controlled by their own sophisticated electronic controls.  These controls already contain essentially their own vehicle simulation programs that GEM would then have to otherwise simulate.

We believe that the capital investment impact for powertrain testing on manufacturers could be manageable for those that already have heavy-duty engine dynamometer test cells.  We have found that in general medium-duty powertrains can be tested in heavy-duty engine test cells.  EPA has successfully completed such a test facility conversion at the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, Michigan. Southwest Research Institute (SwRI) in San Antonio, Texas has completed a similar test cell conversion.  Oak Ridge National Laboratory in Oak Ridge, Tennessee recently completed construction of a new and specialized heavy heavy-duty powertrain dynamometer facility.  EPA also contracted SwRI to evaluate North America's current capabilities for powertrain testing in the heavy-duty sector and the cost of installing a new powertrain cell that would meet agency requirements.  Results indicated that one supplier currently has this capability.  We estimate that the upgrade costs to an existing engine test facility are on the order of $1.2 million, and a new test facility in an existing building are on the order of $1.9 million. We also estimate that current powertrain test cells that could be upgraded to measure CO2 emissions would cost approximately $600,000. For manufacturers or suppliers wishing to contract out such testing, SwRI estimated that a cost of $150,000 would provide about one month of powertrain testing services.  Once a powertrain test cell is fully operational, we estimate that for a nominal powertrain family (i.e. one engine family tested with one transmission family), the cost for powertrain installation, testing, and data analysis would be $68,972.

Since the Phase 1 Final Rule, the agencies and other stakeholders have completed significant new work toward refining the powertrain test procedure itself.  The proposed regulations provide details of the refined powertrain test procedure. See 40 CFR 1037.550.

Furthermore, the agencies have worked with key transmission suppliers to develop an approach to define transmission families.  Coupled with the agencies existing definitions of engine families (40 CFR 1036.230), we are proposing an approach to define a powertrain family in 40 CFR 1037.231.  We request comment on what key attributes should be considered when defining a transmission family.

We believe that a combination of a robust powertrain family definition, a refined powertrain test procedure and a refined GEM could become an optimal certification path that leverages the accuracy of powertrain testing along with the versatility of GEM, which alleviates the need to test a large number of vehicle or powertrain variants.  To balance the potential advantages of this approach with the fact that it has never been used for vehicle certification in the past, we are proposing to allow this approach as an optional certification path, as described in Section II. C. (3) (b).  To be clear, we are not proposing to require powertrain testing at this time, but because this testing would recognize additional technologies that are not recognized directly in GEM (even as proposed to be amended), we are factoring its use into our stringency considerations for vocational chassis.  We request comment on whether the agencies should consider requiring powertrain testing more broadly.

Another regulatory structure option considered was engine-only testing over the GEM duty cycles over a range of simulated vehicle configurations.  This approach would use GEM to generate engine duty cycles by simulating a range of transmissions and other vehicle variations. These engine duty cycles then would be programmed into a separate controller of a dynamometer connected to an engine's output shaft.  Unlike the chassis dynamometer or powertrain dynamometer approaches, which could have significant test facility construction or modification costs, this approach has little capital investment impact on manufacturers because the majority already have engine test facilities to both develop engines and to certify engines to meet both the non-GHG standards and the Phase 1 fuel efficiency and GHG standards.  The agencies also have been investigating this approach as an alternative way to generate data that could be used to represent an engine in GEM.  Because this approach captures engine performance under transient conditions, this approach could be an improvement over our proposed Phase 2 approach of representing an engine in GEM with only steady-state operating data.  Details of this alternative are described in draft RIA Appendix A.  Because this approach is new and has never been used for vehicle development or certification, we are not proposing requiring its use as part of the Phase 2 certification process.  However, we encourage others to investigate this new approach in detail, and we request comment on whether or not the agencies should replace our proposed steady-state operation representation of the engine in GEM with this alternative approach.

Additional certification options considered included simulating the engine, transmission, and vehicle using a computer program while having the actual transmission electronic controller connected to the computer running the vehicle simulation program.  The output of the simulation would be an engine cycle that would be used to test the engine in an engine test facility.  Just as in the engine-only test procedure, this procedure would not require significant capital investment in new test facilities.  An additional benefit of this approach would be that the actual transmission controller would be determining the transmission gear shift points during the test, without a transmission manufacturer having to reveal their proprietary transmission control logic.  This approach comes with some technical challenges, however.  The model would have to become more complex and tailored to each transmission and controller to make sure that the controller would operate properly when it is connected to a computer instead of a transmission.  Some examples of the transmission specific requirements would be simulating all the Controller Area Network (CAN) communication to and from the transmission controller and the specific sensor responses both through simulation and hardware.  The vehicle manufacturer would have to be responsible for connecting the transmission controller to the computer, which would require a detailed verification process to ensure it is operating properly.  Determining full compliance with this test procedure would be a significant challenge for the regulatory agencies because the agencies would have to be able to replicate each of the manufacturer's unique interfaces between the transmission controller and computer running GEM. 

Finally, the agencies considered full vehicle simulation plus separate engine standards, which is the proposed approach for Phase 2.  These are discussed in more detail in the following sections.  

Proposed Regulatory Structure
Under the proposed structure, tractor and vocational chassis manufacturers would be required to provide engine, transmission, drive axle(s) and tire radius inputs into GEM.  For Phase 1, GEM used default values for all of these, which limited the types of technologies that could be recognized by GEM to show compliance with the standards.   We are proposing to significantly expand GEM to account for a wider range of technological improvements that would otherwise need to be recognized through some off-cycle crediting approach.  These include improvements to the driver controller (i.e., the simulation of the driver), engines, transmissions, and axles.  Additional technologies that would now be recognized in GEM also include lightweight thermoplastic materials, automatic tire inflation systems, advanced cruise control systems, engine stop-start idle reduction systems, and axle configurations that decrease the number of drive axles.  The agencies are also proposing to maintain separate engine standards.  As described below, we see advantages to having both engine-based and vehicle-based standards.  Moreover, the advantages described here for full vehicle simulation do not necessarily correspond to disadvantages for engine testing or vice versa.  
    Advantages of Full Vehicle Simulation
The agencies' primary purpose in developing fuel efficiency and GHG emissions standards is to increase the use of vehicle technologies that improve fuel efficiency and decrease GHG emissions.  Under the Phase 1 tractor and vocational chassis standards, there is no regulatory incentive for manufacturers to adopt new engine, transmission or axle technologies because GEM was not configured to recognize these technologies uniquely.  By recognizing such technologies in GEM under Phase 2, the agencies would be creating a regulatory incentive to improve engine, transmission, and axle technologies to improve fuel efficiency and decrease GHG emissions.  In its 2014 report, NAS also recognized the benefits of full vehicle simulation and recommended that Phase 2 incorporate such an approach. 
We anticipate that the proposed Phase 2 approach would create three new specific regulatory incentives.  First, vehicle manufacturers would have an incentive to use the most efficient engines.  Since GEM would no longer use the agency default engine in simulation manufacturers would have their own more efficient engines recognized in GEM.  Under Phase 1, engine manufacturers have a regulatory incentive to design efficient engines, but vehicle manufacturers do not have a similar regulatory incentive to use efficient engines in their vehicles.  Second, the proposed approach would create incentives for both engine and vehicle manufacturers to design engines and vehicles to work together to ensure that engines actually operate as much as possible near their most efficient points.  This is because Phase 2 GEM would allow the vehicle manufactures to use specific transmission, axle, and tire characteristics as inputs, thus having the ability to directly recognize many powertrain integration benefits, such as down speeding, and different transmission architectures and technologies, such as automated manual transmissions, automatic transmissions,, and different numbers of transmission gears, transmission gear ratios, axle ratios and tire revolutions per mile.  No matter how well designed, all engines have speed and load operation points with differing fuel efficiency and GHG emissions.  The speed and load point with the best fuel efficiency (i.e., peak thermal efficiency) is commonly known as the engine's "sweet spot".  The more frequently an engine operates near its sweet spot, the better the vehicle's fuel efficiency will be.  In Phase 1, a vehicle manufacturer receives no regulatory credit for designing its vehicle to operate closer to the sweet spot because Phase 1 GEM does not model the actual engine, transmission, axle, or tire revolutions per mile.  Third, the proposed approach would recognize improvements to the overall efficiency of the drivetrain including the axle.  The proposed version of GEM would recognize the benefits of different axle technologies including axle lubricants, and reducing axle losses such as by enabling three-axle vehicles to deliver power to only one rear axle through the proposed post-simulation adjustment approach (see Chapter 4.5 of the Draft RIA).  
In addition to providing regulatory incentives to use more fuel efficient technologies, expanding GEM to recognize engine and other powertrain component improvements would also provide important flexibility to vehicle manufacturers.  The flexibility to effectively trade engine and other component improvements against other vehicle improvements would allow vehicle manufacturers to better optimize their vehicles to achieve the lowest cost for specific customers.  Vehicle manufacturers could use this flexibility to reduce overall compliance costs and/or address special applications where certain vehicle technologies are not practical.  The agencies considered in Phase 1 allowing the exchange of emission certification credits generated relative to the separate brake-specific (g/hp-hr) engine standards and credits generated relative to the vehicle standards (g/ton-mile).  However, we did not allow this in Phase 1 due in part to concerns about the equivalency of credits generated relative to different standards, with different units of measure and different test procedures.  The proposed approach for Phase 2 would eliminate these concerns because engine and other vehicle component improvements would be evaluated relative to the same vehicle standard in GEM.  This also means that under the proposed Phase 2 approach there is no need to consider allowing emissions credit trading between engine-generated and vehicle-generated credits because vehicle manufacturers are directly credited by the combination of engine and vehicle technologies they choose to install in each vehicle.  Therefore, this approach eliminates one of the concerns about continuing separate engine standards, which was that a separate engine standard and a full vehicle standard were somehow mutually exclusive.  That is not the case.  In fact, in the next section we describe how we propose to continue the separate engine standard along with recognizing engine performance at the vehicle level.  The agencies acknowledge that maintaining a separate engine standard would limit flexibility in cases where a vehicle manufacturer wanted to use less efficient engines and make up for them using more efficient vehicle technologies.  However, as described below, we see important advantages to maintaining a separate engine standard, and we believe they more than justify the reduced flexibility.
There could be disadvantages to the proposed approach, however.  As is discussed in Section II. B. (2) (b), some of the disadvantages can be addressed by maintaining separate engine standards, which we are proposing to do. We request comment on other disadvantages such as those discussed below.  
One disadvantage of the proposed approach is that it would increase complexity for the vehicle standards.  For example, vehicle manufacturers would be required to conduct additional engine tests and track additional GEM inputs for compliance purposes.  However, we believe that most of the burden associated with this increased complexity would be an infrequent burden of engine testing and updating information systems to track these inputs.
Because GEM measures performance over specific duty cycles intended to represent average operation of vehicles in-use, the proposed approach might also create an incentive to optimize powertrains and drivetrains for the best GEM performance rather than the best in-use performance for a particular application.  This is always a concern when selecting duty cycles for certification.  There will always be instances, however infrequent, where specific vehicle applications will operate differently than the duty cycles used for certification.  The question is would these differences force manufacturers to optimize vehicles to the certification duty cycles in a way that decreases fuel efficiency and increases GHG emissions in-use?  We believe that the certification duty cycles would not prevent manufacturers from properly optimizing vehicles for customer fuel efficiency.  First, the impact of the certification duty cycles would be relatively small because they affect only a small fraction of all vehicle technologies.  Second, the emission averaging and fleet average provisions mean that the proposed regulations would not require all vehicles to meet the standards.  Vehicles exceeding a standard over the duty cycles because they are optimized for different in-use operation can be offset by other vehicles that perform better over the certification duty cycles.  Third, vehicle manufacturers would also have the ability to lower such a vehicle's measured GHG emissions by adding technology that would improve fuel efficiency both over the certification duty cycles and in-use.  The proposed standards are not intended to be at a stringency where manufacturers would be expected to apply all technologies to all vehicles.  Thus, there should be technologies available to add to vehicle configurations that initially fail to meet the Phase 2 proposed standards.  Fourth, we are proposing further sub-categorization of the vocational vehicle segment, tripling the number of sub-categories within this segment from 3 to 9.  These 9 sub-categories would divide each of the 3 Phase 1 weight categories into 3 additional vehicle speed categories.  Each of the 3 speed categories would have unique duty cycle weighting factors to recognize that different vocational chassis are configured for different vehicle speed applications.  Furthermore, we are proposing 9 unique standards for each of the subcategories.  This further subdivision better recognizes technologies' performance under the conditions for which the vocational chassis was configured to operate.  This further decreases the potential of the certification duty cycles to encourage manufacturers to configure vocational chassis differently than the optimum configuration for specific customers' applications.  Finally, as required by Section 202 (a) (1) and 202 (d) of the CAA, EPA is proposing specific GHG standards which would have to be met in-use.
One disadvantage of our proposed full vehicle simulation approach is the potential requirement for engine manufacturers to disclose otherwise proprietary information to vehicle manufacturers who install their engines.  Under the proposed approach, vehicle manufacturers would need to know details about engine performance long before production, both for compliance planning purposes, as well as for the actual submission of applications for certification.  Moreover, vehicle manufacturers would need to know details about the engine's performance that are generally not publicly available  -  specifically the detailed fuel consumption of an engine over many steady-state operating points.  We request comment on whether or not such information could be used to "reverse engineer" intellectual property related to the proprietary design of engines, and what steps the agencies could take to address this.
The agencies also generally request comment on the advantages and disadvantages of the proposed structure that would require vehicle manufacturers to provide additional inputs into GEM to represent the engine, transmission, drive axle(s), and loaded tire radius.
    Advantages of Separate Engine Standards
For engines installed in tractors and vocational vehicle chassis, we are proposing to maintain separate engine standards for fuel consumption and GHG emissions in Phase 2 for both SI and CI engines.  Moreover, we are proposing new more stringent engine standards for CI engines.  While the vehicle standards alone are intended to provide sufficient incentive for improvements in engine efficiency, we continue to see important advantages to maintaining separate engine standards for both SI and CI engines.  The agencies believe the advantages described below are critical to fully achieve the goals of the NHTSA and EPA standards.   
First, EPA has a robust compliance program based on engine testing.  For the Phase 1 standards, we applied the existing criteria pollutant compliance program to ensure that engine efficiency in actual use reflected the improvements manufacturers claimed during certification.  With engine-based standards, it is straightforward to hold engine manufacturers accountable by testing in-use engines.  If the engines exceed the standards, they can be required to correct the problem or perform other remedial actions.  Without separate engine standards in Phase 2, addressing in-use compliance becomes more subjective.  Having clearly defined compliance responsibilities is important to both the agencies and to the market.
Second, engine standards for CO2 and fuel efficiency force engine manufacturers to optimize engines for both fuel efficiency and control of non-CO2 emissions at the same engine operating points.  This is of special concern for NOx emissions, given the strong counter-dependency between engine-out NOx emissions and fuel consumption.  By requiring engine manufacturers to comply with both NOx and CO2 standards using the same test procedures, the agencies ensure that manufacturers include technologies that can be optimized for both rather than alternate calibrations that would trade NOx emissions against fuel consumption depending how the engine or vehicle is tested.  In the past, when there was no CO2 engine standard and no steady-state NOx standard, some manufacturers chose this dual calibration approach instead of investing in technology that would allow them to simultaneously reduce both CO2 and NOx.     
Third, engine fuel consumption can vary significantly between transient operation and steady-state operation, and we are proposing only steady-state engine operating data as the required engine input into GEM for both tractor and vocational chassis certification.  Because vocational vehicles can spend significant operation under transient engine operation, the separate engine standard for engines installed in vocational vehicles is a transient test.  Therefore, the separate engine standard for vocational engines provides the only measure of engine fuel consumption and CO2 emissions under transient conditions.  Without a transient engine test we would not be able to ensure control of fuel consumption and CO2 emissions under transient engine conditions.
It is worth noting that these first three advantages are also beneficial for the marketplace.  In these respects, the separate engine standards allow each manufacturer to be confident that its competitors are playing by the same rules.  The agencies believe that the absence of a separate engine standard would leave open the possibility that a manufacturer might choose to cut corners with respect to in-use compliance margins, the NOx-CO2 tradeoff, or transient controls.  Concerns that competitors might take advantage of this can put a manufacturer in a difficult situation.  On the other hand knowing that the agencies are ensuring all manufacturers are complying fully can eliminate these concerns.
Finally, the existence of meaningful separate engine standards allows the agencies to exempt certain vehicles from some or all of the vehicle standards and requirements without forgoing the engine improvements.  A good example of this is the off-road vehicle exemption in 40 CFR 1037.631 and 49 CFR 535.3(g), which exempts vehicles "intended to be used extensively in off-road environments" from the vehicle requirements.  The engines used in such vehicles must still meet the engine standards of 40 CFR part 1036 and 49 CFR 535.5(d).  The agencies see no reason why efficient engines cannot be used in such vehicles.  However, without separate engine standards, there would be no way to require them to be efficient.
In the past there has been some confusion about the Phase 1 separate engine standards somehow preventing the recognition of engine-vehicle optimization that vehicle manufacturers perform to minimize a vehicle's overall fuel consumption.  It was not the existence of separate engine standards that prevented recognition of this optimization. Rather it was that the agencies did not allow manufacturers to enter inputs into GEM that characterized unique engine performance.  For Phase 2 we are proposing to require that manufacturers input such data because we intend for GEM to recognize this engine-vehicle optimization.  The continuation of separate engine standards in Phase 2 does not undermine in any way the recognition of this optimization in GEM.
The agencies request comment on the advantages and disadvantages of the proposal to maintain separate engine standards and to increase the stringency of the CI engine standards.  We would also welcome suggested alternative approaches that would achieve the same goals.  It is important to emphasize that the agencies see the advantages of separate engine standards as fundamental to the success of the program and do not expect to adopt alternative approaches that fall short of these goals.  
Note that commenters opposing separate engine standards should also be careful distinguish between concerns related to the stringency of the proposed engine standards, from concerns inherent to any separate engine standards whatsoever.  When meeting with manufacturers prior to this proposal, the agencies heard many concerns about the potential problems with separate engines standards that were actually concerns about separate engine standards that are too stringent.  However, we see these as two different issues.  The agencies do recognize that setting engine standards at a high stringency could increase the cost to comply with the vehicle standard, if lower-cost vehicle technologies are available.  Additionally, the agencies recognize that setting engine standards at a high stringency may promote the use of large-displacement engines, which have inherent heat transfer and efficiency advantages over smaller displacement engines over the engine test cycles, though a smaller engine may be more efficient for a given vehicle application.  Thus we encourage commenters supporting the separate engine standards to address the possibility of unintended consequences such as these.
Proposed Vehicle Simulation Model  -  Phase II GEM 
For tractors and vocational vehicle chassis, the agencies propose that manufacturers would be required to meet vehicle-based standards, and certification to these standards would be facilitated by the required use of the vehicle simulation computer program called, "Greenhouse gas Emissions Model" or "GEM."  GEM was created for Phase 1 for the exclusive purpose of certifying tractors and vocational chassis.  The agencies are proposing to modify GEM and to require vehicle manufacturers to provide additional inputs into GEM to represent the engine, transmission, drive axle(s), and loaded tire radius.  For Phase 1, GEM used agency default values for all of these parameters.  Under the proposed approach for Phase 2, vehicle manufacturers would be able to use these technologies, plus additional technologies to demonstrate compliance with the applicable standards.  The additional technologies include lightweight thermoplastic materials, automatic tire inflation systems, advanced cruise control systems, engine stop-start idle reduction systems, and axle configurations that decrease the number of drive axles to comply with the standards.
Description of the Proposed Modifications to GEM
As explained above, GEM is a computer program that was originally developed by EPA specifically for manufacturers to use to certify to the Phase 1 tractor and vocational chassis standards.  GEM mathematically combines the results of vehicle component test procedures with other vehicle attributes to determine a vehicle's certified levels of fuel consumption and CO2 emissions.  For Phase 1 the required inputs to GEM include vehicle aerodynamics information, tire rolling resistance, and whether or not a vehicle is equipped with certain lightweight high-strength steel or aluminum components, a tamper-proof speed limiter, or tamper-proof idle reduction technologies for tractors.  The vocational vehicle inputs to GEM for Phase 1 only included tire rolling resistance.  For Phase 1 the GEM's inputs did not include engine test results or attributes related to a vehicle's powertrain; namely, its transmission, drive axle(s), or loaded tire radius.  Instead, for Phase 1 the agencies specified a generic engine and powertrain within GEM, and for Phase 1 these cannot be changed in GEM.
For this proposal GEM has been modified and validated against a set of experimental data that represents over 130 unique vehicle variants.  EPA believes this new version of GEM is an accurate and cost-effective alternative to measuring fuel consumption and CO2 over a chassis dynamometer test procedure.  Some of the key proposed modifications would necessitate required and optional vehicle component test procedures to generate additional GEM inputs.  The results of which would provide additional inputs into GEM.  These include a new required engine test procedure to provide steady-state engine fuel consumption and CO2 inputs into GEM.  We are also seeking comment on a newly developed engine test procedure that also captures transient engine performance for use in GEM.  We are proposing to require inputs that describe the vehicle's transmission type, and its number of gears and gear ratios.  We are proposing an optional powertrain test procedure that would provide inputs to override the agencies' simulated engine and transmission in GEM.  We are proposing to require inputs that describe the vehicle's drive axle(s) type (e.g., 6x4 or 6x2) and axle ratio.  We are also seeking comment on an optional axle efficiency test procedure to override the agencies' simulated axle in GEM.  We are proposing to significantly expand the number of technologies that are recognized in GEM.  These include recognizing lightweight thermoplastic materials, automatic tire inflation systems, advanced cruise control systems, engine stop-start idle reduction systems, and axle configurations that decrease the number of drive axles.  We are seeking comment on recognizing (outside of the GEM simulation) additional technologies such as high efficiency glass and low global warming potential air conditioning refrigerants. To better reflect real-world operation, we are also proposing to revise the vehicle simulation computer program's urban and rural highway duty cycles to include changes in road grade.  We are seeking comment on whether or not these duty cycles should also simulate driver behavior in response to varying traffic patterns.  We are proposing a new duty cycle to capture the performance of technologies that reduce the amount of time a vehicle's engine is at idle during a workday when the vehicle is not moving.  And to better recognize that vocational vehicle powertrains are configured for particular applications, we are proposing to further subdivide the vocational chassis category into three different vehicle speed categories, where GEM weights the individual duty cycles' results of each of the speed categories differently  Section 4.2 of the RIA details all these modifications.  This section briefly describes some of the key proposed modifications to GEM.
    Simulating Engines for Vehicle Certification
Before describing the proposed approach for Phase 2, this section first reviews how engines are simulated for vehicle certification in Phase 1.  GEM for Phase 1 simulates the same generic engine for any vehicle in a given regulatory sub-category with a data table of steady-state engine fuel consumption mass rates (g/s) versus a series of steady-state engine output shaft speeds (revolutions per minute, rpm) and loads (torque, N-m).  This data table is also sometimes called a "fuel map" or an "engine map", although the term "engine map" can mean other kinds of data in different contexts.  The engine speeds in this map range from idle to maximum governed speed and the loads range from engine motoring (negative load) to the maximum load of an engine.  When GEM runs over a vehicle duty cycle, this data table is linearly interpolated to find a corresponding fuel consumption mass rate at each engine speed and load that is demanded by the simulated vehicle operating over the duty cycle.  The fuel consumption mass rate of the engine is then integrated over each duty cycle in GEM to arrive at the total mass of fuel consumed for the specific vehicle and duty cycle. Under Phase 1, manufacturers were not allowed to input their own engine fuel maps to represent their specific engines in the vehicle being simulated in GEM.  Because GEM was programmed with fixed engine fuel maps for Phase 1 that all manufacturers had to use, interpolation of the tables themselves over each of the three different GEM duty cycles did not have to closely represent how an actual engine might operate over these three different duty cycles.
In contrast, for Phase 2 we are proposing a new and required steady-state engine dynamometer test procedure for manufacturers to use to generate their own engine fuel maps to represent each of their engine families in GEM.  The proposed Phase 2 approach is consistent with the 2014 NAS Phase 2 First Report recommendation.  To validate this approach we compared the results from 28 individual engine dynamometer tests.  Three different engines were used to generate this data, and these engines were produced by two different engine manufacturers.  One engine was tested at three different power ratings (13 liters at 410, 450 & 475 hp) and one engine was tested at two ratings  (6.7 liters  at 240 and 300 hp), and other engine with one rating (15 liters 455 hp) service classes.  For each engine and rating our proposed steady-state engine dynamometer test procedure was conducted to generate an engine fuel map to represent that particular engine in GEM.  Next, with GEM we simulated various vehicles in which the engine could be installed.  For each of the GEM duty cycles we are proposing, namely the urban local (ARB Transient), urban highway with road grade (55 mph), and rural highway with road grade (65 mph) duty cycles, we determined the GEM result for each vehicle configuration, and we saved the engine output shaft speed and torque information that GEM created to interpolate the steady-state engine map for each vehicle configuration  We then had this same engine output shaft speed and torque information programmed into an engine dynamometer controller, and we had each engine perform the same duty cycles that GEM demanded of the simulated version of the engine.  We then compared the GEM results based on GEM's linear interpolation of the engine maps to the measured engine dynamometer results.  We concluded that for the 55 mph and 65 mph duty cycles, GEM's interpolation of the steady-state data tables was sufficiently accurate versus the measured results.  This is an outcome one would reasonably expect because even with changes in road grade, the 55 mph and 65 mph duty cycles do not demand rapid changes in engine speed or load.  The 55 mph and 65 mph duty cycles are nearly steady-state, as far as engine operation is concerned, just like the engine maps themselves.  However, for the ARB Transient cycle, we observed a consistent bias, where GEM consistently under-predicted fuel consumption and CO2 emissions.  This low bias over the 28 engine tests ranged from 4.2 percent low to 7.8 percent low.  The mean was 5.9 percent low and the 90[th] percentile value was 7.1 percent low.  These observations are consistent with the fact that engines generally operate less efficiently under transient conditions than under steady-state conditions.  
A number of reasons explain this consistent trend.  For example, under rapidly changing engine conditions, it is generally more challenging to program an engine electronic controller to respond with optimum fuel injection rate and timing, exhaust gas recirculation valve position, variable nozzle turbo-charger vane position and other set points than it is to do so under steady-state conditions.  Transient heat and mass transfer within the intake, exhaust, and combustion chambers also tend to increase turbulence and enhance energy loss to engine coolant during transient operation.  Furthermore, because exhaust emissions control is more challenging under transient engine operation, engineering tradeoffs sometimes need to be made between fuel efficiency and transient emissions control.  Special calibrations are typically also required to control smoke and manage exhaust temperatures during transient operation for a transient cycle.  We are confident that this low bias in GEM would continue to exist well into the future if we were to test additional engines.  However, with the range of the results that we have generated so far we are somewhat less confident in proposing a single numerical value to correct for this effect over the ARB Transient duty cycle.  Based on the data we have collected so far, we are conservatively proposing to apply a 5.0 percent correction factor to GEM's ARB Transient results.  Note that adjustment would be applied internal to GEM, and no manufacturer input or action would be needed.  This means that for GEM fuel consumption and CO2 emissions results that were generated using the steady-state engine map representation of an engine in GEM, a 1.05 multiplier would be applied to only the ARB Transient result.  If a manufacturer chooses to perform the optional powertrain test procedure we are proposing, then this 1.05 multiplier to the ARB Transient would not apply (since we know of no bias in that optional powertrain test).  For the same reason, if we were to replace the proposed steady-state engine map in GEM with the alternative approach detailed in draft RIA Appendix A, then this 1.05 multiplier would not apply.  We request comment on whether or not this single value multiplier is an appropriate way to correct between steady-state and transient engine fuel consumption and CO2 emissions, specifically over the ARB Transient duty cycle.  We also request comment on the magnitude of the multiplier itself.  For example, for the proposal we have chosen a 1.05 multiplier correction value because it is conservative but still near the mean bias we observed.  However, for the tests we have conducted on current technology engines, a 1.05 multiplier would mean that about one half of these engines would be penalized by powertrain testing (or if we utilized the alternative engine approach in Appendix A) because the actual measured transient impact would be slightly higher than 5 percent.  While these tests were performed on current technology powertrains rather than the kind of optimized powertrains we project for Phase 2, these results raise still some concerns for us.  Because we intend to incentivize powertrain testing and not penalize it, and because we also encourage constructive comments on the alternative approach in Appendix A, we also request comment on increasing the magnitude of this ARB Transient multiplier toward the higher end of the biases we observed.  For example, we request comment on increasing the proposed multiplier from 1.05 to 1.07, which is close to the 90[th] percentile of the results we have collected so far.  Using this higher multiplier would imply that only about 10 percent of engines powertrain tested or tested under the alternative approach in Appendix A would show worse fuel consumption over the ARB Transient than its respective representation in a steady-state data table in GEM.  This would mean that the remaining 90 percent of engines powertrain tested would receive additional credit in GEM.  Using 1.07 would essentially guarantee that any powertrain that was significantly more efficient than current powertrains would receive meaningful credit for the improvement.  However, this value would also provide credits for many current powertrain designs.
We also request comment as to whether or not there might be certain vehicle sub-categories or certain small volume vocational chassis, where using the Phase 1 approach of using a generic engine table might be more appropriate.  We also request comment as to whether or not the agencies should provide default generic engine maps in GEM for Phase 2 and allow manufacturers to optionally override these generic maps with their own maps, which would be generated according to our proposed engine dynamometer steady-state test procedure. 
    Simulating Human Driver Behavior and Transmissions for Vehicle Certification
GEM for Phase 1 simulates the same generic human driver behavior and manual transmission for all vehicles.  The simulated driver responds to changes in the target vehicle speed of the duty cycles by changing the simulated positions of the vehicle's accelerator pedal, brake pedal, clutch pedal, and gear shift lever.  For simplicity in Phase 1 the GEM driver shifted at ideal points for maximum fuel efficiency and the manual transmission was simulated as an ideal transmission that did not have any delay time (i.e., torque interruption) between gear shifts and did not have any energy losses associated with clutch slip during gear shifts.
In GEM for Phase 2 we are proposing to allow manufacturers to select one of three types of transmissions to represent the transmission in the vehicle they are certifying: manual transmission, automated manual transmission, and automatic transmission.  We are currently in the process of developing a dual-clutch transmission type in GEM, but we are not proposing to allow its use in Phase 2 at this time.  Because production of heavy-duty dual clutch transmissions has only begun in the past few months, we do not yet have any experimental data to validate our GEM simulation of this transmission type.  Therefore, we are requesting comment on whether or not there is additional data available for such validation.  Should such data be provided in comments, we may finalize GEM for Phase 2 with a fourth transmission types for dual clutch transmissions. We are also considering an option to address dual clutch transmissions through a post-simulation adjustment as discussed in Chapter 4 of the draft RIA. 
In the proposed modifications to GEM, the driver behavior and the three different transmission types are simulated in the same basic manner as in Phase 1, but each transmission type features a unique combination of driver behavior and transmission responses that match both the driver behavior and the transmission responses we measured during vehicle testing of these three transmission types.  In general the transmission gear shifting strategy for all of the transmissions is designed to shift the transmission so that it is always in the most efficient gear for the current vehicle demand, while staying within certain limits to prevent unrealistically high frequency shifting.  Some examples of these limits are torque reserve limits (which vary as function of engine speed), minimum time-in-gear and minimum fuel efficiency benefit to shift to the next gear.  Some of the differences between the three transmission types include a driver "double-clutching" during gear shifts of the manual transmission only, and "power shifts" and torque converter torque multiplication, slip, and lock-up in automatic transmissions only.  Refer to Chapter 4 of the draft RIA for a more detailed description of these different simulated driver behaviors and transmission types.
We considered an alternative approach where transmission manufacturers would provide vehicle manufacturers with detailed information about their automated transmissions' proprietary shift strategies for representation in GEM.  NAS also recommended this approach.  The advantages of this approach include a more realistic representation of a transmission in GEM and potentially the recognition of additional fuel efficiency improving strategies to achieve additional fuel consumption and CO2 emissions reductions.  However, there are a number of technical and policy disadvantages of this approach.  One disadvantage is that it would require the disclosure of proprietary information between competing companies because some vehicle manufacturers produce their own transmissions and also use other suppliers' transmissions. There are technical challenges too.  For example, some transmission manufacturers have upwards of 40 different shift strategies programmed into their transmission controllers.  Depending on in-use driving conditions, some of which are not simulated in GEM (e.g., changing payloads, changing tire traction) a transmission controller can change its shift strategy.  Representing dynamic switching between multiple proprietary shift strategies would be extremely complex to simulate in GEM.  Furthermore, if the agencies were to propose requiring transmission manufacturers to provide shift strategy inputs for use in GEM, then the agencies would have to devise a compliance strategy to monitor in-use shift strategies, including a driver behavior model that could be implemented as part of an in-use shift strategy test.  This too would be very complex.  If manufacturers were subject to in-use compliance requirements of their transmission shift strategies, this could lead to restricting the use of certain shift strategies in the heavy-duty sector, which would in turn potentially lead to sub-optimal vehicle configurations that do not improve fuel efficiency or adequately serve the wide range of customer needs; especially in the vocational vehicle segment.  For example, if the agencies were to restrict the use of more aggressive and less fuel efficient in-use shift strategies that are used only under heavy loads and steep grades, then certain vehicle applications would need to compensate for this loss of capability through the installation of over-sized and over-powered engines that are subsequently poorly matched and less efficient under lighter load conditions.  Therefore, as a policy consideration to preserve vehicle configuration choice and to preserve the full capability of heavy-duty vehicles today, the agencies are intentionally not requiring transmission manufacturers to submit detailed proprietary shift strategy information to vehicle manufacturers to input into GEM.  This is not unlike Phase 1, where unique transmission and axle attributes were not recognized at all in GEM.  Instead, the agencies are proposing that vehicle manufacturers choose from among the three transmission types that the agencies have already developed, validated, and programmed into GEM.  The vehicle manufacturers would then enter into GEM their particular transmission's number of gears and gear ratios.  The agencies recognize that designing GEM like this would exclude a potentially significant reduction from the GEM simulation.  However, if a manufacturer chooses to use the optional powertrain test procedure, then the agencies' transmission types in GEM would be overridden by the actual data collected during the powertrain test, which would recognize the actual benefit of the transmission.  Note that the optional powertrain test procedure is only advantageous to a vehicle manufacturer if an actual transmission is more efficient and has a superior shift strategy compared to its respective transmission type simulated in GEM.
    Simulating Axles for Vehicle Certification
In GEM for Phase 1 the axle ratio of the primary drive axle and the energy losses assumed in the simulated axle itself were the same for all vehicles.  For Phase 2 we are proposing that the vehicle manufacturer input into GEM the axle ratio of the primary drive axle.  This input would recognize the intent to operate the engine at a particular engine speed when the transmission is operating in its highest transmission gear; especially for the 55 mph and 65 mph duty cycles in GEM.  This input facilitates GEM's recognition of vehicle designs that take advantage of operating the engine at the lowest possible engine speeds.  This is commonly known as "engine down-speeding", and the general rule-of-thumb for heavy-duty engines is that for every 100 rpm decrease in engine speed, there can be about a 1 percent decrease in fuel consumption and CO2 emissions.  Therefore, it is important that GEM allow this value to be input by the vehicle manufacturer.  Axle ratio is also straightforward to verify during any in-use compliance audit.
We are proposing a fixed axle ratio energy efficiency of 95.5 percent at all speeds and loads, but are requesting comment on whether this pre-specified efficiency is reasonable.  However, we know that this efficiency actually varies as a function of axle speed and axle input torque.  Therefore, as an exploratory test we have created a modified version of GEM that has as an input a data table of axle efficiency as a function of axle speed and axle torque.  The modified version of GEM subsequently interpolates this table over each of the duty cycles to represent a more realistic axle efficiency at each point of each duty cycle.  We have also created a draft axle ratio efficiency test procedure that requires the use of a dynamometer test facility.  The draft test procedure includes initial feedback that we have received from axle manufacturers and our own engineering judgment.  Refer to 40 CFR 1037.515 of the Phase 2 proposed regulations, which contain this draft test procedure.  This test procedure could be used to generate the results needed to create the axle efficiency data table for input into GEM.  However, the agencies have not yet conducted experimental tests of axles using this draft test procedure so we are reluctant to propose this test procedure as either mandatory or even optional at this time.  Rather we request comment as to whether or not we should finalize this test procedure and either require its use or allow its use optionally to determine an axle efficiency data table as an input to GEM, which would override the fixed axle efficiency we are proposing at this time.  We also request comment on improving or otherwise refining the test procedure itself.  Note that the agencies believe that allowing the GEM default axle efficiency to be replaced by manufacturer inputs only makes sense if the manufacturer inputs is are the results of a specified test procedure that we could verify by our own independent testing of the axle.
In addition to proposing to require the primary drive axle ratio input into GEM (and potentially  an option to input an actual axle efficiency data table), we are also proposing that the vehicle manufacturer input into GEM whether or not one or two drive axles are driven by the engine.  When a heavy-duty vehicle is equipped with two rear axles where both are driven by the engine, this is called a "6x4" configuration.  "6" refers to the total number of wheel hubs on the vehicle.  In the 6x4 configuration there are two front wheel hubs for the two steer wheels and tires plus four rear wheel hubs for the four rear wheels and tires (or more commonly four sets of rear dual wheels and tires). "4" refers to the number of wheel hubs driven by the engine.  These are the two rear axles that have two wheel hubs each.  Compared to a 6x4 configuration a 6x2 configuration decreases axle energy loss due to friction and oil pumping in two driven axles, by driving only one axle.  The decrease in fuel consumption and CO2 emissions associated with a 6x2 versus 6x4 axle configuration is estimated to be 2.5 percent.   Therefore, in the proposed Phase 2 version of GEM, if a manufacturer simulates a 6x2 axle configuration, GEM decreases the overall GEM result by 2.5 percent.  Note that GEM will similarly decrease the overall GEM result by 2.5 percent for a 4x2 tractor or Class 8 vocational chassis configuration if it has only two wheel hubs driven.  Note that we are not proposing that GEM have an option to increase the overall GEM result by some percentage by selecting, say, a 6x6 or 8x8 option if the front axle(s) are driven.  Because these configurations are only manufactured for specialized vehicles that require extra traction for off-road applications, they are very low volume sales and their increased fuel consumption and CO2 emissions are not significant in comparison to the overall reductions of the proposed Phase 2 program.  Note that 40 CFR 1037.631 (for off-road vocational vehicles), which is being continued from the Phase 1 program, would likely exempt many of these vehicles from the vehicle standards. 
Instead of directly modeling 6x4 or 6x2 axle configuration,  we are proposing use of a post-simulation adjustment approach discussed in Chapter 4 of the drat RIA to model benefits of different axle configuration. 
    Simulating Accessories for Vehicle Certification
Phase 1 GEM uses a fixed power consumption value to simulate the fuel consumed for powering accessories such as power steering pumps and alternators.  While the agencies are not proposing any changes to this approach for Phase 2, we are requesting comment on whether or not we should allow some manufacturer input to reflect the installation of accessory components that result in lower accessory loads.  For example, we could consider an accessory load reduction GEM input based on installing a number of qualifying advanced accessory components that could be in production during Phase 2.  We request comment on identifying such advanced accessory components, and we request comment on defining these components in such a way that they can be unambiguously distinguished from other similar components that do not decrease accessory loads.  We also request comment on how much of a decrease in accessory load should be programmed into GEM if qualifying advanced accessory components are installed.
    Aerodynamics for Tractor, Vocational Vehicle, and Trailer Certification
For GEM in Phase 2 the agencies propose to simulate aerodynamic drag in largely the same manner as in Phase 1.  For vocational chassis we propose to continue to use the same prescribed products of drag coefficient times vehicle frontal area (Cd*A) that were predefined for each of the vocational subcategories in Phase 1.  For tractors we propose to continue to use an aerodynamic bin approach similar to the one that exists in Phase 1 today.  This approach requires tractor manufacturers to conduct a certain amount of coast-down vehicle testing, although manufacturers have the option to conduct scaled wind tunnel testing and/or computational fluid dynamics modeling.  The results of these tests determine into which bin a vehicle is assigned.  Then in GEM the aerodynamic drag coefficient for each vehicle in the same bin is the same.  This approach helps to account for limits in the repeatability of aerodynamic testing and it creates a compliance margin since any test result which keeps the vehicle in the same aerodynamic bin is considered compliant.   However, for Phase 2 we are proposing new boundary values for the bins themselves and we are adding two additional bins in order to recognize further advances in aerodynamic drag reduction beyond what was recognized in Phase 1.  Furthermore, while Phase 1 GEM used predefined frontal areas for tractors while the manufacturers input a Cd value, the agencies propose that manufacturers would use a measured frontal area value for each tractor configuration for Phase 2.  See 40 CFR 1037.521.  
In addition to these proposed changes we are proposing a number of aerodynamic drag test procedure improvements.  One proposed improvement is to update the so-called standard trailer that is prescribed for use during aerodynamic drag testing of a tractor  -  that is, the hypothetical trailer modeled in GEM to represent a trailer paired with the tractor in actual use.  In Phase 1 a non-aerodynamic 53-foot long box-shaped dry van trailer was specified as the standard trailer for tractor aerodynamic testing (see 40 CFR 1037.501(g)).  For Phase 2 we are proposing to modify this standard trailer for tractor testing to make it more similar to the trailers we would require to be produced during the Phase 2 timeframe.  More specifically, we would prescribe the installation of aerodynamic trailer skirts and low rolling resistance tires on the reference trailer, as discussed in further in Section III.E.2.  As explained more fully in Sections III and IV below, the agencies believe that tractor-trailer pairings will be optimized aerodynamically to a significant extent in-use (such as using high-roof cabs when pulling box trailers), and that this real-world optimization should be reflected in the certification testing.  We also request comment on whether or not the Phase 2 standard trailer should include the installation of other aerodynamic devices such as a nose fairing, an under tray, or a boat tail or trailer tail.  Would a standard trailer including these additional components make the tractor program better?
Another proposed aerodynamic test procedure improvement is intended to better account for average wind yaw angle to better reflect the true impact of aerodynamic features on the in-use fuel consumption and CO2 emissions of tractors.  Refer to the proposed test procedures in 40 CFR 1037.521 for further details of these aerodynamic test procedures.
For GEM in Phase 2 the agencies are proposing to use GEM for trailer certification in much the same way that GEM is used for tractor certification in Phase 1.  However, the only technologies recognized by GEM for trailer certification are aerodynamic technologies, tire technologies (including tire rolling resistance and automatic tire inflation systems), and some weight reduction technologies.  Similar to tractor certification, we propose that trailer manufacturers may at their option conduct some amount of aerodynamic testing (e.g., coast-down testing, scale wind tunnel testing, computational fluid dynamics modeling, or possibly aerodynamic component testing) and use this information in GEM.  In this case the agencies propose the configuration of a reference tractor for conducting trailer testing.  Refer to Section IV of this preamble and to 40 CFR 1037.501 of the proposed regulations for details on the proposed reference tractor configuration for trailer test procedures.  Note that for trailers we are proposing a simplified interim certification option that would not require conducting aerodynamic testing of a complete trailer or the use of GEM.  Complete trailer testing and use of GEM would be an option that trailer manufacturers could elect to use during the phase-in period if they determined that the GEM approach would allow their trailer technologies to be better recognized as compared to the proposed simplified trailer certification approach.
     Tires and Tire Inflation Systems for Truck and Trailer Certification
    	For GEM in Phase 1 vehicle manufacturers input the tire rolling resistance of steer and drive tires directly into GEM.  The agencies prescribed an internationally recognized tire rolling resistance test procedure, ISO 28580, for determining the tire rolling resistance value that is input into GEM, as described in 40 CFR 1037.520(c).  For Phase 2 we are proposing to continue this same approach and the use of ISO 28580, and we propose to expand these requirements to trailer tires as well.  We request comment on whether specific modifications to this test procedure would improve its accuracy, repeatability or its test lab to test lab variability.
    In addition to tire rolling resistance, we are proposing that for Phase 2 vehicle manufacturers enter into GEM the tire manufacturer's specified tire loaded radius for the vehicle's drive tires.  This value is commonly reported by tire manufacturers already so that vehicle speedometers can be adjusted appropriately.  This input value is needed so that GEM can accurately convert simulated vehicle speed into axle speed, transmission speed, and ultimately engine speed.
    For tractors and trailers, we propose to allow manufacturers to specify whether or not an automatic tire inflation system is installed.  If one is installed, GEM would assign a 1 percent decrease in the overall fuel consumption and CO2 emissions simulation results for tractors, and a 1.5 percent decrease for trailers.  This would be done through post-simulation adjustments discussed in Chapter 4 of the draft RIA.  In contrast, we are not proposing to assign any decrease in fuel consumption and CO2 emissions for tire pressure monitoring systems.  We do recognize that some drivers would respond to a warning indication from a tire pressure monitoring system, but we are unsure how to assign a fixed decrease in fuel consumption and CO2 emissions for tire pressure monitoring systems.  We would estimate that the value would be less than any value we would assign for an automatic tire inflation system.  We request comment on whether or not we should assign a fixed decrease in fuel consumption and CO2 emissions for tire pressure monitoring systems, and if so, we request comment on what would be an appropriate assigned fixed value.
    Weight Reduction for Tractor, Vocational Chassis and Trailer Certification
We propose for Phase 2 that GEM continues the weight reduction recognition approach in Phase 1, where the agencies prescribe fixed weight reductions, or "deltas", for using certain lightweight materials for certain vehicle components.  In Phase 1 the agencies published a list of weight reductions for using high-strength steel and aluminum materials on a part by part basis.  For Phase 2 we propose to use these same values for high-strength steel and aluminum parts for tractors and for trailers and we have scaled these values for use in certifying the different weight classes of vocational chassis.  In addition we are proposing a similar part by part weight reduction list for tractor parts made from thermoplastic material.  We are also proposing to assign a fixed weight increase to natural gas fueled vehicles, scaled by vehicle weight class, to reflect the weight increase of natural gas fuel tanks versus gasoline or diesel tanks.  For tractors we are proposing to continue the same mathematical approach in GEM to assign 1/3 of a total weight decrease to a payload increase and 2/3 of the total weight decrease to a vehicle mass decrease.  For Phase 1 these ratios were based on the average frequency that a tractor operates at its gross combined weight rating.  Therefore, we propose to use these ratios for trailers in Phase 2.  For vocational chassis, for which Phase 1 did not address weight reduction, we propose a 50/50 ratio.  In other words, for vocational chassis in GEM we propose to assign 1/2 of a total weight decrease to a payload increase and 1/2 of the total weight decrease to a vehicle mass decrease.  We request comment on whether or not this 50/50 ratio is appropriate for vocational chassis.
    GEM Duty Cycles for Tractor, Vocational Chassis and Trailer Certification
In Phase 1, there are three GEM vehicle duty cycles that represented stop-and-go city driving (ARB Transient), urban highway driving (55 mph), and rural interstate highway driving (65 mph).  In Phase 1 these cycles were time-based.  That is, they were specified as a function of simulated time and the duty cycles ended once the specified time elapsed in simulation.  The agencies propose to use these three drive cycles in Phase 2, but with some revisions.  First the agencies propose that GEM would simulate these cycles on a distance-based specification, rather than on a time-based specification.  A distance-based specification ensures that even if a vehicle in simulation does not always achieve the target vehicle speed, the vehicle will have to continue in simulation for a longer period of time to complete the duty cycle.  This ensures that vehicles are evaluated over the complete distance of the duty cycle and not just the portion of the duty cycle that a vehicle completes in a given time period.  A distance-based duty cycle specification also facilitates a straightforward specification of road grade as a function of distance along the duty cycle.  For Phase 2 the agencies are proposing to enhance the 55 mph and 65 mph duty cycles by adding representative road grade to exercise the simulated vehicle's engine, transmission, axle, and tires in a more realistic way.  A flat road grade profile over a constant speed test does not present many opportunities for a transmission to shift gears, and may have the unintended consequence of enabling underpowered vehicles or excessively downsped drivetrains to generate credits.  The road grade profile proposed is the same for both the 55 mph and 65 mph duty cycles, and the profile was based on real over-the-road testing the agencies directed under an agency-funded contract with Southwest Research Institute.  See Section III.E for more details on development of the proposed road grade profile.  The agencies are continuing to evaluate alternate road grade profiles including actual sections of restricted access highway with road grades that are statistically similar to the national road grade profile as well as purely synthetic road grade profiles.  We request comments on the proposed road grade profile, and would welcome additional statistical evaluations of this road grade profile and other road grade profiles for comparison.  We believe that the enhancement of the 55 mph and 65 mph duty cycles with road grade is consistent with the NAS recommendation regarding road grade.
We recognize that even with the proposed road grade profile, GEM may continue to under predict the number of transmission shifts of vehicles on restricted access highways if the model simulates constant speeds.  We request comment on other ways in which the proposed 55 mph and 65 mph duty cycles could be enhanced.  For example, we request comment on whether a more aggressive road grade profile would induce a more realistic and representative number of transmission gear shifts.  We also request comment on whether we should consider varying the vehicle target speed over the 55 mph and/or 65 mph duty cycles to simulate human driver behavior reacting to traffic congestion.  This would increase the number of shifts during the 55 mph and 65 mph duty cycles, though it may be possible for an equivalent effect to be achieved by assigning a greater weighting to the transient cycle in the GEM composite test score.  
  
    Workday Idle Operation for Vocational Vehicle Certification
In the Phase 1 program, reduction in idle emissions was recognized only for sleeper cab tractors, and only with respect to hotelling idle, where a driver needs power to operate heating, ventilation, air conditioning and other electrical equipment in order to use the sleeper cab to eat, rest, or conduct other business.  As described in Section V, the agencies are now proposing to recognize in GEM technologies that reduce workday idle emissions, such as automatic stop-start systems and automatic transmissions that shift to neutral at idle.  Many vocational vehicle applications operate on patterns implicating workday idle cycles, and the agencies are proposing test procedures in GEM to account specifically for these cycles and potential controls.  GEM would recognize these idle controls in two ways.  For technologies like neutral-idle that address idle that occurs during the transient cycle (representing the type of operation that would occur when the vehicle is stopped at a stop light), GEM would interpolate lower fuel rates from the engine map.  For technologies like start-stop and auto-shutdown that eliminate some of the idle that occurs when a vehicle is stopped or parked, GEM would assign a value of zero fuel rate for what we are proposing as an "idle cycle".  This idle cycle would be weighted along with the 65 mph, 55 mph, and ARB Transient duty cycles according to the vocational chassis duty cycle weighting factors that we are proposing for Phase 2.  These weighting factors are different for each of the three vocational chassis speed categories that we are proposing for Phase 2.  While we are not proposing to apply this idle cycle for tractors, we do request comment on whether or not we should consider a applying this idle cycle to certain tractor types, like day cabs that could experience more significant amounts of time stopped or parked as part of an urban delivery route.  We also request comment on whether or not start-stop or auto-shutdown technologies are being developed for tractors; especially for Class 7 and 8 day cabs that could experience more frequent stops and more time parked for deliveries.
Validation of the Proposed GEM 
     After making the proposed changes to GEM, the agencies validated the model in comparison to over 130 vehicle variants, consistent with the recommendation made by the NAS in their Phase 2-First Report.  As is described in Chapter 4 of the Draft RIA, good agreement was observed between GEM simulations and test data over a wide range of vehicles.  In general, the model simulations agreed with the test results within +-5 percent on an absolute basis.  As pointed out in Chapter 4.3.2 of the RIA, relative accuracy is more relevant to this rulemaking.  This is because all of the numeric standards proposed for tractors, trailers and vocational chassis are derived from running GEM first with Phase 1 "baseline" technology packages and then with various candidate Phase 2 technology packages.  The differences between these GEM results are examined to select stringencies.  In other words, the agencies used the same version of GEM to establish the standards as was used to evaluate baseline performance for this rulemaking.  Therefore, it is most important that GEM accurately reflects relative changes in emissions for each added technology.  For vehicle certification purposes it is less important that GEM's absolute value of the fuel consumption or CO2 emissions are accurate compared to laboratory testing of the same vehicle.  The ultimate purpose of this new version of GEM will be to evaluate changes or additions in technology, and compliance is demonstrated on a relative basis to the numerically standards that were also derived from GEM.  Nevertheless, the agencies concluded that the absolute accuracy of GEM is generally within +-5 percent, as shown in Figure II-1.  Chapter 4.3.2 of the draft RIA shows that relative accuracy is even better, +-2-3 percent.   

Figure II-1: GEM Validation Data
In addition to this successful validation against experimental results, the agencies have also initiated a peer review of the proposed GEM source code.  This peer review has been submitted to Docket # EPA-HQ-OAR-2014-0827.  
Supplements to GEM Simulation
As in Phase 1, for most tractors and vocational vehicles, compliance with the Phase 2 g/ton-mile vehicle standards could be evaluated by directly comparing the GEM result to the standard.  However, in Phase 1, manufacturers incorporating innovative or advanced technologies could apply improvement factors to lower the GEM result slightly before comparing to the standard.  For example, a manufacturer incorporating a launch-assist mild hybrid that was approved for a 5 percent benefit would apply a 0.95 improvement factor to its GEM results for such vehicles.  In this example, a GEM result of 300 g/ton-mile would be reduced to 285 g/ton- mile.
For Phase 2, the agencies are proposing to largely continue the existing Phase 1 innovative technology approach.  We are also proposing to create a parallel option specifically related to innovative powertrain designs.  These proposals are discussed below.
    Innovative/Off-Cycle Technology Procedures
In Phase 1 the agencies adopted an emissions credit generating opportunity that applied to new and innovative technologies that reduce fuel consumption and CO2 emissions, that were not in common use with heavy-duty vehicles before model year 2010 and are not reflected over the test procedures or GEM (i.e., the benefits are "off-cycle").  See 76 FR at 57253.  As was the case in the development of Phase 1, the agencies are proposing to continue this approach for technologies and concepts with CO2 emissions and fuel consumption reduction potential that might not be adequately captured over the proposed Phase 2 duty cycles or are not proposed inputs to GEM.  Note, however, that the agencies are proposing to refer to these technologies as off-cycle rather than innovative.  See Section I for more discussion of innovative and off-cycle technologies.    
We recognize that the Phase 1 testing burden associated with the innovative technology credit provisions discouraged some manufacturers from applying.  To streamline recognition of many technologies, default values have been integrated directly into GEM.  For example, automatic tire inflation systems and 6x2 axles both have fixed default values, recognized through a post-simulation adjustment approach discussed in Chapter 4 of the draft RIA.  This is similar to the technology "pick list" from our light-duty programs.  See 77 FR at 62833-35 (Oct. 15, 2012).  If manufacturers wish to receive additional credit beyond these fixed values, then the innovative/off-cycle technology credit provisions would provide the regulatory path toward that additional recognition.  
Beyond the additional technologies that the agencies have added to GEM, the agencies also believe there are several emerging technologies that are being developed today, but would not be accounted for in GEM as we are proposing it because we do not have enough information about these technologies to assign fixed values to them in GEM.  Any credits for these technologies would need to be based on the off-cycle technology credit generation provisions.  These require the assessment of real-world fuel consumption and GHG reductions that can be measured with verifiable test methods using representative operating conditions typical of the engine or vehicle application.
As in Phase 1, the agencies are proposing to continue to provide two paths for approval of the test procedure to measure the CO2 emissions and fuel consumption reductions of an off-cycle technology used in the HD tractor.  See 40 CFR 1037.610 and 49 CFR 535.7.  The first path would not require a public approval process of the test method.  A manufacturer can use "pre-approved" test methods for HD vehicles including the A-to-B chassis testing, powerpack testing or on-road testing.  A manufacturer may also use any developed test procedure which has known quantifiable benefits.  A test plan detailing the testing methodology is required to be approved prior to collecting any test data.  The agencies are also proposing to continue the second path which includes a public approval process of any testing method which could have questionable benefits (i.e., an unknown usage rate for a technology).  Furthermore, the agencies are proposing to modify its provisions to better clarify the documentation required to be submitted for approval aligning them with provisions in 40 CFR 86-1869-12 and NHTSA is separately proposing to prohibit credits from technologies addressed by any of its crash avoidance safety rulemakings (i.e., congestion management systems).  We welcome recommendations on how to improve or streamline the off-cycle technology approval process.
  Sections III and V describe tractor and vocational vehicle technologies, respectively, that the agencies anticipate may qualify for these off-cycle credit provisions.  
    Powertrain Testing
The agencies are proposing a powertrain test option to allow for a robust way to quantify the benefits of CO2 reducing technologies that are a part of the powertrain (conventional or hybrid) that are not captured in the GEM simulation.  Powertrain testing and certification was included as one of the NAS recommendations in the Phase 2  - First Report.  Some of these improvements are transient fuel control, engine and transmission control integration and hybrid systems.  To limit the amount of testing, the powertrain would be divided into families and powertrains would be tested in a limited number of simulated vehicles that cover the range of vehicles in which the powertrain would be installed.  The powertrain test results would then be used to override the engine and transmission simulation portion of GEM.
The largest proposed change from the Phase 1 powertrain procedure is that only the advanced powertrain would need to be tested (as opposed to the Phase 1 requirement where both the advanced powertrain and the conventional powertrain had to be tested).  This change is possible because the proposed GEM simulation uses the engine fuel map and torque curve from the actual engine in the vehicle to be certified.  For the powertrain results to be used broadly across all the vehicles that the powertrain would go into, a matrix of 8 to 9 tests would be needed per vehicle cycle.  These tests would cover the range of coefficient of drag, coefficient of rolling resistance, vehicle mass and axle ratio of the vehicles that the powertrain will be installed in.  The main output of this matrix of tests would be CO2 per positive work measured at the output of the transmission as a function of positive work and average transmission output speed over average vehicle speed.  This matrix of test results would then be used to calculate the vehicle's CO2 emissions by taking the work per ton-mile from the GEM simulation and multiplying it by the interpolated work specific CO2 mass emissions from the powertrain test.  
Along with proposing changes to how the powertrain results are used, the agencies are also proposing changes to the procedures that describe how to carry out a powertrain test.  The changes are to give additional guidance on controlling the temperature of the powertrains intake-air, oil, coolant, block, head, transmission, battery, and power electronics so that they are within their expected ranges for normal operation.  The equations that describe the vehicle model are proposed to be changed to allow for input of the axle's efficiency, driveline rotational inertia, as well as the mechanical and electrical accessory loads.  
Production Vehicle Testing for Comparison to GEM
The agencies are is proposing to require tractor and vocational vehicle manufacturers to annually chassis test 5 production vehicles over the GEM cycles to verify that relative reductions simulated in GEM are being achieved in actual production.  See 40 CFR 1037.665.  We would not expect absolute correlation between GEM results and chassis testing.  GEM makes many simplifying assumptions that do not compromise its usefulness for certification, but do cause it to produce emission rates different from what would be measured during a chassis dynamometer test.  Given the limits of correlation possible between GEM and chassis testing, we would not expect such testing to accurately reflect whether a vehicle was compliant with the GEM standards.  Therefore, we are proposing to not apply compliance liability to such testing.  Rather, this testing would be for informational purposes only.  However, we do expect there to be correlation in a relative sense.  Vehicle to vehicle differences showing a 10 percent improvement in GEM should show a similar percent improvement with chassis dynamometer testing.  Nevertheless, manufacturers would not be subject to recall or other compliance actions if chassis testing did not agree with the GEM results on a relative basis.  Rather, the agencies would continue evaluate in-use compliance by verifying GEM inputs and testing in-use engines.
EPA believes this chassis test program is necessary because of our experience implementing regulations for heavy-duty engines.  In the past, manufacturers have designed engines that have much lower emissions on the duty cycles than occur during actual use.  By proposing this simple test program, we hope to be able to identify such issues earlier and to dissuade any attempts to design solely to the certification test.  We also expect the results of this testing to help inform the need for any further changes to GEM.
As already noted in Section II. B. (1) , it can be expensive to build chassis test cells for certification.  However, EPA is proposing to structure this pilot-scale program to minimize the costs.  First, we are proposing that this chassis testing would not need to comply with the same requirements as would apply for official certification testing.  This would allow testing to be performed in developmental test cells with simple portable analyzers.  Second, since the proposed program would require only 5 tests per year, manufacturers without their own chassis testing facility would be able to contract with a third party to perform the testing.  Finally, EPA proposes to apply this testing to only those manufacturers with annual production in excess of 20,000 vehicles.
Proposed Engine Test Procedures and Engine Standards
For the most part, the proposed Phase 2 engine standards are a continuation of the Phase 1 program, but with more stringent standards for compression-ignition engines.  Nevertheless, the agencies are proposing important changes related to the test procedures and compliance provisions.  These changes are described below.
As already discussed in Section II. B. the agencies are proposing a regulatory structure in which engine technologies are evaluated using engine-specific test procedures as well using GEM, which is vehicle-based.  We are proposing separate standards for each procedure.  The proposed engine standards described in Section II. D. (2) and the proposed vehicle standards described in Sections III and V are based on the same engine technology, which is described in Section II. D. (2) .  We request comment on whether the engine and vehicle standards should be based on the same projected technology.   As described below, while the agencies projected the same engine technology for engine standards and for vehicle standards, we separately projected the technology that would be appropriate for:
         * Gasoline vocational engines and vehicles
         * Diesel vocational engines and vehicles
         * Tractor engines and vehicles   
Before addressing the engine standards and engine technology in Section II. D. (2) , the agencies describe the test procedures that would be used to evaluate these technologies in Section II. D. (1) below.  We believe that without first understanding the test procedures, the numerical engine standards would not have the proper context.  
Engine Test Procedures
The Phase 1 engine standards relied on the engine test procedures specified in 40 CFR part 1065.  These procedures were previously used by EPA to regulate criteria pollutants such as NOx and PM, and few changes were needed to employ them for purposes of the Phase 1 standards.  The agencies are proposing significant changes to two areas for Phase 2:  (1) cycle weighting; and (2) GEM inputs.  (Note that EPA is also proposing some minor changes to the basic part 1065 test procedures, as described in Section XIII).
The diesel (i.e., compression-ignition) engine test procedure relies on two separate engine test cycles.  The first is the Heavy-duty Federal Test Procedure (Heavy-duty FTP) that includes transient operation typified by frequent accelerations and decelerations, similar to urban or suburban driving.  The second is the Supplemental Engine Test (SET) which includes 13 steady-state test points.  The SET was adopted by EPA to address highway cruise operation and other nominally steady-state operation.  However, it is important to note that it was intended as a supplemental test cycle and not necessarily to replicate precisely any specific in-use operation.  
The gasoline (i.e., spark-ignition) engine test procedure relies on a single engine test cycle: a gasoline version of Heavy-duty FTP.  The agencies are not proposing changes to the gasoline engine test procedures.
It is worth noting that EPA sees great value in using the same test procedures for measuring GHG emissions as is used for measuring criteria pollutants.  From the manufacturers' perspective, using the same procedures minimizes their test burden.  However, EPA sees additional benefits.  First, as already noted in Section II. B. (2) (b), requiring engine manufacturers to comply with both NOx and CO2 standards using the same test procedures discourages alternate calibrations that would trade NOx emissions against fuel consumption depending how the engine or vehicle is tested.  Second, this approach leverages the work that went into developing the criteria pollutant cycles.  Taken together, these factors support our decision to continue to rely on the Part 1065 test procedures with only minor adjustments, such as those described in Section II. D. (1) (a).  Nevertheless, EPA would consider more substantial changes if they were necessary to incentivize meaningful technology changes, similar to the changes being made to GEM for Phase 2 to address additional technologies.  
    SET Cycle Weighting 
The SET cycle was adopted by EPA in 2000 and modified in 2005 from a discrete-mode test to a ramped-modal cycle to broadly cover the most significant part of the speed and torque map for heavy-duty engines, defined by three non-idle speeds and three relative torques.  The low speed is often called the "A speed", the intermediate speed is often called the "B speed", and the high speed is often called the "C speed."  As is shown in Table II-1, the SET weights these three speeds at 23 percent, 39 percent, and 23 percent.
            Table II-1 SET Modes Weighting Factor in Phase 1
                                 Speed, % Load
                        Weighting factor in Phase 1 (%)
                                     Idle
                                      15
                                    A, 100
                                       8
                                     B, 50
                                      10
                                     B, 75
                                      10
                                     A, 50
                                       5
                                     A, 75
                                       5
                                     A, 25
                                       5
                                    B, 100
                                       9
                                     B, 25
                                      10
                                    C, 100
                                       8
                                     C, 25
                                       5
                                     C, 75
                                       5
                                     C, 50
                                       5
                                     Total
                                      100
                                       
                                       
                                 Total A Speed
                                      23
                                 Total B Speed
                                      39
                                 Total C Speed
                                      23

The C speed is typically in the range of 1800 rpm for current HHD engine designs.   However, it is becoming less common for engines to operate often in such a high speed in real world driving condition, and especially not during cruise vehicle speed between 55 and 65 mph.  The agencies receive confidential business information from a few vehicle manufacturers that support this observation.  Thus, although the current SET represents highway operation better than the FTP cycle, it is not an ideal cycle to represent future highway operation.  Furthermore, given the recent trend configure drivetrains to operate engines at speeds down to a range of 1150-1200 rpm at vehicle speed of 65mph.  This trend would make the typical highway engine speeds even further away from C speed.
     To address this issue, the agencies are proposing new weighting factors for the Phase 2 GHG and fuel consumption standards.  The proposed new SET mode weightings move most of C weighting to "A" speed, as shown in Table II-2.  It would also slightly reduce the weighting factor on the idle speed. 
  The agencies request comment on the proposed reweighting.
      Table II-2 Proposed SET Modes Weighting Factor in Phase 2
                                 Speed/% Load
                   Proposed Weighting factor in Phase 2 (%)
                                     Idle
                                      12
                                    A, 100
                                       9
                                     B, 50
                                      10
                                     B, 75
                                      10
                                     A, 50
                                      12
                                     A, 75
                                      12
                                     A, 25
                                      12
                                    B, 100
                                       9
                                     B, 25
                                       9
                                    C, 100
                                       2
                                     C, 25
                                       1
                                     C, 75
                                       1
                                     C, 50
                                       1
                                     Total
                                      100
                                       
                                       
                                 Total A Speed
                                      45
                                 Total B Speed
                                      38
                                 Total C Speed
                                       5

    Measuring GEM Engine Inputs
Although GEM does not apply directly to engine certification, implementing the Phase 2 GEM would impact engine manufacturers.  To recognize the contribution of the engine in GEM the engine fuel map, full load torque curve and motoring torque curve have to be input into GEM.  To insure the robustness of each of those inputs, a standard procedure has to be followed.  Both the full load and motoring torque curve procedures are already defined in 40CFR part 1065 for engine testing.  However, the fuel mapping procedure being proposed would be new.  The agencies have compared the proposed procedure against other accepted engine mapping procedures with a number of engines at various labs including EPA's NVFEL, Southwest Research Institute sponsored by the agencies, and Environment Canada's laboratory.  The proposed procedure was selected because it proved to be accurate and repeatable, while limiting the test burden to create the fuel map. This proposed provision is consistent with NAS's recommendation (3.8).
 One important consideration is the need to correct measured fuel consumption rates for the carbon and energy content of the test fuel.  For engine tests, we propose to continue the Phase 1 approach, which is specified in 40 CFR 1036.530.  We propose a similar approach to GEM fuel maps in Phase 2.
The agencies are proposing that engine manufacturers must certify fuel maps as part of their certification to the engine standards, and that they be required to provide those maps to vehicle manufacturers.  The one exception to this requirement would be for cases in which the engine manufacturer certifies based on powertrain testing, as described in Section II. D. (1) (c).  In such cases, engine manufacturers would not be required to also certify the otherwise applicable fuel maps.  We are not proposing that vehicle manufacturers be allowed to develop their own fuel maps for engines they do not manufacture.
    Engine Test Procedures for Replicating Powertrain Tests 
As described in Section C. (3) (b), the agencies are proposing a powertrain test option to quantify the benefits of CO2 reducing powertrain technologies.  These powertrain test results would then be used to override the engine and transmission simulation portion of GEM.  The agencies are proposing to require that any manufacturer choosing to use this option also measure engine speed and engine torque during the powertrain test so that the engine's performance during the powertrain test could be replicated in a non-powertrain engine test cell.  Subsequent engine testing would be conducted using the normal part 1065 engine test procedures, and g/hp-hr CO2 results would be compared to the levels the manufacturer reported during certification.  Such testing would apply for both confirmatory and selective enforcement audit testing.
    CO2 from Urea SCR Systems 
For diesel engines utilizing urea SCR emission control systems for NOx reduction, the agencies are proposing to allow correction of the final engine fuel map and powertrain duty cycle CO2 emission results to account for the contribution of CO2 from the urea injected into the exhaust.  This urea could contribute up to 1 percent of the total CO2 emissions from the engine.  Since current urea production methods use gaseous CO2 captured from the atmosphere (along with NH3), CO2 from urea consumption does not represent a net carbon emission.  This adjustment is necessary so that fuel maps developed from CO2 measurements would be consistent with fuel maps from direct measurements of fuel flow rates.  Thus, we are only proposing to allow this correction for emission tests where CO2 emissions are determined from direct measurement of CO2 and not from fuel flow measurement, which would not be impacted by CO2 from urea.
We note that this correction would be voluntary for manufacturers, and expect that some manufacturers may determine that the correction is too small to be of concern.  The agencies will use this correction with any engines for which the engine manufacturer applied the correction for its fuel maps during certification. 
We are not proposing this correction for engine test results with respect to the engine CO2 standards.  Both the Phase 1 standards and the proposed standards for CO2 from diesel engines are based on test results that included CO2 from urea.  In other words, these standards are consistent with using a test procedure that does not correct for CO2 from urea.  We request comment on whether it would be appropriate to allow this correction for the Phase 2 engine CO2 standards, but also adjust the standards to reflect the correction.  At this time, we believe that reducing the numerical value of the CO2 standards by 1 g/hp-hr would make the standards consistent with measurement that are corrected for CO2 from urea.  However, we also request comment on the appropriateness of applying a 2 g/hp-hr adjustment should we determine it would better reflect the urea contribution for current engines.
    Potential Alternative Certification Approach
In Section II. D. (1) (b), we explained that although GEM does not apply directly to engine certification, implementing the Phase 2 GEM would impact engine manufacturers by requiring that they measure engine fuel maps.  In Section II. B. (2) , the agencies noted that some stakeholders may have concerns about the proposed regulatory structure that would require engine manufacturers to provide detailed fuel consumption maps for GEM.  Given such concerns, the agencies are requesting comment on an approach that could mitigate the concerns by allowing both vehicle and engine to use the same driving cycles for certification.  The detailed description of this alternative certification approach can be seen in Appendix A of the draft RIA.  We are requesting comment on allowing this approach as an option, or as a replacement to the proposed approach.  Commenters supporting this approach should address possible impacts on the stringency of the proposed standards.
This approach utilizes GEM with a default engine fuel map pre-defined by the agency to run a number of pre-defined vehicle configurations over three certification cycles.  Engine torque and speed profile would be obtained from the simulations, and would be used to specify engine dynamometer commands for engine testing.  The results of this testing would be a CO2 map as function of the integrated work and the ratio of averaged engine speed (N) to averaged vehicle speed (V) defined as (N/V) over each certification cycle.  In vehicle certification, vehicle manufacturers would run GEM with the to-be-certified vehicle configuration and the agency default engine fuel map separately for each GEM cycle.  Applying the total work and N/V resulted from the GEM simulations to the CO2 map obtained from engine tests would determine CO2 consumption for vehicle certification.  For engine certification, we are considering allowing the engine to be certified based on one of the points conducted during engine alternative CO2 map tests mentioned above rather than based on the FTP and SET cycle testing.    
Proposed Engine Standards for CO2 and Fuel Consumption 
We are proposing to maintain the existing Phase 1 regulatory structure for engine standards, which had separate standards for spark-ignition engines (such as gasoline engines) and compression-ignition engines (such as diesel engines), but we are proposing changes to how these standards would apply to natural gas fueled engines.  As discussed in Section II. B. (2) (b), the agencies see important advantages to maintaining separate engines standards, such as improved compliance assurance and better control during transient engine operation.
Phase 1 also applied different test cycles depending on whether the engine is used for tractors, vocational vehicles, or both, and we propose to continue this as well.   We assume that CO2 at the end of Phase 1 is the baseline of Phase 2.   Table II-3 shows the Phase 1 CO2 standards for diesel engines, which serve as the baseline for our analysis of the proposed Phase 2 standards. 
Table II-3 Phase 2 Baseline CO2 Performance (g/bhp-hr)
LHDD - FTP
MHDD - FTP
HHDD - FTP
                                   MHDD-SET
HHDD - SET
576
576
555
                                      487
460
The gasoline engine baseline CO2 is 627 (g/bhp-hr).  The agencies used the baseline engine to assess the potential of the technologies described in the following sections. As described below, the agencies are proposing new compression-ignition engine standards for Phase 2 that would require additional reductions in CO2 emissions and fuel consumption beyond the baseline.  However, as also described below in Section II. D. (2) (b), we are not proposing more stringent CO2 or fuel consumption standards for new heavy-duty gasoline engines.  Note, however, that we are projecting some small improvement in gasoline engine performance that would be recognized over the vehicle cycles.
For heavy-heavy-duty diesel engines to be installed in Class 7 and 8 combination tractors, the agencies are proposing the standards shown in Table II-4.  The proposed MY 2027 standards for engines installed in tractors would require engine manufacturers to achieve, on average, a 4.2 percent reduction in fuel consumption and CO2 emissions beyond the Phase 1 standard.  We propose to adopt interim engine standards in MY 2021 and MY 2024 that would require diesel engine manufacturers to achieve, on average, 1.5 percent and 3.7 percent reductions in fuel consumption and CO2 emissions, respectively.  
Table II-4 Proposed Phase 2 Heavy-duty Tractor Engine Standards for Engines over the SET Cycle
Model Year
                                   Standard
                           Medium Heavy-Duty Diesel
                            Heavy Heavy-Duty Diesel
2021-2023
                                     CO2 
                                  (g/bhp-hr)
                                      479
                                      453

                     Fuel Consumption (gallon/100 bhp-hr)
                                     4.71
                                     4.45
2024 -2026
                                     CO2 
                                  (g/bhp-hr)
                                      469
                                      443

                     Fuel Consumption (gallon/100 bhp-hr)
                                     4.61
                                     4.35
2027 and Later
                                     CO2 
                                  (g/bhp-hr)
                                      466
                                      441

                     Fuel Consumption (gallon/100 bhp-hr)
                                     4.58
                                     4.33

For compression-ignition engines fitted into vocational vehicles, the agencies are proposing MY 2027 standards that would require engine manufacturers to achieve, on average, a 4.0 percent reduction in fuel consumption and CO2 emissions beyond the Phase 1 standard.  We propose to adopt interim engine standards in MY 2021 and MY 2024 that would require diesel engine manufacturers to achieve, on average, 2.0 percent and 3.5 percent reductions in fuel consumption and CO2 emissions, respectively.  
Table II-5presents the CO2 and fuel consumption standards the agencies propose for compression-ignition engines to be installed in vocational vehicles.  The first set of standards would take effect with MY 2021, and the second set would take effect with MY 2024.
Table II-5 Proposed Vocational Diesel Engine Standards over the Heavy-Duty FTP Cycle
Model Year
Standard
Light Heavy-Duty Diesel
Medium Heavy-Duty Diesel
Heavy Heavy-Duty Diesel
2021-2023
CO2 Standard (g/bhp-hr)
565
565
544

Fuel Consumption Standard (gallon/100 bhp-hr)
5.55
5.55
5.34
2024 -2026
CO2 Standard (g/bhp-hr)
556
556
536

Fuel Consumption (gallon/100 bhp-hr)
5.46
5.46
5.26
2027 and Later
CO2 Standard (g/bhp-hr)
553
553
533

Fuel Consumption (gallon/100 bhp-hr)
5.43
5.43
5.23
Although both EPA and NHTSA are proposing to begin the Phase 2 engine standards, EPA considered proposing Phase 2 standards that would begin before MY 2021  -  that is with less lead time.  NHTSA is required by statute to provide four models years of lead time, while EPA is required only to provide lead time "necessary to permit the development and application of the requisite technology" (CAA Section 202 (a)(2)).  However, as noted in Section I, lead time cannot be separated for other relevant factors such as costs, reliability, and stringency.  Proposing these standards before 2021 could increase the risk of reliability issues in the early years.  Given the limited number of engine models that each manufacturer produces, managing that many new standards would be problematic (i.e., new Phase 1 standards in 2017, new Phase 2 EPA standards in 2018, 2019, or 2020, new standards in 2021, 2024, and again in 2027).   Considering these challenges, EPA determined that earlier model year standards would not be appropriate, especially given the value of harmonizing the NHTSA and EPA standards. 
    Feasibility of the Diesel (Compression-Ignition) Engine Standards
In this section, the agencies discuss our assessment of the feasibility of the proposed engine standards and the extent to which they would conform to our respective statutory authority and responsibilities.  More details on the technologies discussed here can be found in the Draft RIA Chapter 2.3.  The feasibility of these technologies is further discussed in draft RIA Chapter 2.7 for tractor and vocational vehicle engines.  Note also, that the agencies are considering adopting engine standards with less lead time, and may do so in the Final Rules.  These standards are discussed in Section II. D. (2) (e).
Based on the technology analysis described below, the agencies can project a technology path exists to allow manufacturers to meet the proposed final Phase 2 standards by 2027, as well as meeting the intermediate 2021 and 2024 standards.  The agencies also project that manufacturers would be able to meet these standards at a reasonable cost and without adverse impacts on in-use reliability.  Note that the agencies are still evaluating whether these same standards could be met sooner, as was analyzed in Alternative 4.
In general, engine performance for CO2 emissions and fuel consumption can be improved by improving combustion and reducing energy losses.  More specifically, the agencies have identified the following key areas where fuel efficiency can be improved:
         * Combustion optimization
         * Turbocharging system
         * Engine friction and other parasitic losses
         * Exhaust aftertreatment
         * Engine breathing system
         * Engine downsizing
         * Waste heat recovery
         * Transient control for vocational engines only
The agencies are proposing to phase-in the standards from 2021 through 2027 so that manufacturers could gradually introduce these technologies.  For most of these improvements, the agencies project manufacturers could begin applying them to about 45-50 percent of their heavy-duty engines by 2021, 90-95 percent by 2024, and ultimately apply them to 100 percent of their heavy-duty engines by 2027.  However, for some of these improvements (such as waste heat recovery and engine downsizing) we project lower application rates in the Phase 2 time frame.  This phase-in structure is consistent with the normal manner in which manufacturers introduce new technology to manage limited R&D budgets and well as to allow them to work with fleets to fully evaluate in-use reliability before a technology is applied fleet-wide.  The agencies believe the proposed phase-in schedule would allow manufacturers to complete these normal processes.  As described in Section II. D. (2) (e), the agencies are also requesting comment on whether manufacturers could complete these development steps more quickly so that they could meet these standards sooner.
Based on our technology assessment described below, the proposed engine standards appear to be consistent with the agencies' respective statutory authorities.  All of the technologies with high penetration rates above 50 percent have already been demonstrated to some extent in the field or in research laboratories, although some development work remains to be completed.  We note that our feasibility analysis for these engine standards is not based on projecting 100 percent application for any technology until 2027.  We believe that projecting less than 100 percent application is appropriate and gives us confidence that the interim standards would be feasible.  
The agencies have carefully considered the costs of applying these technologies, which are summarized in Section II. D. (2) (d).  These costs appear to be reasonable on both a per engine basis, and when considering payback periods.  The engine technologies are discussed in more detail below.  Readers are encouraged to see the draft RIA Chapter 2 for additional details (and underlying references) about our feasibility analysis.  
Combustion Optimization
Although manufacturers are making significant improvements in combustion to meet the Phase 1 engine standards, the agencies project that even more improvement would be possible after 2018.  For example, improvements to fuel injection systems would allow more flexible fuel injection capability with higher injection pressure, which can provide more opportunities to improve engine fuel efficiency.  Further optimization of piston bowls and injector tips would also improve engine performance and fuel efficiency.  We project that a reduction of up to 1.0 percent is feasible in the 2024 model year through the use of these technologies, although it would likely apply to only 95 percent of engines until 2027.
Another important area of potential improvement is advanced engine control incorporating model based calibration to reduce losses of control during transient operation.  Improvements in computing power and speed would make it possible to use much more sophisticated algorithms that are more predictive than today's controls.  Because such controls are only beneficial during transient operation, they would reduce emission over the FTP cycle, and during in-use operation, they would not reduce emissions over the SET cycle.  Thus the agencies are projecting model based control reductions only for vocational engines.  Although this control concept is not currently available, we project model based controls achieving a 2 percent improvement in transient emissions could be in production for some engine models by 2021.  By 2027, we project over one-third of all vocational diesel engines would incorporate model-based controls.
Turbocharging System
Many advanced turbocharger technologies can be potentially added into production in the time frame between 2021 and 2027, and some of them are already in production, such as mechanical or electric turbo-compound, more efficient variable geometry turbine, and Detroit Diesel's patented asymmetric turbocharger.  A turbo compound system extracts energy from the exhaust to provide additional power.  Mechanical turbo-compounding includes a power turbine located downstream of the turbine which in turn is connected to the crankshaft to supply additional power.  On-highway demonstrations of this technology began in the early 1980s.  It was used first in heavy duty production by Detroit Diesel for their DD15 and DD16 engines and reportedly provided a 3 to 5 percent fuel consumption reduction.  Results are duty cycle dependent, and require significant time at high load to see a fuel efficiency improvement.  Light load factor vehicles can expect little or no benefit.  Volvo reports two to four percent fuel consumption improvement in line haul applications, which could be in production even by 2020
Engine Friction and Parasitic Losses
The friction associated with each moving part in an engine results in a small loss of engine power.  For example, frictional losses occur at bearings, in the valve train, and at the piston-cylinder interface.  Taken together such losses represent a large fraction of all energy lost in an engine.  For Phase 1, the agencies projected a 1-2 percent reduction in fuel consumption due to friction reduction.  However, new information leads us to project that an additional 1.4 percent reduction would be possible for some engines by 2021 and all engines by 2027.  These reductions would be possible due to improvements in bearing materials, lubricants, and new accessory designs such as variable-speed pumps.
Aftertreatment Optimization
All diesel engines manufacturers are already using diesel particulate filter (DPF) to reduce particulate matter (PM) and selective catalytic reduction (SCR) to reduce NOx emissions.  The agencies see two areas in which improved aftertreatment systems can also result in lower fuel consumption.  First, increased SCR efficiency could allow re-optimization of combustion for better fuel consumption because the SCR would be capable of reducing higher engine-out NOx emissions.  Second, improved designs could reduce backpressure on the engine to lower pumping losses.  The agencies project the combined impact of such improvements could be 0.6 percent or more. 
Engine Breathing System
Various high efficiency air handling (for both intake air and exhaust) processes could be produced in the 2020 and 2024 time frame.  To maximize the efficiency of such processes, induction systems may be improved by manufacturing more efficiently designed flow paths (including those associated with air cleaners, chambers, conduit, mass air flow sensors and intake manifolds) and by designing such systems for improved thermal control.  Improved turbocharging and air handling systems would likely include higher efficiency EGR systems and intercoolers that reduce frictional pressure loss while maximizing the ability to thermally control induction air and EGR.  EGR systems that often rely upon an adverse pressure gradient (exhaust manifold pressures greater than intake manifold pressures) must be reconsidered and their adverse pressure gradients minimized.  Other components that offer opportunities for improved flow efficiency include cylinder heads, ports and exhaust manifolds to further reduce pumping losses by about 1 percent.  
Engine Downsizing
Proper sizing of an engine is an important component of optimizing a vehicle for best fuel consumption.  This Phase 2 rule would improve overall vehicle efficiency, which would result in a drop in the vehicle power demand for most operation.  This drop moves the vehicle operating points down to a lower load zone, which can move the engine away from the sweet spot.  Engine downsizing combined with engine down speeding can allow the engine to move back to higher loads and lower speed zone, thus achieving slightly better fuel economy in the real world.  However, because of the way engines are tested, little of the benefit of engine downsizing would be detected during engine testing (if power density remains the same) because the engine test cycles are normalized based on the full torque curve.  Thus the current engine test is not the best way to measure the true effectiveness of engine downsizing.  Nevertheless, we project that some small benefit would be measured over the engine test cycles  -  perhaps up to a one-quarter percent improvement in fuel consumption.  Note that a bigger benefit would be observed during GEM simulation, better reflecting real world improvements.  This is factored into the vehicle standards.  Thus, the agencies see no reason to fundamentally revise the engine test procedure at this time.   
Waste Heat Recovery
More than 40 percent of all energy loss in an engine is lost as heat to the exhaust and engine coolant.  For many years, manufacturers have been using turbochargers to convert some of the waste heat in the exhaust into usable mechanical power than is used to compress the intake air.  Manufacturers have also been working to use a Rankine cycle-based system to extract additional heat energy from the engine.  Such systems are often called waste heat recovery (WHR) systems.  The possible sources of energy include the exhaust, recirculated exhaust gases, compressed charge air, and engine coolant.  The basic approach with WHR is to use waste heat from one or more of these sources to evaporate a working fluid, which is passed through a turbine or equivalent expander to create mechanical or electrical power, then re-condensed.
Prior to the Phase 1 Final Rule, the NAS estimated the potential for WHR to reduce fuel consumption by up to 10 percent.  However, the agencies do not believe such levels would be achievable within the Phase 2 time frame.  There currently are no commercially available WHR systems for diesel engines, although research prototype systems are being tested by some manufacturers.  The agencies believe it is likely a commercially-viable WHR capable of reducing fuel consumption by over three percent would be available in the 2021 to 2024 time frame.  Cost and complexity may remain high enough to limit the use of such systems in this time frame.  Moreover, packaging constraints and transient response challenges would limit the application of WHR systems to line-haul tractors.  Refer to RIA Chapter 2 for a detailed description of these systems and their applicability.  The agencies project that WHR recovery could be used on 1 percent of all tractor engines by 2021, on 5 percent by 2024, and 15 percent by 2027. 
The net cost and effectiveness of future WHR systems would depend on the sources of waste heat.  Systems that extract heat from EGR gases may provide the side benefit of reducing the size of EGR coolers or eliminating them altogether.  To the extent that WHR systems use exhaust heat, they would increase the overall cooling system heat rejection requirement and likely require larger radiators.  This could have negative impacts on cooling fan power needs and vehicle aerodynamics.  Limited engine compartment space under hood could leave insufficient room for additional radiator size increasing.  On the other hand, WHR systems that extract heat from the engine coolant, could actually improve overall cooling.
Technology Packages for Diesel Engines Installed in Tractors
Typical technology packaged for diesel engines installed in tractors basically includes most technologies mentioned above, which includes  combustion optimization, turbocharging system, engine friction and other parasitic losses, exhaust aftertreatment, engine breathing system, and engine downsizing.  Depending on the technology maturity of WHR and market demands, a small number of tractors could install waste heat recovery device with Rankine cycle technology.  During the stringency development, the agencies received strong supports from various stakeholders, where they graciously provided many confidential business information (CBI) including both technology reduction potentials and estimated market penetrations. Combining those CBI data with the agencies' engineering judgment, Table II-4 lists those potential technologies together with the agencies' estimated market penetration for tractor engine.   Those reduction values shown as "SET reduction" are relative to Phase 1 engine, which is shown in Table II-6.  It should be pointed out that the stringency in Table II-6  are developed based on the proposed SET reweighting factors l shown in Table II-2.
        Table II-6 Projected Tractor Engine Technologies and Reduction
                                   SET Mode
                     SET weighted reduction (%)  2020-2027
                           Market penetration (2021)
                           Market penetration (2024)
                           Market penetration (2027)
                          Turbo compound with clutch
                                     1.9%
                                      5%
                                      10%
                                      10%
                              WHR (Rankine cycle)
                                     3.3%
                                      1%
                                      5%
                                      15%
            Parasitic/Friction (Cyl Kits,  pumps, FIE), lubrication
                                     1.3%
                                      45%
                                      95%
                                     100%
                           Aftertreatment (lower dP)
                                     0.6%
                                      45%
                                      95%
                                     100%
              EGR/Intake & exhaust manifolds/Turbo /VVT/Ports
                                     1.1%
                                      45%
                                      95%
                                     100%
                             Combustion/FI/Control
                                     1.0%
                                      45%
                                      95%
                                     100%
                                  Downsizing
                                     0.2%
                                      10%
                                      20%
                                      30%
                            Weighted reduction (%)
                                       
                                     1.5%
                                     3.7%
                                     4.2%
Technology Packages for Diesel Engines Installed in Vocational Vehicles
For compression-ignition engines fitted into vocational vehicles, the agencies are proposing MY 2021 standards that would require engine manufacturers to achieve, on average, a 2.0 percent reduction in fuel consumption and CO2 emissions beyond the baseline that is the Phase 1 standard.  Beginning in MY 2024, the agencies are proposing engine standards that would require diesel engine manufacturers to achieve, on average, a 3.5 percent reduction in fuel consumption and CO2 emissions beyond the Phase 1 baseline standards for all diesel engines including LHD, MHD, and HHD.  The agencies are proposing these standards based on the performance of reduced parasitics and friction, improved aftertreatment, combustion optimization,  superchargers with VGT and bypass, model-based controls, improved EGR cooling/transport, and variable valve timing (only in LHD and MHD engines).  The percent reduction for the MY2021, MY2024, and MY2027 standards is based on the combination of technology effectiveness and market adoption rate projected.
Most of the potential engine related technologies discussed previously can be applied here.  However, neither the waste heat technologies with the Rankine cycle concept nor turbo-compound would be applied into vocational sector due to the inefficient use of waste heat energy with duty cycles and applications with more transient operation than highway operation.  Given the projected cost and complexity of such systems, we believe that for the Phase 2 time frame manufacturers will focus their development work on tractor applications (which would have better payback for operators) rather than vocational applications. In addition, the benefits due to engine downsizing, which can be seen in tractor engines, may not be clearly seen in vocational sector, again because this control technology produces few benefits in transient operation.   
One of the most effective technologies for vocational engines is the optimization of transient control.  It would be expected that more advanced transient control including different levels of model based control and neural network control package could provide substantial benefits in vocational engines due to the extensive transient operation of these vehicles.  For this technology, the use of the FTP cycle would drive engine manufacturers to invest more in transient control to improve engine efficiency.  Other effective technologies would be parasitic/friction reduction, as well as improvements to combustion, air handling systems, turbochargers, and aftertreatment systems.  Table II-7 below lists those potential technologies together with the agencies' projected market penetration for vocational engines.  Again, similar to tractor engine, the technology reduction and market penetration are estimated by combining the CBI data together with the agencies' engineering judgment.  Those reduction values shown as "FTP reduction" are relative to a Phase 2 baseline engine, which is shown in Table II-3.  The weighted reductions combine the emission reduction values weighted by the market penetration of each technology). 
       Table II-7 Projected Vocational Engine Technologies and Reduction
                                  Technology
                   GHG Emissions Reduction         2020-2027
                            Market Penetration 2021
                            Market Penetration 2024
                            Market Penetration 2027
                              Model based control
                                     2.0%
                                      25%
                                      30%
                                      40%
                              Parasitic /Friction
                                     1.5%
                                      60%
                                      90%
                                     100%
                              EGR/Air/VVT /Turbo
                                     1.0%
                                      50%
                                      90%
                                     100%
                                  Improved AT
                                     0.5%
                                      50%
                                      90%
                                     100%
                            Combustion Optimization
                                     1.0%
                                      50%
                                      90%
                                     100%
                        Weighted reduction (%)-L/M/HHD
                                       
                                     2.0%
                                     3.5%
                                     4.0%
Summary of the Agencies' Analysis of the Feasibility of the Proposed Diesel Engine Standards
The proposed HD Phase 2 standards are based on adoption rates for technologies that the agencies regard, subject to consideration of public comment, as the maximum feasible for purposes of EISA Section 32902 (k) and appropriate under CAA Section 202 (a) for the reasons given above.  The agencies believe these technologies can be adopted at the estimated rates for these standards within the lead time provided, as discussed in draft RIA Chapter 2.  The 2021 and 2024 MY standards are phase-in standards on the path to the 2027 MY standards and were developed using less aggressive application rates and therefore have lower technology package costs than the 2027 MY standards.  
As described in Section II. D. (2) (d) below, the cost of the proposed standards is estimated to range from $270 to $1,698 per engine.  This is slightly higher than the costs for Phase 1, which were estimated to be $234 to $1,091 per engine.  Although the agencies did not separately determine fuel savings or emission reductions due to the engine standards apart from the vehicle program, it is expected that the fuel savings would be significantly larger than these costs, and the emission reductions would be roughly proportional to the technology costs when compared to the corresponding vehicle program reductions and costs.  Thus, we regard these standards as cost-effective.  This is true even without considering payback period.  The proposed phase-in 2021 and 2024 MY standards are less stringent and less costly than the proposed 2027 MY standards.  Given that the agencies believe the proposed standards are technically feasible, are highly cost effective, and highly cost effective when accounting for the fuel savings, and have no apparent adverse potential impacts (e.g., there are no projected negative impacts on safety or vehicle utility), the proposed standards appear to represent a reasonable choice under Section 202(a) of the CAA and the maximum feasible under NHTSA's EISA authority at 49 U.S.C. 32902(k)(2).  
    Basis for Continuing the Phase 1 Spark-Ignited Engine Standard
Today most SI-powered vocational vehicles are sold as incomplete vehicles by a vertically integrated chassis manufacturer, where the incomplete chassis shares most of the same technology as equivalent complete pickups or vans, including the powertrain.  The number of such incomplete SI-powered vehicles is small compared to the number of completes.  Another, even less common way that SI-powered vocational vehicles are built is by a non-integrated chassis manufacturer purchasing an engine from a company that also produces complete and/or incomplete HD pickup trucks and vans.  The resulting market structure leads manufacturers of heavy-duty SI engines to have little market incentive to develop separate technology for vocational engines that are engine-certified.  Moreover, the agencies have not identified a single SI engine technology that we believe belongs on engine-certified vocational engines that we do not also project to be used on complete heavy-duty pickups and vans.
In light of this market structure, when the agencies considered the feasibility of more stringent Phase 2 standards for SI vocational engines, we identified the following key questions:
         1. Will there be technologies available that could reduce in-use emissions from vocational SI engines?
         2. Would these technologies be applied to complete vehicles and carried-over to engine certified engines without a new standard?
         3. Would these technologies be applied to meet the vehicle-based standards described in Section V?
         4. What are the drawbacks associated with setting a technology-forcing Phase 2 standard for SI engines?
With respect to the first and second questions, as noted in Chapter 2.6 of the draft RIA, the agencies have identified improved lubricants, friction reduction, and cylinder deactivation as technologies that could potentially reduce in-use emissions from vocational engines; and the agencies have further determined that to the extent these technologies would be viable for complete vehicles, they would also be applied to engine-certified engines.  Nevertheless, significant uncertainty remains about how much benefit would be provided by these technologies.  It is possible that the combined impact of these technologies would be one percent or less.  With respect to the third question, we believe that to the extent these technologies are viable and effective, they would be applied to meet the vehicle-based standards for vocational vehicles.
At this time, it appears the fourth question regarding drawbacks is the most important.  The agencies could propose a technology forcing standard for vocational SI engines based on a projection of each of these technologies being effective for these engines.   However, as already noted in Section I, the agencies see value in setting the standards at levels that would not require every projected technology to work as projected.  Effectively requiring technologies to match our current projections would create the risk that the standards would not be feasible if even a single one of technologies failed to match our projections.  This risk is amplified for SI engines because of the very limited product offerings, which provide far fewer opportunities for averaging than exist for CI engines.  Given the relatively small improvement projected, and the likelihood that most or all of this improvement would result anyway from the complete pickup and van standards and the vocational vehicle-based standard, we do not believe such risk is justified.  Nevertheless, we request comment on adopting more a stringent standard in the 2024 to 2027 time frame that would be 1-2 percent lower than the Phase 1 standard. 
    Engine Improvements Projected for Vehicles over the GEM Duty Cycles
Because we are proposing that tractor and vocational vehicle manufacturers represent their vehicles' actual engines in GEM for vehicle certification, the agencies aligned our engine technology effectiveness assessments for both the separate engine standards and the tractor and vocational vehicle standards for each of the regulatory alternatives considered.  This was an important step because we are proposing to recognize the same engine technologies in both the separate engine standards and the vehicle standards, which each have different test procedures for demonstrating compliance.  As explained earlier in Section II. D. (1) , compliance with the tractor separate engine standards is determined from a composite of the Supplemental Engine Test (SET) procedure's 13 steady-state operating points.  Compliance with the vocational vehicle separate engine standards is determined over the Federal Test Procedure's (FTP) transient engine duty cycle.  In contrast, compliance with the vehicle standards is determined using GEM, which calculates composite results over a combination of 55 mph and 65 mph steady-state vehicle cycles and the ARB Transient vehicle cycle.  Note that we are also proposing a new workday idle cycle for vocational vehicles.  Each of these duty cycles emphasizes different engine operating points; therefore, they can each recognize certain technologies differently.
Our first step in aligning our engine technology assessment at both the engine and vehicle levels was to start with an analysis of how we project each technology to impact performance at each of the 13 individual test points of the SET steady-state engine duty cycle.  For example, engine friction reduction technology would be expected to have the greatest impact at the highest engine speeds, where frictional energy losses are the greatest.  As another example, turbocharger technology is generally optimized for best efficiency at steady-state cruise vehicle speed.  For an engine this is near its lower peak-torque speed and at a moderately high load that still offers sufficient torque reserve to climb modest road grades without frequent transmission gear shifting.  The agencies also considered the combination of certain technologies causing synergies and dis-synergies with respect to engine efficiency at each of these test points.  See RIA Chapter 2 for further details.
Next we estimated unique brake-specific fuel consumption values for each of the 13 SET test points for two hypothetical MY2018 tractor engines that would be compliant with the Phase 1 standards.  These were a 15 liter displacement 455 horsepower engine and an 11 liter 350 horsepower engine.  We then added technologies to these engines that we determined were feasible for MY2021, MY2024, and MY 2027, and we determined unique improvements at each of the 13 SET points.  We then calculated composite SET values for these hypothetical engines and determined the SET improvements that we could use to propose more stringent separate tractor engine standards for MY2021, MY2024, and MY 2027.
To align our engine technology analysis for vehicles to the SET engine analysis described above, we then fit a surface equation through each engine's SET points versus engine speed and load to approximate their analogous fuel maps that would represent these same engines in GEM.  Because the 13 SET test points do not fully cover an engine's wide range of possible operation, we also determined improvements for an additional 6 points of engine operation to improve the creation of GEM fuel maps for these engines.  Then for each of these 8 tractor engines (two each for MY2018, MY2021, MY2024, and MY2027) we ran GEM simulations to represent low-, mid-, and high-roof sleeper cabs and low-, mid-, and high-roof day cabs.  Class 8 tractors were assumed for the 455 horsepower engine and Class 7 tractors (day cabs only) were assumed for the 350 horsepower engine. Each GEM simulation calculated results for the 55 mph, 65 mph, and ARB Transient cycles, as well as the composite GEM value associated with each of the tractor types.  After factoring in our Alternative 3 projected market penetrations of the engine technologies, we then compared the percent improvements that the same sets of engine technology caused over the separate engines' SET composites and the various vehicles' GEM composites.  Compared to their respective MY2018 baseline engines, the two engines of different horsepower showed the same percent improvements.  All of the tractor cab types showed nearly the same relative improvements too.  For example, for the MY2021 Alternative 3 engine technology package in a high roof sleeper tractor, the SET engine composites showed a 1.5 percent improvement and the GEM composites a 1.6 percent improvement.  For the MY2024 Alternative 3 engine technology packages, the SET engine composites showed a 3.7 percent improvement and the GEM composites a 3.7 percent improvement.  For MY2027 Alternative 3 engine technology packages, the SET engine composites showed a 4.2 percent improvement and the GEM composites a 4.2 percent improvement.  We therefore concluded that tractor engine technologies will improve engines and tractors proportionally, even though the separate engine and vehicle certification test procedures have different duty cycles.
We then repeated this same process for the FTP engine transient cycle and the GEM vocational vehicle types.  For the vocational engine analysis we investigated four engines: 15 liter displacement engine at 455 horsepower rating, 11 liter displacement engine at 345 horsepower rating, a 7 liter displacement engine at a 200 horsepower rating and a 270 horsepower rating.  These engines were then used in GEM over the light-heavy, medium-heavy, and heavy-heavy vocational vehicle configurations.  Because the technologies were assumed to impact each point of the FTP in the same way, the results for all engines and vehicles were 2.0 percent improvement in MY2021, 3.5 percent improvement in MY2024, and 4.0 percent improvement in MY2027.  Therefore, we arrived at the same conclusion that vocational vehicle engine technologies are recognized at the same percent improvement over the FTP as the GEM cycles.  We request comment on our approach to arrive at this conclusion.
    Engine Technology Package Costs for Tractor and Vocational Engines (and Vehicles)
As described in Chapters 2 and 7 of the draft RIA, the agencies estimated costs for each of the engines technologies discussed here.  All costs are presented relative to engines projected to comply with the model year 2017 standards  -  i.e., relative to our baseline engines.  Note that we are not presenting any costs for gasoline engines (SI engines) because we are not proposing to change the standards.
Our engine cost estimates include a separate analysis of the incremental part costs, research and development activities, and additional equipment.  Our general approach used elsewhere in this action (for HD pickup trucks, gasoline engines, Class 7 and 8 tractors, and Class 2b-8 vocational vehicles) estimates a direct manufacturing cost for a part and marks it up based on a factor to account for indirect costs.  See also 75 FR 25376.  We believe that approach is appropriate when compliance with proposed standards is achieved generally by installing new parts and systems purchased from a supplier.  In such a case, the supplier is conducting the bulk of the research and development on the new parts and systems and including those costs in the purchase price paid by the original equipment manufacturer.  The indirect costs incurred by the original equipment manufacturer need not include much cost to cover research and development since the bulk of that effort is already done.  For the MHD and HHD diesel engine segment, however, the agencies believe that OEMs will incur costs not associated with the purchase of parts or systems from suppliers or even the production of the parts and systems, but rather the development of the new technology by the original equipment manufacturer itself.  Therefore, the agencies have directly estimated additional indirect costs to account for these development costs.  The agencies used the same approach in the Phase 1 HD rule. EPA commonly uses this approach in cases where significant investments in research and development can lead to an emission control approach that requires no new hardware.  For example, combustion optimization may significantly reduce emissions and cost a manufacturer millions of dollars to develop but would lead to an engine that is no more expensive to produce.  Using a bill of materials approach would suggest that the cost of the emissions control was zero reflecting no new hardware and ignoring the millions of dollars spent to develop the improved combustion system.  Details of the cost analysis are included in the draft RIA Chapter 2.  To reiterate, we have used this different approach because the MHD and HHD diesel engines are expected to comply in part via technology changes that are not reflected in new hardware but rather reflect knowledge gained through laboratory and real world testing that allows for improvements in control system calibrations  -  changes that are more difficult to reflect through direct costs with indirect cost multipliers.  Note that these engines are also expected to incur new hardware costs as shown in Table II-8  through Table II-11. EPA also developed the incremental piece cost for the components to meet each of the 2021 and 2024 standards.  The costs shown in Table II-12 include a low complexity ICM of 1.15 and assume the flat-portion of the learning curve is applicable to each technology.

Tractor Engine Package Costs
Table II-8 Proposed MY2021 Tractor Diesel Engine Component Costs Inclusive of Indirect Cost Markups and Adoption Rates (2012$)

                                   Medium HD
                                   Heavy HD
Aftertreatment system (improved effectiveness SCR, dosing, DPF)
                                                                             $7
                                                                             $7
Valve Actuation
                                                                            $82
                                                                            $82
Cylinder Head (flow optimized, increased firing pressure, improved thermal management)
                                                                             $3
                                                                             $3
Turbocharger (improved efficiency)
                                                                             $9
                                                                             $9
Turbo Compounding
                                                                            $50
                                                                            $50
EGR Cooler (improved efficiency)
                                                                             $2
                                                                             $2
Water Pump (optimized, variable vane, variable speed)
                                                                            $43
                                                                            $43
Oil Pump (optimized)
                                                                             $2
                                                                             $2
Fuel Pump (higher working pressure, increased efficiency, improved pressure regulation)
                                                                             $2
                                                                             $2
Fuel Rail (higher working pressure)
                                                                             $5
                                                                             $5
Fuel Injector (optimized, improved multiple event control, higher working pressure)
                                                                             $5
                                                                             $5
Piston (reduced friction skirt, ring and pin)
                                                                             $1
                                                                             $1
Valve Train (reduced friction, roller tappet)
                                                                            $39
                                                                            $39
Waste Heat Recovery
                                                                           $105
                                                                           $105
"Right sized" engine
                                                                           -$40
                                                                           -$40
Total
                                                                           $314
                                                                           $314
         Note: "Right sized" diesel engine is a smaller, less costly engine than the engine it replaces.
Table II-9 Proposed MY2024 Tractor Diesel Engine Component Costs Inclusive of Indirect Cost Markups and Adoption Rates (2012$)

                                   Medium HD
                                   Heavy HD
Aftertreatment system (improved effectiveness SCR, dosing, DPF)
                                                                            $14
                                                                            $14
Valve Actuation
                                                                           $166
                                                                           $166
Cylinder Head (flow optimized, increased firing pressure, improved thermal management)
                                                                             $6
                                                                             $6
Turbocharger (improved efficiency)
                                                                            $17
                                                                            $17
Turbo Compounding
                                                                            $92
                                                                            $92
EGR Cooler (improved efficiency)
                                                                             $3
                                                                             $3
Water Pump (optimized, variable vane, variable speed)
                                                                            $84
                                                                            $84
Oil Pump (optimized)
                                                                             $4
                                                                             $4
Fuel Pump (higher working pressure, increased efficiency, improved pressure regulation)
                                                                             $4
                                                                             $4
Fuel Rail (higher working pressure)
                                                                             $9
                                                                             $9
Fuel Injector (optimized, improved multiple event control, higher working pressure)
                                                                            $10
                                                                            $10
Piston (reduced friction skirt, ring and pin)
                                                                             $3
                                                                             $3
Valve Train (reduced friction, roller tappet)
                                                                            $75
                                                                            $75
Waste Heat Recovery
                                                                           $502
                                                                           $502
"Right sized" engine
                                                                           -$85
                                                                           -$85
Total
                                                                           $904
                                                                           $904
         Note: "Right sized" diesel engine is a smaller, less costly engine than the engine it replaces.

Table II-10 Proposed MY2027 Tractor Diesel Engine Component Costs Inclusive of Indirect Cost Markups and Adoption Rates (2012$)

                                   Medium HD
                                   Heavy HD
Aftertreatment system (improved effectiveness SCR, dosing, DPF)
                                                                            $14
                                                                            $14
Valve Actuation
                                                                           $169
                                                                           $169
Cylinder Head (flow optimized, increased firing pressure, improved thermal management)
                                                                             $6
                                                                             $6
Turbocharger (improved efficiency)
                                                                            $17
                                                                            $17
Turbo Compounding
                                                                            $87
                                                                            $87
EGR Cooler (improved efficiency)
                                                                             $3
                                                                             $3
Water Pump (optimized, variable vane, variable speed)
                                                                            $84
                                                                            $84
Oil Pump (optimized)
                                                                             $4
                                                                             $4
Fuel Pump (higher working pressure, increased efficiency, improved pressure regulation)
                                                                             $4
                                                                             $4
Fuel Rail (higher working pressure)
                                                                             $9
                                                                             $9
Fuel Injector (optimized, improved multiple event control, higher working pressure)
                                                                            $10
                                                                            $10
Piston (reduced friction skirt, ring and pin)
                                                                             $3
                                                                             $3
Valve Train (reduced friction, roller tappet)
                                                                            $75
                                                                            $75
Waste Heat Recovery
                                                                         $1,340
                                                                         $1,340
"Right sized" engine
                                                                          -$127
                                                                          -$127
Total
                                                                         $1,698
                                                                         $1,698
         Note: "Right sized" diesel engine is a smaller, less costly engine than the engine it replaces.

Vocational Diesel Engine Package Costs
Table II-11 Proposed MY2021 Vocational Diesel Engine Component Costs Inclusive of Indirect Cost Markups and Adoption Rates (2012$)

                                   Light HD
                                   Medium HD
                                   Heavy HD
Aftertreatment system (improved effectiveness SCR, dosing, DPF)
                                                                             $8
                                                                             $8
                                                                             $8
Valve Actuation
                                                                            $91
                                                                            $91
                                                                            $91
Cylinder Head (flow optimized, increased firing pressure, improved thermal management)
                                                                             $6
                                                                             $3
                                                                             $3
Turbocharger (improved efficiency)
                                                                            $10
                                                                            $10
                                                                            $10
EGR Cooler (improved efficiency)
                                                                             $2
                                                                             $2
                                                                             $2
Water Pump (optimized, variable vane, variable speed)
                                                                            $57
                                                                            $57
                                                                            $57
Oil Pump (optimized)
                                                                             $3
                                                                             $3
                                                                             $3
Fuel Pump (higher working pressure, increased efficiency, improved pressure regulation)
                                                                             $3
                                                                             $3
                                                                             $3
Fuel Rail (higher working pressure)
                                                                             $7
                                                                             $6
                                                                             $6
Fuel Injector (optimized, improved multiple event control, higher working pressure)
                                                                             $8
                                                                             $6
                                                                             $6
Piston (reduced friction skirt, ring and pin)
                                                                             $1
                                                                             $1
                                                                             $1
Valve Train (reduced friction, roller tappet)
                                                                            $69
                                                                            $52
                                                                            $52
Model Based Controls
                                                                            $28
                                                                            $28
                                                                            $28
Total
                                                                           $293
                                                                           $270
                                                                           $270

Table II-12 Proposed MY2024 Vocational Diesel Engine Component Costs Inclusive of Indirect Cost Markups and Adoption Rates (2012$)

                                   Light HD
                                   Medium HD
                                   Heavy HD
Aftertreatment system (improved effectiveness SCR, dosing, DPF)
                                                                            $13
                                                                            $13
                                                                            $13
Valve Actuation
                                                                           $157
                                                                           $157
                                                                           $157
Cylinder Head (flow optimized, increased firing pressure, improved thermal management)
                                                                            $10
                                                                             $6
                                                                             $6
Turbocharger (improved efficiency)
                                                                            $16
                                                                            $16
                                                                            $16
EGR Cooler (improved efficiency)
                                                                             $3
                                                                             $3
                                                                             $3
Water Pump (optimized, variable vane, variable speed)
                                                                            $79
                                                                            $79
                                                                            $79
Oil Pump (optimized)
                                                                             $4
                                                                             $4
                                                                             $4
Fuel Pump (higher working pressure, increased efficiency, improved pressure regulation)
                                                                             $4
                                                                             $4
                                                                             $4
Fuel Rail (higher working pressure)
                                                                            $10
                                                                             $9
                                                                             $9
Fuel Injector (optimized, improved multiple event control, higher working pressure)
                                                                            $13
                                                                            $10
                                                                            $10
Piston (reduced friction skirt, ring and pin)
                                                                             $2
                                                                             $2
                                                                             $2
Valve Train (reduced friction, roller tappet)
                                                                            $95
                                                                            $71
                                                                            $71
Model Based Controls
                                                                            $31
                                                                            $31
                                                                            $31
Total
                                                                           $437
                                                                           $405
                                                                           $405
    

Table II-13 Proposed MY2027 Vocational Diesel Engine Component Costs Inclusive of Indirect Cost Markups and Adoption Rates (2012$)

                                   Light HD
                                   Medium HD
                                   Heavy HD
Aftertreatment system (improved effectiveness SCR, dosing, DPF)
                                                                            $14
                                                                            $14
                                                                            $14
Valve Actuation
                                                                           $169
                                                                           $169
                                                                           $169
Cylinder Head (flow optimized, increased firing pressure, improved thermal management)
                                                                            $10
                                                                             $6
                                                                             $6
Turbocharger (improved efficiency)
                                                                            $17
                                                                            $17
                                                                            $17
EGR Cooler (improved efficiency)
                                                                             $3
                                                                             $3
                                                                             $3
Water Pump (optimized, variable vane, variable speed)
                                                                            $84
                                                                            $84
                                                                            $84
Oil Pump (optimized)
                                                                             $4
                                                                             $4
                                                                             $4
Fuel Pump (higher working pressure, increased efficiency, improved pressure regulation)
                                                                             $4
                                                                             $4
                                                                             $4
Fuel Rail (higher working pressure)
                                                                            $11
                                                                             $9
                                                                             $9
Fuel Injector (optimized, improved multiple event control, higher working pressure)
                                                                            $13
                                                                            $10
                                                                            $10
Piston (reduced friction skirt, ring and pin)
                                                                             $3
                                                                             $3
                                                                             $3
Valve Train (reduced friction, roller tappet)
                                                                           $100
                                                                            $75
                                                                            $75
Model Based Controls
                                                                            $39
                                                                            $39
                                                                            $39
Total
                                                                           $471
                                                                           $437
                                                                           $437

    Feasibility of Phasing In the CO2 and Fuel Consumption Standards Sooner
The agencies are requesting comment on accelerated standards for diesel engines that would achieve the same reductions as the proposed standards, but with less lead time.  Table II-14 and Table II-15 below show a technology path that the agencies project could be used to achieve the reductions that would be required within the lead time allowed by the alternative standards.  As discussed in Sections I and X, the agencies are proposing to fully phase in these standards through 2027.  The agencies believe that standards that fully phase in through 2024 have the potential to be the maximum feasible and appropriate option. However, based on the evidence currently before the agencies, we have outstanding questions regarding relative risks and benefits of that option in the timeframe envisioned.   Commenters are encouraged to address how technologies could develop if a shorter lead time is selected.  In particular, we request comment on the likelihood that WHR systems would be available for tractor engines in this time frame, and that WHR systems would achieve the projected level of reduction and the necessary reliability.  We also request comment on whether it would be possible to apply the model based controls described in Section II. D. (2) (a)(i) to this many vocational engines in this time frame.
Table II-14 Projected Tractor Engine Technologies and Reduction for Alternative 4 Standards
            %-Improvements beyond Phase 1, 2018 engine as baseline
                               SET reduction (%)
                          Market penetration MY 2021
                          Market penetration MY 2024
                                Turbo compound 
                                     1.82%
                                      5%
                                      10%
                              WHR (Rankine cycle)
                                     3.58%
                                      4%
                                      15%
           Parasitics/Friction (Cyl Kits,  pumps, FIE), lubrication
                                     1.41%
                                      60%
                                     100%
                                Aftertreatment 
                                     0.61%
                                      60%
                                     100%
                 Exh Manifold
Turbo Efficiency
EGR Cooler
VVT
                                     1.14%
                                      60%
                                     100%
                             Combustion/FI/Control
                                     1.11%
                                      60%
                                     100%
                                  Downsizing
                                     0.29%
                                      20%
                                      30%
                      Market Penetration Weighted Package
                                     2.1%
                                     4.2%


Table II-15 Projected Vocational Engine Technologies and Reduction for More Stringent Alternative Standards
            %-Improvements beyond Phase 1, 2018 engine as baseline
                                FTP  reduction
                          Market Penetration MY 2021
                          Market Penetration MY 2024
                              Model based control
                                      2%
                                      30%
                                      40%
                             Parasitics /Friction
                                     1.5%
                                      70%
                                     100%
                              EGR/Air/VVT /Turbo
                                      1%
                                      70%
                                     100%
                                  Improved AT
                                     0.5%
                                      70%
                                     100%
                            Combustion Optimization
                                      1%
                                      70%
                                     100%
Weighted reduction (%)- L/MHD/HHD
                                       
                                     2.5%
                                     4.0%

The projected HDD engine package costs for both tractors and vocational engines in MYs 2021 and 2024 under Alternative 4 are shown in Table II-16. Note that, while the technology application rates in MY2024 under Alternative 4 are essentially identical to those for MY2027 under the proposal, the costs are about 5 to 11 percent higher under Alternative 4 due to learning effects and markup changes that are estimated to have occurred by MY2027 under Alternative 3.  Note also that the agencies did not include any additional costs for accelerating technology development or to address potential in-use durability issues.  We request comment on whether such costs would occur if we finalized this alternative.  We also request comment on what steps could be taken to mitigate such costs.  
Table II-16 Expected Package Costs for HD Diesel Engines under Alternative 4 (2012$)[a]
                                  Model Year
                                 MHDD Tractor
                                 HHDD Tractor
                                LHDD Vocational
                                MHDD Vocational
                                HHDD Vocational
                                     2021
                                                                           $656
                                                                           $656
                                                                           $372
                                                                           $345
                                                                           $345
                                     2024
                                                                         $1,885
                                                                         $1,885
                                                                           $493
                                                                           $457
                                                                           $457
                [a] Costs presented here include application rates.

The agencies' analysis shows that, in the absence of additional costs for accelerating technology development or to address potential in-use durability issues, the costs associated with Alternative 4 would be very similar to those we project for the proposed standards.  Alternative 4 would also have similar payback times and cost-effectiveness.  In other words, Alternative 4 would achieve some additional reductions for model years 2021 through 2026, with roughly proportional additional costs unless there were additional costs for accelerating development or for in-use durability issues.  (Note that reductions and costs for MY 2027 and later would be equivalent for the Alternative 4 and the proposed standards).  Thus, our assessment of the feasibility of this alternative is dependent on three questions:
         * Could manufacturers meet these standards with three years less lead time?
         * What additional expenses would be incurred to meet these standards with less lead time?
         * How reliable would the engines be if the manufacturers had to bring them to the market three years earlier?
     
Proposed EPA Engine Standards for N2O
EPA is proposing to adopt the MY 2021 N2O engine standards that were originally proposed for Phase 1.  The proposed level for Phase 2 would be 0.05 g/hp-hr with a default deterioration factor of 0.01 g/hp-hr, which we believe is technologically feasible because a number of engines meet this level today.  This level of stringency is consistent with the agency's Phase 1 approach to set "cap" standards for N2O.  EPA finalized Phase 1 standards for N2O as engine-based standards at 0.10 g/hp-hr and a 0.02 g/hp-hr default deterioration factor because the agency believes that emissions of this GHG are technologically related solely to the engine, fuel, and emissions aftertreatment systems, and the agency is not aware of any influence of vehicle-based technologies on these emissions.  We continue to believe this approach is appropriate, but we believe that more stringent standards are appropriate to ensure that N2O emissions do not increase in the future.  Note that NHTSA did not adopt standards for N2O because these emissions do not impact fuel consumption in a significant way, and is not proposing such standards for Phase 2 for the same reason.  
We are proposing this change at no additional cost and no additional benefit because manufacturers are generally meeting the proposed standard today.  The purpose of this standard is to prevent increases in N2O emissions absent this proposed increase in stringency.  We request comment on whether or not we should be considering additional costs for compliance.  Similarly, we request comment on whether or not we should assume N2O increases in our "No Action" regulatory Alternatives 1a and 1b described in Section X.
Although N2O is emitted in very small amounts, it can have a very significant impact on the climate.  The global warming potential (GWP) of one molecule of N2O is 298 times that of one molecule CO2.  Because N2O and CO2 coincidentally have the same molar mass, this means that one gram of N2O would have the same impact on the climate as 298 grams of CO2.  To further put this into perspective, the difference between the proposed N2O standard (and deterioration factor) and the current Phase 1 standard is 0.40 g/hp-hr of N2O emissions.  This is equivalent to 11.92 g/hp-hr CO2. Over the same certification test cycle (i.e. EPA's HD FTP) the Phase 1 engine CO2 emissions standard ranges from 460 to 576 g/hp-hr, depending on the service class of the engine.  Therefore, absent today's proposed action, engine N2O increases equivalent to 2.1 to 2.6 percent of the Phase 1 CO2 standard could occur.  
We are proposing this lower cap because we have determined that manufacturers generally are meeting this level today but in the future could increase N2O emissions up to the current Phase 1 cap standard.  Because we do not believe any manufacturer would need to do anything more than recalibrate their SCR systems to comply, the lead time being provided would be sufficient.  This section later describes why manufacturers may increase N2O emissions from SCR-equipped compression-ignition engines in the absence of a lower N2O cap standard.  We request comment on this.  We also note that, as described in Section XI, EPA does not believe there is a similar opportunity to lower the pickup and van N2O standard because it was set at a more stringent level in Phase 1. 
    N2O Formation
N2O formation in modern diesel engines is a by-product of the SCR process.  It is dependent on the SCR catalyst type, the NO2 to NOx ratio, the level of NOx reduction required, and the concentration of the reactants in the system (NH3 to NOx ratio).
Two current engine/aftertreatment designs are driving N2O emission higher.  The first is an increase in engine out NOx, which puts a higher NOx reduction burden on the SCR NOx emission control system.  The second is an increase in NO2 formation from the diesel oxidation catalyst (DOC) located upstream of the passive catalyzed diesel particulate filter (CDPF).  This increase in NO2 serves two functions: improving passive CDPF regeneration and optimization of faster SCR reaction. 
There are multiple mechanisms through which N2O can form in an SCR system:
   1. Low temperature formation of N2O over the DOC prior to the SCR catalyst.
   2. Low temperature formation of NH4NO3 with subsequent decomposition as exhaust temperatures increase, leading to conversion to N2O over the SCR catalyst.
   3. Formation of N2O from NO2 over the SCR catalyst at NO2 to NO ratios greater than 1:1.  N2O formation increases significantly at 300 to 350 °C.
   4. Formation of N2O from NH3 via partial oxidation over the ammonia slip catalyst.
   5. High-temperature N2O formation over the SCR catalyst due to NH3 oxidation facilitated by high SCR catalyst surface coverage of NH3.
Thus, as discussed below, control of N2O formation requires precise optimization of SCR controls including thermal management and dosing rates, as well as catalyst composition.
    N2O Emission Reduction
Through on-engine and reactor bench experiments, this same work showed that the key to reducing N2O emissions lies in intelligent emission control system design and operation, namely:
   1. Selecting the appropriate DOC and/or CDPF catalyst loadings to maintain NO2 to NO ratios at or below 1:1.
   2. Avoiding high catalyst surface coverage of NH3 though urea dosing management when the system is in the ideal N2O formation window.
   3. Utilizing thermal management to push the SCR inlet temperature outside of the N2O low-temperature formation window.
EPA believes that reducing the standard from 0.1 g/hp-hr to 0.05 g/hp-hr is feasible because most engines have emission rates that would meet this standard today and the others could meet it with minor calibration changes at no additional cost.  Numerous studies have shown that diesel engine technologies can be fine-tuned to meet the current NOx and proposed N2O standards while still providing passive CDPF regeneration even with earlier generations of SCR systems.  Currently model year 2014 systems have already moved on to newer generation systems in which the combined CDPF and SCR functions have been further optimized.  The result of this is 18 of 24 engines in the EPA 2014 certification database emitting N2O at less than half of the 2014 standard, and thus below the proposed standard.  Given the discussions in the literature, there are still additional calibration steps that can be taken to further reduce N2O emissions for the higher emitters to afford an adequate compliance margin and room to account for deterioration, without having an adverse effect on criteria pollutant emissions.
                                       
Figure II-2  EPA 2014 Certification Database N2O Emission Results for 24 Engines.
It is important to note, however, that there is a trade off when trying to optimize SCR systems to achieve peak NOx reduction efficiencies.  When transitioning from a <93 percent efficient MY 2011 system to a 98 percent efficient system of the future, lowering the N2O cap to 0.05 g/hp-hr would put constraints on the techniques that can be applied to improve efficiency.  If system designers push the NH3 to NOx ratio higher to try and achieve the maximum possible NOx reduction, it could increase N2O emissions.  If EPA were to adopt a very low NOx standard (e.g., 0.02 g/hp-hr) over existing test cycles, some reductions would be needed throughout the hot portion of the cycle (although most of the reductions would have to come from the cold start portion of the test cycle).  Thermal management would need to play a key role, and reducing catalyst light-off time would move the SCR catalyst through the ammonium nitrate formation and decomposition thermal range quicker, thus lowering N2O emissions.  An increase in the NH3 to NOx ratio could also further reduce NOx emissions; however this would also adversely affect NH3 slip and N2O formation.  The inability of NH3 slip catalysts to handle the increased NH3 load and the EPA NH3 slip limit of 10 ppm would guard against this NH3 to NOx ratio increase, and thus subsequent N2O increase.
In summary, EPA believes that engine manufacturers would be able to respond with highly efficient NOx reducing systems that can meet the proposed lower N2O cap of 0.05 g/hp-hr with no additional cost or lead time.  When optimizing SCR systems for better NOx reduction efficiency, that optimization includes lowering the emissions of undesirable side reactions, including those that form N2O.
EPA Engine Standards for Methane
EPA is proposing to apply the Phase 1 methane engine standards to the Phase 2 program.  EPA adopted the cap standards for CH4 (along with N2O standards) as engine-based standards because the agency believes that emissions of this GHG are technologically related solely to the engine, fuel, and emissions aftertreatment systems, and the agency is not aware of any influence of vehicle-based technologies on these emissions.  Note that NHTSA did not adopt standards for CH4 (or N2O) because these emissions do not impact fuel consumption in a significant way, and is not proposing CH4 standards for Phase 2 either.  
EPA continues to believe that manufacturers of most engine technologies will be able to comply with the Phase 1 CH4 standard with no technological improvements.  We note that we are not aware of any new technologies that would allow us to adopt more stringent standards at this time.  We request comment on this.
Compliance Provisions and Flexibilities for Engine Standards
The agencies are proposing to continue most of the Phase 1 compliance provisions and flexibilities for the Phase 2 engine standards.    
    Averaging, Banking, and Trading
The agencies' general approach to averaging is discussed in Section I.  We are not proposing to offer any special credits to engine manufacturers.  Except for early credits and advanced technology credits, the agencies propose to retain all Phase 1 credit flexibilities and limitations to continue for use in the Phase 2 program.
Request for Comment on Changing Global Warming Potential Values in the Credit Program for CH4 and N2O
The Phase 1 rule included a compliance alternative allowing  heavy-duty manufacturers and conversion companies to comply with the respective methane or nitrous oxide standards by means of over-complying with CO2 standards (40 CFR 1036.705(d)).  The heavy-duty rules allow averaging only between vehicles or engines of the same designated type (referred to as an "averaging set" in the rules).  Specifically, the phase 1 heavy-duty rulemaking added a CO2 credits program which allowed heavy-duty manufacturers to average and bank pollutant emissions to comply with the methane and nitrous oxide requirements after adjusting the CO2 emission credits based on the relative GHG equivalents.  To establish the GHG equivalents used by the CO2 credits program, the Phase 1 rule incorporated the IPCC Fourth Assessment Report global warming potential (GWP) values of 25 for CH4 and 298 for N2O, which are assessed over a 100 year lifetime.

Since the Phase 1 rule was finalized, a new IPCC report has been released (the Fifth Assessment Report), with new GWP estimates.  This is prompting us to look again at the relative CO2 equivalency of methane and nitrous oxide and to seek comment on whether the methane and nitrous oxide GWPs used to establish the GHG equivalency value for the CO2 Credit program should be updated to those established by IPCC in its Fifth Assessment Report.  The Fifth Assessment Report provides four 100 year GWPs for methane ranging from 28 to 36 and two 100 year GWPs for nitrous oxide, either 265 or 298.  Therefore, we not only request comment on whether to update the GWP for methane and nitrous oxide to that of the Fifth Assessment Report, but also on which value to use from this report.  
    In-Use Compliance and Useful Life
Consistent with Section 202(a)(1) and 202 (d) of the CAA, for Phase 1, EPA established in-use standards for heavy-duty engines.  Based on our assessment of testing variability and other relevant factors, we established in-use standards by adding a 3 percent adjustment factor to the full useful life emissions and fuel consumption results measured in the EPA certification process to address measurement variability inherent in comparing results among different laboratories and different engines.   See 40 CFR part 1036.  The agencies are not proposing to change this for Phase 2, but request comment on whether this allowance is still necessary.
We note that in Phase 1, we applied these standards to only certain engine configurations in each engine family (often called the parent rating).  We welcome comment on whether the agencies should set Phase 2 CO2 and fuel consumption standards for the other ratings (often called the child ratings) within an engine family.  We are not proposing specific engine standards for child ratings in Phase 2 because we are proposing to include the actual engine's fuel map in the vehicle certification.  We believe this approach appropriately addresses our concern that manufacturers control CO2 emissions and fuel consumption from all in-use engine configurations within an engine family.
We are proposing to continue regulatory allowance in 40 CFR 1036.150(g) that allows engine manufacturers to use assigned deterioration factors (DFs) for most engines without performing their own durability emission tests or engineering analysis.  However, the engines would still be required to meet the standards in actual use without regard to whether the manufacturer used the assigned DFs.  This allowance is being continued as an interim provision and may be discontinued for later phases of standards as more information becomes known.  Manufacturers are allowed to use an assigned additive DF of 0.0 g/bhp-hr for CO2 emissions from any conventional engine (i.e., an engine not including advance or off-cycle technologies).  Upon request, we could allow the assigned DF for CO2 emissions from engines including advance or off-cycle technologies, but only if we determine that it would be consistent with good engineering judgment.  We believe that we have enough information about in-use CO2 emissions from conventional engines to conclude that they will not increase as the engines age.  However, we lack such information about the more advanced technologies.
    Alternate CO2 Standards
In the Phase 1 rulemaking, the agencies proposed provisions to allow certification to alternate CO2 engine standards in model years 2014 through 2016.  This flexibility was intended to address the special case of needed lead time to implement new standards for a previously unregulated pollutant.  Since that special case does not apply for Phase 2, we are not proposing a similar flexibility in this rulemaking.  We also request comment on whether this allowance should be eliminated for Phase 1 engines.
    Proposed Approach to Standards and Compliance Provisions for Natural Gas Engines
EPA is also proposing certain clarifying changes to its rules regarding classification of natural gas engines.  This proposal relates to standards for all emissions, both greenhouse gases and criteria pollutants.  These clarifying changes are intended to reflect the status quo, and therefore should not have any associated costs.
EPA emission standards have always applied differently for gasoline-fueled and diesel-fueled engines.  The regulations in 40 CFR part 86 implement these distinctions by dividing engines into Otto-cycle and Diesel-cycle technologies.  This approach led EPA to categorize natural gas engines according to their design history.  A diesel engine converted to run on natural gas was classified as a diesel-cycle engine; a gasoline engine converted to run on natural gas was classified as an Otto-cycle engine.  
The Phase 1 rule described our plan to transition to a different approach, consistent with our nonroad programs, in which we divide engines into compression-ignition and spark-ignition technologies based only on the operating characteristics of the engines.  However, the Phase 1 rule included a provision allowing us to continue with the historic approach on an interim basis.  
Under the existing EPA regulatory definitions of "compression-ignition" and "spark-ignition", a natural gas engine would generally be considered compression-ignition if it operates with lean air-fuel mixtures and uses a pilot injection of diesel fuel to initiate combustion, and would generally be considered spark-ignition if it operates with stoichiometric air-fuel mixtures and uses a spark plug to initiate combustion.
EPA's basic premise here is that natural gas engines performing similar in-use functions should be subject to similar regulatory requirements.  The compression-ignition emission standards and testing requirements reflect the operating characteristics for the full range of heavy-duty vehicles, including substantial operation in long-haul service characteristic of tractors.  The spark-ignition emission standards and testing requirements do not include some of those provisions related to use in long-haul service or other applications where diesel engines predominate, such as steady-state testing, Not-to-Exceed standards, and extended useful life.  We believe it would be inappropriate to apply the spark-ignition standards and requirements to natural gas engines that would be used in applications mostly served by diesel engines today.  We are therefore proposing to replace the interim provision described above with a differentiated approach to certification of natural gas engines across all of the EPA standards  -  for both GHGs and criteria pollutants.  Under the proposed clarifying amendment, we would require manufacturers to divide all their natural gas engines into primary intended service classes, as we already require for compression-ignition engines, whether or not the engine has features that otherwise could (in theory) result in classification as SI under the current rules.  Any natural gas engine qualifying as a medium heavy-duty engine (19,500 to 33,000 pounds GVWR) or a heavy heavy-duty engine (over 33,000 pounds GVWR) would be subject to all the emission standards and other requirements that apply to compression-ignition engines.  
Table II-17 describes the provisions that would apply differently for compression-ignition and spark-ignition engines:
Table II-17 Regulatory Provisions that are Different 
              for Compression-Ignition and Spark-Ignition Engines
                                   Provision
                             Compression-Ignition
                                Spark-Ignition
Transient duty cycle
40 CFR part 86, Appendix I, paragraph (f)(2) cycle; divide by 1.12 to de-normalize
40 CFR part 86, Appendix I, paragraph (f)(1) cycle
Ramped-modal test (SET)
yes
no
NTE standards
yes
no
Smoke standard
yes 
no
Manufacturer-run in-use testing
yes
no
ABT  -  pollutants
NOx, PM
NOx, NMHC
ABT --  transient conversion factor
6.5
6.3
ABT  -  averaging set
Separate averaging sets for light, medium, and heavy HDDE
One averaging set for all SI engines
Useful life
110,000 miles for light HDDE
185,000 miles for medium HDDE
435,000 miles for heavy HDDE
110,000 miles
Warranty
50,000 miles for light HDDE
100,000 miles for medium HDDE
100,000 miles for heavy HDDE
50,000 miles
Detailed AECD description
yes
no
Test engine selection
highest injected fuel volume
most likely to exceed emission standards
The onboard diagnostic requirements already differentiate requirements by fuel type, so there is no need for those provisions to change based on the considerations of this section.
We are not aware of any currently certified engines that would change from compression-ignition to spark-ignition under the proposed clarified approach.  Nonetheless, because these proposed standards implicate rules for criteria pollutants (as well as GHGs), the provisions of CAA section 202 (a)(3) (C) apply (for the criteria pollutants), notably the requirement of four years lead time.  We are therefore proposing to continue to apply the existing interim provision through model year 2020.   Starting in model year 2021, all the provisions would apply as described above.  Manufacturers would not be permitted to certify any engine families using carryover emission data if a particular engine model switched from compression-ignition to spark-ignition, or vice versa.  However, as noted above, in practice these vehicles are already being certified as CI engines, so we view these changes as clarifications ratifying the current status quo.
We are also proposing that these provisions would apply equally to engines fueled by any fuel other than gasoline or ethanol, should such engines be produced in the future.  Given the current and historic market for vehicles above 19,500 pounds GVWR, EPA believes any alternative-fueled vehicles in this weight range would be competing primarily with diesel vehicles and should be subject to the same requirements as them.  We request comment on all aspects of classifying natural-gas and other engines for purposes of applying emission standards.  See Sections XI and XII for additional discussion of natural gas fueled engines.
    Crankcase Emissions from Natural Gas Engines
EPA is proposing one fuel-specific provision for natural gas engines, likewise applicable to all pollutant emissions, both GHGs and criteria pollutant emissions.  Note that we are also proposing other vehicle-level emissions controls for the natural gas storage tanks and refueling connections.  These are presented in Section XIII.  
EPA is proposing to require that all natural gas-fueled engines have closed crankcases, rather than continuing the provision that allows venting to the atmosphere all crankcase emissions from all compression-ignition engines.  This has been allowed as long as these vented crankcase emissions are measured and accounted for as part of an engine's tailpipe emissions.  This allowance has historically been in place to address the technical limitations related to recirculating diesel-fueled engines' crankcase emissions, which have high PM emissions, back into the engine's air intake.  High PM emissions vented into the intake of an engine can foul turbocharger compressors and aftercooler heat exchangers.  In contrast, historically EPA has mandated closed crankcase technology on all gasoline fueled engines and all natural gas spark-ignition engines.  The inherently low PM emissions from these engines posed no technical barrier to a closed crankcase mandate.  Because natural gas-fueled compression ignition engines also have inherently low PM emissions, there is no technological limitation that would prevent manufacturers from closing the crankcase and recirculating all crankcase gases into a natural gas-fueled compression ignition engine's air intake.  We are requesting comment on the costs and effectiveness of technologies that we have identified to comply with these provisions.   In addition, EPA is proposing that this revised standard not take effect until the 2021 model year, consistent with the requirement of section 202 (a)(3) (C) to provide four years lead time.



Class 7 and 8 Combination Tractors
Class 7 and 8 combination tractors-trailers contribute the largest portion of the total GHG emissions and fuel consumption of the heavy-duty sector, approximately two-thirds, due to their large payloads, their high annual miles traveled, and their major role in national freight transport.  These vehicles consist of a cab and engine (tractor or combination tractor) and a trailer.  In general, reducing GHG emissions and fuel consumption for these vehicles would involve improvements to all aspects of the vehicle.  
As we found during the development in Phase 1 and as continues to be true in the industry today, the heavy-duty combination tractor-trailer industry consists of separate tractor manufacturers and trailer manufacturers.  We are not aware of any manufacturer that typically assembles both the finished truck and the trailer and introduces the combination into commerce for sale to a buyer.  There are also large differences in the kinds of manufacturers involved with producing tractors and trailers.  For HD highway tractors and their engines, a relatively limited number of manufacturers produce the vast majority of these products.  The trailer manufacturing industry is quite different, and includes a large number of companies, many of which are relatively small in size and production volume.  Setting standards for the products involved -- tractors and trailers -- requires recognition of the large differences between these manufacturing industries, which can then warrant consideration of different regulatory approaches.  Thus, although tractor-trailers operate essentially as a unit from both a commercial standpoint and for purposes of fuel efficiency and CO2 emissions, the agencies have developed separate proposed standards for each.
 Based on these industry characteristics, EPA and NHTSA believe that the most appropriate regulatory approach for combination tractors and trailers is to establish standards for tractors separately from trailers.  As discussed below in Section IV, the agencies are also proposing standards for certain types of trailers.  
         Summary of the Phase 1 Tractor Program
The design of each tractor's cab and drivetrain determines the amount of power that the engine must produce in moving the truck and its payload down the road.  As illustrated in Figure III-1, the loads that require additional power from the engine include air resistance (aerodynamics), tire rolling resistance, and parasitic losses (including accessory loads and friction in the drivetrain).  The importance of the engine design is that it determines the basic GHG emissions and fuel consumption performance for the variety of demands placed on the vehicle, regardless of the characteristics of the cab in which it is installed.  

Figure III-1: Combination Tractor and Trailer Loads
Accordingly, for Class 7 and 8 combination tractors, the agencies adopted two sets of Phase 1 tractor standards for fuel consumption and CO2 emissions.  The CO2 emission and fuel consumption reductions related to engine technologies are recognized in the engine standards.  For vehicle-related emissions and fuel consumption, tractor manufacturers are required to meet vehicle-based standards.  Compliance with the vehicle standard must be determined using the GEM vehicle simulation tool.  
The Phase 1 tractor standards were based on several key attributes related to GHG emissions and fuel consumption that reasonably represent the many differences in utility and performance among these vehicles.  Attribute-based standards in general recognize the variety of functions performed by vehicles and engines, which in turn can affect the kind of technology that is available to control emissions and reduce fuel consumption, or its effectiveness.  Attributes that characterize differences in the design of vehicles, as well as differences in how the vehicles will be employed in-use, can be key factors in evaluating technological improvements for reducing CO2 emissions and fuel consumption.  Developing an appropriate attribute-based standard can also avoid interfering with the ability of the market to offer a variety of products to meet the customer's demand.  The Phase 1 tractor standards differ depending on GVWR (i.e., whether the truck is Class 7 or Class 8), the height of the roof of the cab, and whether it is a "day cab" or a "sleeper cab."  These later two attributes are important because the height of the roof, designed to correspond to the height of the trailer, significantly affects air resistance, and a sleeper cab generally corresponds to the opportunity for extended duration idle emission and fuel consumption improvements.  Based on these attributes, the agencies created nine subcategories within the Class 7 and 8 combination tractor category.  The Phase 1 rules set standards for each of them.  Phase 1 standards began with the 2014 model year and were followed with more stringent standards following in model year 2017.   The standards represent an overall fuel consumption and CO2 emissions reduction up to 23 percent from the tractors and the engines installed in them when compared to a baseline 2010 model year tractor and engine without idle shutdown technology.  Although the EPA and NHTSA standards are expressed differently (grams of CO2 per ton-mile and gallons per 1,000 ton-mile respectively), the standards are equivalent.
In Phase 1, the agencies allowed manufacturers to certify certain types of combination tractors as vocational vehicles.  These are tractors that do not typically operate at highway speeds, or would otherwise not benefit from efficiency improvements designed for line-haul tractors (although standards would still apply to the engines installed in these vehicles).  The agencies created a subcategory of "vocational tractors," because real world operation of these tractors is better represented by our Phase 1 vocational vehicle duty cycle than the tractor duty cycles.  Vocational tractors are subject to the standards for vocational vehicles rather than the combination tractor standards.  In addition, specific vocational tractors and heavy-duty vocational vehicles primarily designed to perform work off-road or having tires installed with a maximum speed rating at or below 55 mph are exempted from the Phase 1 standards.
In Phase 1, the agencies also established separate performance standards for the engines manufactured for use in these tractors.  EPA's engine-based CO2 standards and NHTSA's engine-based fuel consumption standards are being implemented using EPA's existing test procedures and regulatory structure for criteria pollutant emissions from medium- and heavy-duty engines.  These engine standards vary depending on engine size linked to intended vehicle service class (which are the same service classes used for many years for EPA's criteria pollutant standards).  
Manufacturers demonstrate compliance with the Phase 1 tractor standards using the GEM simulation tool.  As explained in Section II above, GEM is a customized vehicle simulation model which is the preferred approach to demonstrating compliance testing for combination tractors rather than chassis dynamometer testing used in light-duty vehicle compliance.  As discussed in the development of HD Phase 1 and recommended by the NAS 2010 study, a simulation tool is the preferred approach for HD tractor compliance because of the extremely large number of vehicle configurations.  The GEM compliance tool was developed by EPA and is an accurate and cost-effective alternative to measuring emissions and fuel consumption while operating the vehicle on a chassis dynamometer.  Instead of using a chassis dynamometer as an indirect way to evaluate real world operation and performance, various characteristics of the vehicle are measured and these measurements are used as inputs to the model.  For HD Phase 1, these characteristics relate to key technologies appropriate for this category of truck including aerodynamic features, weight reductions, tire rolling resistance, the presence of idle-reducing technology, and vehicle speed limiters.  The model also assumes the use of a representative typical engine in compliance with the separate, applicable Phase 1 engine standard.  Using these inputs, the model is used to quantify the overall performance of the vehicle in terms of CO2 emissions and fuel consumption. CO2 emission reduction and fuel consumption technologies not measured by the model must be evaluated separately, and the HD Phase 1 rules establish mechanisms allowing credit for such "off-cycle" technologies. 
In addition to the final Phase 1 tractor-based standards for CO2, EPA adopted a separate standard to reduce leakage of HFC refrigerant from cabin air conditioning (A/C) systems from combination tractors, to apply to the tractor manufacturer.  This HFC leakage standard is independent of the CO2 tractor standard.  Manufacturers can choose technologies from a menu of leak-reducing technologies sufficient to comply with the standard, as opposed to using a test to measure performance. 
The Phase 1 program also provided several flexibilities to advance the goals of the overall program while providing alternative pathways to achieve compliance.  The primary flexibility is the averaging, banking, and trading program which allows emissions and fuel consumption credits to be averaged within an averaging set, banked for up to five years, or traded among manufacturers.  Manufacturers with credit deficits were allowed to carry-forward credit deficits for up to three model years, similar to the LD GHG and CAFE carry-back credits.  Phase 1 also included several interim provisions, such as incentives for advanced technologies and provisions to obtain credits for innovative technologies (called off-cycle in the Phase 2 program) not accounted for by the HD Phase 1 version of GEM or for certifying early.
         Overview of the Proposed Phase 2 Tractor Program
The proposed HD Phase 2 program is similar in many respects to the Phase 1 approach.  The agencies are proposing to maintain the Phase 1 attribute-based regulatory structure in terms of dividing the tractor category into the same nine subcategories based on the tractor's GVWR, cab configuration, and roof height.  This structure is working well in the implementation of Phase 1.  The one area where the agencies are proposing to change the regulatory structure is related to heavy-haul tractors.  As noted above, the Phase 1 regulations include a set of provisions that allow vocational tractors to be treated as vocational vehicles.  However, because the agencies propose to include the powertrain as part of the technology basis for the tractor and vocational vehicle standards in Phase 2, we believe it is necessary to classify a certain set of these vocational tractors as heavy-haul tractors and subject them to a separate tractor standard that reflects their unique powertrain requirements and limitations in application of technologies to reduce fuel consumption and CO2 emissions.
The agencies propose to also retain much of the certification and compliance structure developed in Phase 1 but to simplify end of the year reporting.  The agencies propose that the Phase 2 tractor CO2 emissions and fuel consumption standards, as in Phase 1, be aligned.  The agencies also propose to continue to have separate engine and vehicle standards to drive technology improvements in both areas.  The reasoning behind the proposal to maintain separate standards is discussed above in Section II.B.2. As in Phase 1, the agencies propose to certify tractors using the GEM simulation tool and to require manufacturers to evaluate the performance of subsystems through testing (the results of this testing to be used as inputs to the GEM simulation tool).  Other aspects of the proposed HD Phase 2 certification and compliance program also mirror the Phase 1 program, such as maintaining a single reporting structure to satisfy both agencies, requiring limited data at the beginning of the model year for certification, and determining compliance based on end of year reports.  In the Phase 1 program, manufacturers participating in the ABT program provided 90 day and 270 day reports after the end of the model year.  The agencies required two reports for the initial program to help manufacturers become familiar with the reporting process.  For the Phase 2 program, the agencies propose that manufacturers would only be required to submit one end of the year report, which would simplify reporting.  
Even though many aspects of the proposed HD Phase 2 program are similar to Phase 1, there are some key differences.  While Phase 1 focused on reducing CO2 emissions and fuel consumption in tractors through the application of existing ("off-the-shelf") technologies, the proposed HD Phase 2 standards seek additional reductions through increased use of existing technologies and the development and deployment of more advanced technologies.  To evaluate the effectiveness of a more comprehensive set of technologies, the agencies propose several additional inputs to GEM.  The proposed set of inputs includes the Phase 1 inputs plus parameters to assess the performance of the engine, transmission, and driveline.  Specific inputs for, among others, predictive cruise control, automatic tire inflation systems, and 6x2 axles would now be required.  Manufacturers would conduct component testing to obtain the values for these technologies (should they choose to use them), which testing values would then be input into the GEM simulation tool.  See Section III.D.2 below.  To effectively assess performance of the technologies, the agencies also propose to change some aspects of the drive cycle used in certification through the addition of road grade.  To reflect the existing trailer market, the agencies are proposing to refine the aerodynamic test procedure for high roof cabs by adding some aerodynamic improving devices to the reference trailer (used for determining the relative aerodynamic performance of the tractor).  The agencies also propose to change the aerodynamic certification test procedure to capture aerodynamic improvement of trailers and the impact of wind on tractor aerodynamic performance.  The agencies are also proposing to change some of the interim provisions developed in Phase 1 to reflect the maturity of the program and reduced need and justification for some of the Phase 1 flexibilities.  Further discussions on all of these matters are covered in the following sections.
         Proposed Phase 2 Tractor Standards
EPA is proposing CO2 standards and NHTSA is proposing fuel consumption standards for new Class 7 and 8 combination tractors.  In addition, EPA is proposing to maintain the HFC standards for the air conditioning systems that were adopted in Phase 1.  EPA is also seeking comment on new standards to further control emissions of particulate matter (PM) from auxiliary power units (APU) installed in tractors that would prevent an unintended consequence of increasing PM emissions from tractors during long duration idling.  
This section describes in detail the proposed standards.  In addition to describing the proposed alternative ("Alternative 3"), in Section III.D.2.f we also detail another alternative ("Alternative 4").  Alternative 4 provides less lead time than the proposed set of standards but may provide more net benefits in the form of greater emission and fuel consumption reductions (with somewhat higher costs) in the early years of the program.  The agencies believe Alternative 4 has the potential to be maximum feasible and appropriate as discussed later in this section.     
The agencies welcome comment on all aspects of the proposed standards and the alternative standards described in Section III.D.2.f.  Commenters are encouraged to address all aspects of feasibility analysis, including costs, the likelihood of developing the technology to achieve sufficient relaibility within the proposed and alternative lead-times, and the extent to which the market could utilize the technology.  It would be helpful if comments addressed these issues separately for each type of technology.  
Proposed Fuel Consumption and CO2 Standards
The proposed fuel consumption and CO2 standards for the tractor cab are shown below in Table III-1.  These proposed standards would achieve reductions of up to 24 percent compared to the 2017 model year baseline level when fully phased in beginning in the 2027 MY.  The proposed standards for Class 7 are described as "Day Cabs" because we are not aware of any Class 7 sleeper cabs in the market today; however, the agencies propose to require any Class 7 tractor, regardless of cab configuration, meet the standards described as "Class 7 Day Cab."  We welcome comment on this proposed approach.
The agencies' analyses, as discussed briefly below and in more detail later in this preamble and in the draft RIA Chapter 2, indicate that these proposed standards, if finalized, would be  maximum feasible (within the meaning of 49 USC Section 32902 (k)) and would be appropriate under each agency's respective statutory authorities.  The agencies solicit comment on all aspects of these analyses.
Table III-1 Proposed Phase 2 Heavy-Duty Combination Tractor EPA Emissions Standards (g CO2/ton-mile) and NHTSA Fuel Consumption Standards (gal/1,000 ton-mile)
2021 Model Year CO2 Grams per Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
97
78
70
Mid Roof
107
84
78
High Roof
109
86
77
2021 Model Year Gallons of Fuel per 1,000 Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
9.5285
7.5639
6.8762
Mid Roof
10.5108
8.2515
7.6621
High Roof
10.7073
8.4479
7.5639
2024 Model Year CO2 Grams per Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
90
72
64
Mid Roof
100
78
71
High Roof
101
79
70
2024 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
8.8409
7.0727
6.2868
Mid Roof
9.8232
7.5639
6.9745
High Roof
9.9214
7.7603
6.8762
2027 Model Year CO2 Grams per Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
87
70
62
Mid Roof
96
76
69
High Roof
96
76
67
2027 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
8.5462
6.8762
6.0904
Mid Roof
9.4303
7.4656
6.7780
High Roof
9.4303
7.4656
6.5815

It should be noted that the proposed HD Phase 2 CO2 and fuel consumptions standards are not directly comparable to the Phase 1 standards.  This is because the agencies are proposing several test procedure changes to more accurately reflect real world operation of tractors.  These changes will result in the following differences.  First, the same vehicle evaluated using the proposed HD Phase 2 version of GEM will obtain higher (i.e. less favorable) CO2 and fuel consumption values because the Phase 2 drive cycles include road grade.  Road grade, which exists in the real-world, requires the engine to operate at higher horsepower levels to maintain speed while climbing a hill.  Even though the engine saves fuel on a downhill section, the overall impact increases CO2 emissions and fuel consumption.  The second of the key differences between the CO2 and fuel consumption values in Phase 1 and Phase 2 is due to proposed changes in the evaluation of aerodynamics.  In the real world, vehicles are exposed to wind which increases the drag of the vehicle and in turn increases the power required to move the vehicle down the road.  To more appropriately reflect the in-use aerodynamic performance of tractor-trailers, the agencies are proposing to input into Phase 2 GEM the wind averaged coefficient of drag instead of the no-wind (zero yaw) value used in Phase 1.  The final key difference between Phase 1 and the proposed Phase 2 program includes a more realistic and improved simulation of the transmission in GEM, which could increase CO2 and fuel consumption relative to Phase 1.
The agencies are proposing Phase 2 CO2 emissions and fuel consumption standards for the combination tractors that reflect reductions that can be achieved through improvements in the tractor's powertrain, aerodynamics, tires, and other vehicle systems.  The agencies have analyzed the feasibility of achieving the proposed CO2 and fuel consumption standards, and have identified means of achieving the proposed standards that are technically feasible in the lead time afforded, economically practicable and cost-effective.  EPA and NHTSA present the estimated costs and benefits of the proposed standards in Section III.D.2.  In developing the proposed standards for Class 7 and 8 tractors, the agencies have evaluated the following: 
         * the current levels of emissions and fuel consumption
         * the kinds of technologies that could be utilized by tractor and engine manufacturers to reduce emissions and fuel consumption from tractors and associated engines
         * the necessary lead time
         * the associated costs for the industry
         * fuel savings for the consumer
         * the magnitude of the CO2 and fuel savings that may be achieved

The technologies on whose performance the proposed tractor standards are predicated include: improvements in the engine, transmission, driveline, aerodynamic design, tire rolling resistance, other accessories of the tractor, and extended idle reduction technologies.  These technologies, and other accessories of the tractor, are described in draft RIA Chapter 2.4.  The agencies' evaluation shows that some of these technologies are available today, but have very low adoption rates on current vehicles, while others will require some lead time for development.  EPA and NHTSA also present the estimated costs and benefits of the proposed Class 7 and 8 combination tractor standards in draft RIA Chapter 2.8 and 2.12, explaining as well the basis for the agencies' proposed stringency level.
As explained below in Section III.D, EPA and NHTSA have determined that there would be sufficient lead time to introduce various tractor and engine technologies into the fleet starting in the 2021 model year and fully phasing in by the 2027 model year.  This is consistent with NHTSA's statutory requirement to provide four full model years of regulatory lead time for standards. As was adopted in Phase 1, the agencies are proposing for Phase 2 that manufacturers may generate and use credits from Class 7 and 8 combination tractors to show compliance with the standards.  This is discussed further in Section III.F.
Based on our analysis, the 2027 model year standards for combination tractors and engines represent up to a 24 percent reduction in CO2 emissions and fuel consumption over a 2017 model year baseline tractor, as detailed in Section III.D.2.  In considering the feasibility of vehicles to comply with the proposed standards over their useful lives, EPA also considered the potential for CO2 emissions to increase during the regulatory useful life of the product.  As we discuss in Phase 1 and separately in the context of deterioration factor (DF) testing, we have concluded that CO2 emissions are likely to stay the same or actually decrease in-use compared to new certified configurations.  In general, engine and vehicle friction decreases as products wear, leading to reduced parasitic losses and consequent lower CO2 emissions.  Similarly, tire rolling resistance falls as tires wear due to the reduction in tread height.  In the case of aerodynamic components, we project no change in performance through the regulatory life of the vehicle since there is essentially no change in their physical form as vehicles age.  Similarly, weight reduction elements such as aluminum wheels are (evidently) not projected to increase in mass through time, and hence, we can conclude will not deteriorate with regard to CO2 performance in-use.  Given all of these considerations, the agencies are confident in projecting that the tractor standards being proposed today would be technically feasible throughout the regulatory useful life of the program.
Proposed Non-CO2 GHG Standards for Tractors 
EPA is also proposing standards to control non-CO2 GHG emissions from Class 7 and 8 combination tractors.
    N2O and CH4 Emissions
The proposed heavy-duty engine standards for both N2O and CH4 as well as details of the proposed standards are included in the discussion in Section II.D.3 and II.D.4.  No additional controls for N2O or CH4 emissions beyond those in the proposed HD Phase 2 engine standards are being considered for the tractor category.
    HFC Emissions
Manufacturers can reduce hydrofluorocarbon (HFC) emissions from air conditioning (A/C) leakage emissions in two ways.  First, they can utilize leak-tight A/C system components.  Second, manufacturers can largely eliminate the global warming impact of leakage emissions by adopting systems that use an alternative, low-Global Warming Potential (GWP) refrigerant, to replace the commonly used R-134a refrigerant.  EPA proposes to address HFC emissions by maintaining the A/C leakage standards adopted in HD Phase 1 (see 40 CFR 1037.115(c)).  EPA believes the Phase 1 use of leak-tight components is at an appropriate level of stringency while maintaining the flexibility to produce the wide variety of A/C system configurations required in the tractor category.  In addition, there currently are not any low GWP refrigerants approved for the heavy-duty vehicle sector.  Without an alternative refrigerant approved for this sector, it is challenging to demonstrate feasibility to reduce the amount of leakage allowed under the HFC leakage standard.  Please see Section I.F(1)(b) for a discussion related to alternative refrigerants.
PM Emissions from APUs
 Auxiliary power units (APUs) can be used in lieu of operating the main engine during extended idle operations to provide climate control and power to the driver.  APUs can reduce fuel consumption, NOx, HC, CH4, and CO2 emissions when compared to main engine idling.  However, a potential unintended consequence of reducing CO2 emissions from combination tractors through the use of APUs during extended idle operation is an increase in PM emissions.  Therefore, EPA is seeking comment on the need and appropriateness to further reduce PM emissions from APUs.  
EPA conducted an analysis evaluating the potential impact on PM emissions due to an increase in APU adoption rates using MOVES.  In this analysis, EPA assumed that these APUs emit criteria pollutants at the level of the EPA standard for this type of non-road diesel engines.  Under this assumption, an APU would emit 1.8 grams PM per hour, assuming an extended idle load demand of 4.5 kW (6 hp).  However, a 2010 model year or newer tractor that uses its main engine to idle emits approximately 0.35 grams PM per hour. The results from these MOVES runs are shown below in Table III-2.  These results show that an increase in use of APUs could lead to an overall increase in PM emissions if left uncontrolled.  Column three labeled "Proposed Program PM2.5 Emission Impact without Further PM Control (tons)" shows the incremental increase in PM2.5 without further regulation of APU PM2.5 emissions.
Table III-2 Projected Impact of Increased Adoption of APUs in Phase 2
                                      CY
                  Baseline HD Vehicle PM2.5 Emissions (tons)
 Proposed Program PM2.5 [a] Emission Impact without Further PM Control (tons)
                                     2035
                                    21,452
                                     1,631
                                     2050
                                    24,675
                                     2,257
[a] Positive numbers mean emissions would increase from baseline to control case. PM2.5 from tire wear and brake wear are included. 

Since January 1, 2008, California ARB has prohibited the idling of sleeper cab tractors during periods of sleep and rest.  The regulations apply additional requirements to diesel-fueled APUs on tractors equipped with 2007 model year or newer engines.  Truck owners in California must either: 1) fit the APU with an ARB verified Level 3 particulate control device that achieves 85 percent reduction in particulate matter; or 2) have the APU exhaust plumbed into the vehicle's exhaust system upstream of the particulate matter aftertreatment device.  Currently ARB includes four control devices that have been verified to meet the Level 3 PM requirements.  These devices include HUSS Umwelttechnik GmbH's FS-MK Series Diesel Particulate filters, Impco Ecotrans Technologies' ClearSky Diesel Particulate Filter, Thermo King's Electric Regenerative Diesel Particulate Filter, and Proventia's Electronically Heated Diesel Particulate Filter.  In addition, ARB has approved a Cummins integrated diesel-fueled APU and several fuel-fired heaters produced by Espar and Webasto.
EPA conducted an evaluation of the impact of potentially requiring further PM control from APUs nationwide.  As shown in Table III-2, EPA projects that the HD Phase 2 program as proposed (without additional PM controls) would increase PM2.5 emissions by 1,631 tons in 2035 and 2,257 tons in 2050.  The annual impact of a program to further control PM could lead to a reduction of PM2.5 emissions nationwide by 3,084 tons in 2035 and by 4,344 tons in 2050, as shown in Table III-3 the column labeled "Net Impact on National PM2.5 Emission with Further PM Control of APUs (tons)."   
Table III-3 Projected Impact of Further Control on PM2.5 Emissions [a]
CY
Baseline National Heavy-Duty Vehicle PM2.5  Emissions (tons)
Proposed HD Phase 2 Program National PM2.5 Emissions without Further PM Control (tons)

Proposed HD Phase 2 Program National PM2.5 Emissions with Further PM Control (tons)

Net Impact on National PM2.5 Emission with Further PM Control of APUs (tons)
                                     2035
                                    21,452
                                    23,083 
                                    19,999 
                                    -3,084
                                     2050
                                    24,675
                                    26,932 
                                    22,588 
                                    -4,344
[a] PM2.5 from tire wear and brake wear are included. 

EPA developed long-term cost projections for catalyzed diesel particulate filters (DPF) as part of the Nonroad Diesel Tier 4 rulemaking.  In that rulemaking, EPA estimated the DPF costs would add $580 to the cost of 150 horsepower engines (69 FR 39126, June 29, 2004).  On the other hand, ARB estimated the cost of retrofitting a diesel powered APU with a PM trap to be $2,000 in 2005.  The costs of a DPF for an APU that provides less than 25 horsepower would be less than the projected cost of a 150 HP engine because the filter volume is in general proportional to the engine-out emissions and exhaust flow rate.  Proventia is charging customers $2,240 for electronically heated DPF.  EPA welcomes comments on cost estimates associated with DPF systems for APUs.
EPA requests comments on the technical feasibility of diesel particulate filters ability to reduce PM emissions by 85 percent from non-road engines used to power APUs.  EPA also requests comments on whether the technology costs outlined above are accurate, and if so, if projected reductions are appropriate taking into account cost, noise, safety, and energy factors.  See CAA section 213(a)(4).
Proposed Exclusions from the Phase 2 Tractor Standards
As noted above, in Phase 1, the agencies adopted provisions to allow tractor manufacturers to reclassify certain tractors as vocational vehicles.  The agencies propose in Phase 2 to continue to allow manufacturers to exclude certain vocational-types of tractors from the combination tractor standards and instead be subject to the vocational vehicle standards.  However, the agencies propose to set unique standards for tractors used in heavy haul applications in Phase 2.  Details regarding the proposed heavy-haul standards are included below in Section II.D.3.
During the development of Phase 1, the agencies received multiple comments from several stakeholders supporting an approach for an alternative treatment of a subset of tractors because they were designed to operate at lower speeds, in stop and go traffic, and sometimes operate at higher weights than the typical line-haul tractor. These types of applications have limited potential for improvements in aerodynamic performance to reduce CO2 emissions and fuel consumption.  Consistent with the agencies' approach in Phase 1, the agencies agree that these vocational tractors are operated differently than line-haul tractors and therefore fit more appropriately into the vocational vehicle category.  However, we need to continue to ensure that only tractors that are truly vocational tractors are classified as such. A vehicle determined by the manufacturer to be a HHD vocational tractor would fall into one of the HHD vocational vehicle subcategories and be regulated as a vocational vehicle.  Similarly, MHD tractors which the manufacturer chooses to reclassify as vocational tractors would be regulated as a MHD vocational vehicle.  Specifically, the agencies are proposing to change the provisions in EPA's 40 CFR 1037.630 and NHTSA's regulation at 49 CFR 523.2 and only allow the following two types of vocational tractors to be eligible for reclassification by the manufacturer:
      (1) Low-roof tractors intended for intra-city pickup and delivery, such as those that deliver bottled beverages to retail stores.
      (2) Tractors intended for off-road operation (including mixed service operation), such as those with reinforced frames and increased ground clearance.
Because the difference between some vocational tractors and line-haul tractors is potentially somewhat subjective, we are also proposing to continue to limit the use of this provision to a rolling three year sales limit of 21,000 vocational tractors per manufacturer consistent with past production volumes of such vehicles.  We propose to carry-over the existing three year sales limit with the recognition that heavy-haul tractors would no longer be permitted to be treated as vocational vehicles (suggesting a lower volumetric cap could be appropriate) but that the heavy-duty market has improved since the development of the HD Phase 1 rule (suggesting the need for a higher sales cap).  The agencies welcome comment on whether the proposed sales volume limit is set at an appropriate level looking into the future.
Also in Phase 1, EPA determined that manufacturers that met the small business criteria specified in 13 CFR 121.201 for "Heavy Duty Truck Manufacturing" were not subject to the greenhouse gas emissions standards of 40 CFR 1037.106.  The regulations required that qualifying manufacturers must notify the Designated Compliance Officer each model year before introducing the vehicles into commerce.  The manufacturers are also required to label the vehicles to identify them as excluded vehicles.  EPA and NHTSA are seeking comments on eliminating this provision for tractor manufacturers in the Phase 2 program.  The agencies are aware of two second stage manufacturer building custom sleeper cab tractors.  We could treat these vehicles in one of two ways.  First, the vehicles may be considered as dromedary vehicles and therefore treated as vocational vehicles.  Or the agencies could provide provisions that stated if a manufacturer changed the cab, but not the frontal area of the vehicle, then it could retain the aerodynamic bin of the original tractor.  We welcome comments on these considerations. 
EPA is proposing to not exempt glider kits from the Phase 2 GHG emission standards.  Gliders and glider kits are exempt from NHTSA's Phase 1 fuel consumption standards.  For EPA purposes, the CO2 provisions of Phase 1 exempted gliders and glider kits produced by small businesses but did not include such a blanket exemption for other glider kits.  Thus, some gliders and glider kits are already subject to the requirement to obtain a vehicle certificate prior to introduction into commerce as a new vehicle.  However, the agencies believe glider manufacturers may not understand how these regulations apply to them, resulting in a number of uncertified vehicles.  
EPA is concerned about adverse economic impacts on small businesses that assemble glider kits and glider vehicles.  Therefore, EPA is proposing an option that would grandfather existing small businesses, but cap annual production based on recent sales.  EPA requests comment on whether any special provisions would be needed to accommodate glider kits.  See Section XIV for additional discussion of the proposed requirements for glider vehicles.
Similarly, NHTSA is considering including gliders under its Phase 2 program.  The agencies request comment on their respective considerations.  
In-use Standards
Section 202(a)(1) of the CAA specifies that EPA is to propose emissions standards that are applicable for the useful life of the vehicle.  The in-use Phase 2 standards that EPA is proposing would apply to individual vehicles and engines, just as EPA adopted for Phase 1.  NHTSA is also proposing the same approach used in Phase 1 which does not include in-use standards.  
EPA is also not proposing any changes to provisions requiring that the useful life for tractors with respect to CO2 emissions be equal to the respective useful life periods for criteria pollutants, as shown below in Table III-4.  (See 40 CFR 1037.106(e)).  EPA does not expect degradation of the technologies evaluated for Phase 2 in terms of CO2 emissions, therefore we propose no changes to the regulations describing compliance with GHG pollutants with regards to deterioration.  (See 40 CFR 1037.241).  We welcome comments that highlight a need to change this approach.
Table III-4 Tractor Useful Life Periods
 
Years
Miles
Class 7 Tractors
10
185,000
Class 8 Tractors
10
435,000

         Feasibility of the Proposed Tractor Standards
This section describes the agencies' technical feasibility and cost analysis in greater detail.  Further detail on all of these technologies can be found in the draft RIA Chapter 2.
Class 7 and 8 tractors are used in combination with trailers to transport freight.  The variation in the design of these tractors and their typical uses drive different technology solutions for each regulatory subcategory.  As noted above, the agencies are proposing to continue the Phase 1 provisions that treat vocational tractors as vocational vehicles instead of as combination tractors, as noted in Section III.C.  The focus of this section is on the feasibility of the proposed standards for combination tractors including the heavy-haul tractors, but not the vocational tractors.
EPA and NHTSA collected information on the cost and effectiveness of fuel consumption and CO2 emission reducing technologies from several sources.  The primary sources of information were the Southwest Research Institute evaluation of heavy-duty vehicle fuel efficiency and costs for NHTSA, the Department of Energy's SuperTruck Program, 2010 National Academy of Sciences report of Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles, TIAX's assessment of technologies to support the NAS panel report, the analysis conducted by the Northeast States Center for a Clean Air Future, International Council on Clean Transportation, Southwest Research Institute and TIAX for reducing fuel consumption of heavy-duty long haul combination tractors (the NESCCAF/ICCT study), and the technology cost analysis conducted by ICF for EPA.  
What Technologies Did the Agencies Consider to Reduce the CO2 Emissions and Fuel Consumption of Combination Tractors?
Manufacturers can reduce CO2 emissions and fuel consumption of combination tractors through use of many technologies, including engine, drivetrain, aerodynamic, tire, extended idle, and weight reduction technologies.  The agencies' determination of the feasibility of the proposed HD Phase 2 standards is based on our projection of the use of these technologies and an assessment of their effectiveness.  We will also discuss other technologies that could potentially be used, such as vehicle speed limiters, although we are not basing the proposed standards on their use for the model years covered by this proposal, for various reasons discussed below.  
In this section we discuss generally the tractor and engine technologies that the agencies considered to improve performance of heavy-duty tractors, while Section III.D.2 discusses the baseline tractor definition and technology packages the agencies used to determine the proposed standard levels. 
Engine technologies: As discussed in Section II.D above, there are several engine technologies that can reduce fuel consumption of heavy-duty tractors.  These technologies include friction reduction, combustion system optimization, and Rankine cycle.  These engine technologies would impact the Phase 2 vehicle results because the agencies propose that the manufacturers enter a fuel map into GEM.  
Aerodynamic technologies:  There are opportunities to reduce aerodynamic drag from the tractor, but it is sometimes difficult to assess the benefit of individual aerodynamic features.  Therefore, reducing aerodynamic drag requires optimizing of the entire system.  The potential areas to reduce drag include all sides of the truck  -  front, sides, top, rear and bottom.  The grill, bumper, and hood can be designed to minimize the pressure created by the front of the truck.  Technologies such as aerodynamic mirrors and fuel tank fairings can reduce the surface area perpendicular to the wind and provide a smooth surface to minimize disruptions of the air flow.  Roof fairings provide a transition to move the air smoothly over the tractor and trailer.  Side extenders can minimize the air entrapped in the gap between the tractor and trailer.  Lastly, underbelly treatments can manage the flow of air underneath the tractor.  DOE has partnered with the heavy-duty industry to demonstrate vehicles that achieve a 50 percent improvement in freight efficiency.  This SuperTruck program has led to significant advancements in the aerodynamics of combination tractor-trailers. The manufacturers' SuperTruck demonstration vehicles are achieving approximately 7 percent freight efficiency improvements over a 2010 MY baseline vehicle due to improvements in tractor aerodynamics.  The 2010 NAS Report on heavy-duty trucks found that aerodynamic improvements which yield 3 to 4 percent fuel consumption reduction or 6 to 8 percent reduction in Cd values, beyond technologies used in today's SmartWay trucks are achievable.  
Lower Rolling Resistance Tires:  A tire's rolling resistance results from the tread compound material, the architecture and materials of the casing, tread design, the tire manufacturing process, and its operating conditions (surface, inflation pressure, speed, temperature, etc.).  Differences in rolling resistance of up to 50 percent have been identified for tires designed to equip the same vehicle.  Since 2007, SmartWay designated tractors have had steer tires with rolling resistance coefficients of less than 6.6 kg/metric ton for the steer tire and less than 7.0 kg/metric ton for the drive tire.  Low rolling resistance (LRR) drive tires are currently offered in both dual assembly and wide-based single configurations.  Wide based single tires can offer rolling resistance reduction along with improved aerodynamics and weight reduction.  The lowest rolling resistance value submitted for 2014MY GHG and fuel efficiency certification was 4.48 and 5.10 kg/metric ton for the steer and drive tires respectively.  
Weight Reduction:  Reductions in vehicle mass lower fuel consumption and GHG emissions by decreasing the overall vehicle mass that is moved down the road. Weight reductions also increase vehicle payload capability which can allow additional tons to be carried by fewer trucks consuming less fuel and producing lower emissions on a ton-mile basis.  We treated such weight reduction in two ways in Phase 1 to account for the fact that combination tractor-trailers weigh-out approximately one-third of the time and cube-out approximately two-thirds of the time.  Therefore in Phase 1 and also as proposed for Phase 2, one-third of the weight reduction would be added payload in the denominator while two-thirds of the weight reduction is subtracted from the overall weight of the vehicle in GEM.  See 76 FR 57153.
In Phase 1, we reflected mass reductions for specific technology substitutions (e.g., installing aluminum wheels instead of steel wheels). These substitutions were included where we could with confidence verify the mass reduction information provided by the manufacturer.  The agencies propose to expand the list of weight reduction components which can be input into the GEM in order to provide the manufacturers with additional means to comply via GEM with the combination tractor standards and to further encourage reductions in vehicle weight.  As in Phase 1, we recognize that there may be additional potential for weight reduction in new high strength steel components which combine the reduction due to the material substitution along with improvements in redesign, as evidenced by the studies done for light-duty vehicles.  In the development of the high strength steel component weights, we are only assuming a reduction from material substitution and no weight reduction from redesign, since we do not have any data specific to redesign of heavy-duty components nor do we have a regulatory mechanism to differentiate between material substitution and improved design.  Additional weight reduction would be evaluated as a potential off-cycle credit.
Extended Idle Reduction:  Auxiliary power units (APU), fuel operated heaters, battery supplied air conditioning, and thermal storage systems are among the technologies available today to reduce main engine extended idling from sleeper cabs.  Each of these technologies reduces fuel consumption during idling from a truck without this equipment (the baseline) from approximately 0.8 gallons per hour (main engine idling fuel consumption rate) to approximately 0.2 gallons per hour for an APU.  EPA and NHTSA agree with the TIAX assessment that a 5 percent reduction in overall fuel consumption reduction is achievable.  
Idle Reduction:  Day cab tractors often idle while cargo is loaded or unloaded, as well as during the frequent stops that are inherent with driving in urban traffic conditions near cargo destinations. To recognize idle reduction technologies that reduce workday idling, the agencies have developed a new idle-only duty cycle that is proposed to be used in GEM. As discussed above in Section II.D, this new proposed certification test cycle would measure the amount of fuel saved and CO2 emissions reduced by two primary types of technologies: neutral idle and stop-start. The proposed rules apply this test cycle only to vocational vehicles because these types of vehicles spend more time at idle than tractors.  However, the agencies request comment on whether we should extend this vocational vehicle idle reduction approach to day cab tractors.  Neutral idle would only be available for tractors using torque-converter automatic transmissions, and stop-start would be available for any tractor. Unlike the fixed numerical value in GEM for automatic engine shutdown systems to reduce overnight idling of combination tractors, this new idle reduction approach would result in different numerical values depending on user inputs. The required inputs and other details about this cycle, as it would apply to vocational vehicles, are described in the draft RIA Chapter 3.  If we extended this approach to day cab tractors, we could set a fixed GEM composite cycle weighting factor at a value representative of the time spent at idle for a typical day cab tractor, possibly five percent.  Under this approach, tractor manufacturers would be able to select GEM inputs that identify the presence of workday idle reduction technologies, and GEM would calculate the associated benefit due to these technologies, using this new idle-only cycle as described in the draft RIA Chapter 3.
Vehicle Speed Limiters:  Fuel consumption and GHG emissions increase proportional to the square of vehicle speed.  Therefore, lowering vehicle speeds can significantly reduce fuel consumption and GHG emissions.  A vehicle speed limiter (VSL), which limits the vehicle's maximum speed, is another technology option for compliance that is already utilized today by some fleets (though the typical maximum speed setting is often higher than 65 mph).  
Downsized Engines and Downspeeding:  As tractor manufacturers continue to reduce the losses due to vehicle loads, such as aerodynamic drag and rolling resistance, the amount of power required to move the vehicle decreases.  In addition, engine manufacturers continue to improve the power density of heavy-duty engines through means such as reducing the engine friction due to smaller surface area.  These two changes lead to the ability for truck purchasers to select lower displacement engines while maintaining the previous level of performance.  Engine downsizing could be more effective if it is combined with the downspeeding assuming increased BMEP does not affect durability.  The increased efficiency of the vehicle moves the operating points down to a lower load zone on a fuel map, which often moves the engine away from its sweet spot to a less efficient zone.  In order to compensate for this loss, downspeeding allows the engine to run at a lower engine speed and move back to higher load zones, thus can slightly improve fuel efficiency.  Reducing the engine size allows the vehicle operating points to move back to the sweet spot, thus further improving fuel efficiency.  Engine downsizing can be accounted for as a vehicle technology through the use of the engine's fuel map in GEM.
Transmission:  As discussed in the 2010 NAS report, automatic (AT) and automated manual transmissions (AMT) may offer the ability to improve vehicle fuel consumption by optimizing gear selection compared to an average driver.  However, as also noted in the report and in the supporting TIAX report, the improvement is very dependent on the driver of the truck, such that reductions ranged from 0 to 8 percent.  Well-trained drivers would be expected to perform as well or even better than an automatic transmission since the driver can see the road ahead and anticipate a changing stoplight or other road condition that neither an automatic nor automated manual transmission can anticipate.  However, poorly-trained drivers that shift too frequently or not frequently enough to maintain optimum engine operating conditions could be expected to realize improved in-use fuel consumption by switching from a manual transmission to an automatic or automated manual transmission.  As transmissions continue to evolve, we are now seeing in the European heavy-duty vehicle market the addition of dual clutch transmissions (DCT).  DCTs operate similar to AMTs, but with two clutches so that the transmission can maintain engine speed during a shift which improves fuel efficiency.  We believe there may be real benefits in reduced fuel consumption and GHG emissions through the adoption of dual clutch, automatic or automated manual transmission technology.  
Low Friction Transmission, Axle, and Wheel Bearing Lubricants:  The 2010 NAS report assessed low friction lubricants for the drivetrain as providing a 1 percent improvement in fuel consumption based on fleet testing.  A field trial of European medium-duty trucks found an average fuel consumption improvement of 1.8 percent using SAE 5W-30 engine oil, SAE 75W90 axle oil and SAE 75W80 transmission oil when compared to SAE 15W40 engine oil and SAE 90W axle oil, and SAE 80W transmission oil.  The light-duty 2012-16 MY vehicle rule and the pickup truck portion of this program estimate that low friction lubricants can have an effectiveness value between 0 and 1 percent compared to traditional lubricants.  
Drivetrain:  Most tractors today have three axles  -  a steer axle and two rear drive axles, and are commonly referred to as 6x4 tractors.  Manufacturers offer 6x2 tractors that include one rear drive axle and one rear non-driving axle.  The 6x2 tractors offer three distinct benefits.  First, the non-driving rear axle does not have internal friction and therefore reduces the overall parasitic losses in the drivetrain.  In addition, the 6x2 configuration typically weighs approximately 300 to 400 pounds less than a 6x4 configuration.  Finally, the 6x2 typically costs less or is cost neutral when compared to a 6x4 tractor.  Sources cite the effectiveness of 6x2 axles at between 1 and 3 percent.  Similarly, with the increased use of double and triple trailers, which reduce the weight on the tractor axles when compared to a single trailer, manufacturers offer 4x2 axle configurations.  The 4x2 axle configuration would have as good as or better fuel efficiency performance than a 6x2.
 Accessory Improvements:  Parasitic losses from the engine come from many systems, including the water pump, oil pump, and power steering pump. Reductions in parasitic losses are one of the areas being developed under the DOE SuperTruck program.  As presented in the DOE Merit reviews, Navistar stated that they demonstrated a 0.45 percent reduction in fuel consumption through water pump improvements and 0.3 percent through oil pump improvements compared to a current engine.  In addition, Navistar showed a 0.9 percent benefit for a variable speed water pump and variable displacement oil pump.  Detroit Diesel reports a 0.5 percent coming from improved water pump efficiency.   It should be noted that water pump improvements include both pump efficiency improvement and variable speed or on/off controls. Lube pump improvements are primarily achieved using variable displacement pumps and may also include efficiency improvement.  All of these results shown in this paragraph are demonstrated through the DOE SuperTruck program at single operating point on the engine map, and therefore the overall expected reduction of these technologies is less than the single point result.
Intelligent Controls:  Skilled drivers know how to control a vehicle to obtain maximum fuel efficiency by, among other things, considering road terrain.  For example, the driver may allow the vehicle to slow down below the target speed on an uphill and allow it to go over the target speed when going downhill, to essentially smooth out the engine demand.  Electronic controls can be developed to essentially mimic this activity.  The agencies propose to provide a 2 percent reduction in fuel consumption and CO2 emissions for vehicles configured with intelligent controls, such as predictive cruise control.
Automatic Tire Inflation Systems:  Proper tire inflation is critical to maintaining proper stress distribution in the tire, which reduces heat loss and rolling resistance.  Tires with reduced inflation pressure exhibit a larger footprint on the road, more sidewall flexing and tread shearing, and therefore, have greater rolling resistance than a tire operating at its optimal inflation pressure.  Bridgestone tested the effect of inflation pressure and found a 2 percent variation in fuel consumption over a 40 psi range.  Generally, a 10 psi reduction in overall tire inflation results in about a 1 percent reduction in fuel economy.  To achieve the intended fuel efficiency benefits of low rolling resistance tires, it is critical that tires are maintained at the proper inflation pressure. 
Proper tire inflation pressure can be maintained with a rigorous tire inspection and maintenance program or with the use of tire pressure and inflation systems.  According to a study conducted by FMCSA in 2003, about 1 in 5 tractors/trucks is operating with 1 or more tires underinflated by at least 20 psi.  A 2011 FMCSA study estimated underinflation accounts for one service call per year and increases tire procurement costs 10 to 13 percent.  The study found that total operating costs can increase by $600 to $800 per year due to underinflation.   A recent study by The North American Council on Freight Efficiency, found that adoption of tire pressure monitoring systems is increasing. It also found that reliability and durability of commercially available tire pressure systems are good and early issues with the systems have been addressed.  These automatic tire inflation systems monitor tire pressure and also automatically keep tires inflated to a specific level.  The agencies propose to provide a 1 percent CO2 and fuel consumption reduction value for tractors with automatic tire inflation systems installed.  
Tire pressure monitoring systems notify the operator of tire pressure, but require the operator to manually inflate the tires to the optimum pressure.  Because of the dependence on the operator's action, the agencies are not proposing to provide a reduction value for tire pressure monitoring systems.  We request comment on this approach and seek data from those that support a reduction value be assigned to tire pressure monitoring systems.
Hybrid:  Hybrid powertrain development in Class 7 and 8 tractors has been limited to a few manufacturer demonstration vehicles to date.  One of the key benefit opportunities for fuel consumption reduction with hybrids is less fuel consumption when a vehicle is idling, but the standard is already premised on use of extended idle reduction so use of hybrid technology would duplicate many of the same emission reductions attributable to extended idle reduction.  NAS estimated that hybrid systems would cost approximately $25,000 per tractor in the 2015 through the 2020 time frame and provide a potential fuel consumption reduction of 10 percent, of which 6 percent is idle reduction which can be achieved (less expensively) through the use of other idle reduction technologies.  The limited reduction potential outside of idle reduction for Class 8 sleeper cab tractors is due to the mostly highway operation and limited start-stop operation.  Due to the high cost and limited benefit during the model years at issue in this action (as well as issues regarding sufficiency of lead time (see Section III.D.2 below), the agencies are not including hybrids in assessing standard stringency (or as an input to GEM).  
Management:  The 2010 NAS report noted many operational opportunities to reduce fuel consumption, such as driver training and route optimization.  The agencies have included discussion of several of these strategies in draft RIA Chapter 2, but are not using these approaches or technologies in the standard setting process.  The agencies are looking to other resources, such as EPA's SmartWay Transport Partnership and regulations that could potentially be promulgated by the Federal Highway Administration and the Federal Motor Carrier Safety Administration, to continue to encourage the development and utilization of these approaches.  
Projected Technology Effectiveness and Cost
EPA and NHTSA project that CO2 emissions and fuel consumption reductions can be feasibly and cost-effectively met through technological improvements in several areas.  The agencies evaluated each technology and estimated the most appropriate adoption rate of technology into each tractor subcategory.  The next sections describe the baseline vehicle configuration, the effectiveness of the individual technologies, the costs of the technologies, the projected adoption rates of the technologies into the regulatory subcategories, and finally the derivation of the proposed standards.
The agencies propose Phase 2 standards that project by 2027, all high-roof tractors would have aerodynamic performance equal to or better today's SmartWay performance  -  which represents the best of today's technology.  This would equate to having 40 percent of new high roof sleeper cabs in 2027 complying with the current best practices and 60 percent of the new high-roof sleeper cab tractors sold in 2027 having better aerodynamic performance than the best tractors available today.  For tire rolling resistance, we premised the proposed standards on the assumption that nearly all tires in 2027 would have rolling resistance equal to or superior to tires meeting today's SmartWay designation.  As discussed in Section II.D, the agencies assume the proposed 2027 MY engines would achieve an additional 4 percent improvement over Phase 1 engines and we project would include 15 percent of waste heat recovery (WHR) and many other advanced engine technologies.  In addition, we are proposing standards that project improvements to nearly all of today's transmissions, incorporation of extended idle reduction technologies on 90 percent of sleeper cabs, and significant adoption of other types of technologies such as predictive cruise control and automatic tire inflation systems.  
The agencies believe that hybrid powertrains systems for tractors may not be sufficiently developed and the necessary manufacturing capacity put in place to base a standard on any significant volume of hybrid tractors.  Unlike hybrids for vocational vehicles and light-duty vehicles, the agencies are not aware of any full hybrid systems currently developed for long haul tractor applications.  To date, hybrid systems for tractors have been primarily focused on idle shutdown technologies and not on the broader energy storage and recovery systems necessary to achieve reductions over typical vehicle drive cycles.  The proposed standards reflect the potential for idle shutdown technologies through GEM.  Further as highlighted by the 2010 NAS report, the agencies do believe that full hybrid powertrains have the potential in the longer term to provide significant improvements in tractor fuel efficiency and to greenhouse gas emission reductions.  However, lacking any existing systems or manufacturing base, we cannot conclude with certainty, absent additional information,  that such technology would be available for tractors in the 2021-2027 timeframe.  However the agencies welcome comment from industry and others on their projected timeline for deployment of hybrid powertrains for tractor applications.  
    Tractor Baselines for Costs and Effectiveness 
The fuel efficiency and CO2 emissions of combination tractors vary depending on the configuration of the tractor.  Many aspects of the tractor impact its performance, including the engine, transmission, drive axle, aerodynamics, and rolling resistance.  For each subcategory, the agencies selected a theoretical tractor to represent the average 2017 model year tractor that meets the Phase 1 standards (see 76 FR 57212, September 15, 2011).  These tractors are used as baselines from which to evaluate costs and effectiveness of additional technologies and standards.  The specific attributes of each tractor subcategory are listed below in Table III-5.  Using these values, the agencies assessed the CO2 emissions and fuel consumption performance of the proposed baseline tractors using the proposed version of Phase 2 GEM.  The results of these simulations are shown below in Table III-6.  
As noted earlier, the Phase 1 2017 model year tractor standards and the baseline 2017 model year tractor results are not directly comparable.  The same set of aerodynamic and tire rolling resistance technologies were used in both setting the Phase 1 standards and determining the baseline of the Phase 2 tractors.  However, there are several aspects that differ.  First, a new version of GEM was developed and validated to provide additional capabilities, including more refined modeling of transmissions and engines.  Second, the determination of the proposed HD Phase 2 CdA value takes into account a revised test procedure, a new standard reference trailer, and wind averaged drag as discussed below in Section III.E.  In addition, the proposed HD Phase 2 version of GEM includes road grade in the 55 mph and 65 mph highway cycles, as discussed below in Section III.E.  Finally, the agencies assessed the current level of automatic engine shutdown and idle reduction technologies used by the tractor manufacturers to comply with the 2014 model year CO2 and fuel consumption standards.  To date, the manufacturers are meeting the 2014 model year standards without the use of this technology.  Therefore, in this proposal the agencies reverted back to the baseline APU adoption rate of 30 percent, the value used in the Phase 1 baseline.  
Table III-5 GEM Inputs for the Baseline Class 7 and 8 Tractor 
                                    Class 7
                                    Class 8
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                    Engine
                          2017 MY 11L Engine  350 HP
                           2017 MY 11L Engine 350 HP
                           2017 MY 11L Engine 350 HP
                          2017 MY 15L Engine  455 HP
                           2017 MY 15L Engine 455 HP
                           2017 MY 15L Engine 455 HP
                           2017 MY 15L Engine 455 HP
                           2017 MY 15L Engine 455 HP
                           2017 MY 15L Engine 455 HP
                          Aerodynamics (CdA in m[2])
                                     5.00
                                     6.40
                                     6.42
                                     5.00
                                     6.40
                                     6.42
                                     4.95
                                     6.35
                                     6.22
                      Steer Tires (CRR in kg/metric ton)
                                     6.99
                                     6.99
                                     6.87
                                     6.99
                                     6.99
                                     6.87
                                     6.87
                                     6.87
                                     6.54
                      Drive Tires (CRR in kg/metric ton)
                                     7.38
                                     7.38
                                     7.26
                                     7.38
                                     7.38
                                     7.26
                                     7.26
                                     7.26
                                     6.92
                     Extended Idle Reduction Adoption Rate
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                     30% 
                                      30%
                                      30%
                  Transmission = 10 Speed Manual Transmission
   Gear Ratios = 12.8, 9.25, 6.76, 4.90, 3.58, 2.61, 1.89, 1.38, 1.00, 0.73
                            Drive Axle Ratio = 3.70

Table III-6 Class 7 and 8 Tractor Baseline CO2 Emissions and Fuel Consumption

                                    Class 7
                                    Class 8

                                    Day Cab
                                    Day Cab
                                  Sleeper Cab

                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
CO2 (grams CO2/ton-mile)
                                      107
                                      118
121
                                      86
                                      93
                                      95
                                      79
                                      87
                                      88
Fuel Consumption (gal/1,000 ton-mile)
                                     10.5
                                     11.6
                                     11.9
                                      8.4
                                      9.1
                                      9.3
                                      7.8
                                      8.5
                                      8.6

The fuel consumption and CO2 emissions in the baseline described above remains the same over time with no assumed improvements after 2017, absent a Phase 2 regulation.  An alternative baseline was also evaluated by the agencies in which there is a continuing uptake of technologies in the tractor market that reduce fuel consumption and CO2 emissions absent a Phase 2 regulation.  This alternative baseline, referred to as the dynamic baseline, was developed to estimate the effect of market pressures and non-regulatory government initiatives to improve tractor fuel consumption.  The dynamic baseline assumes that the significant level of research funded and conducted by the Federal government, industry, academia and other organizations will, in the future, result the adoption of some technologies beyond the levels required to comply with Phase 1 standards.  One example of such research is the Department of Energy Super Truck program which has a goal of demonstrating cost-effective measures to improve the efficiency of Class 8 long-haul freight trucks by 50 percent by 2015.  The dynamic baseline also assumes that manufacturers will not cease offering fuel efficiency improving technologies that currently have significant market penetration, such as automated manual transmissions.  The dynamic tractor baselines (one for each of the nine tractor types) are characterized by fuel consumption and CO2 emissions that gradually decrease between 2019 and 2028.  In 2028, the fuel consumption for the alternative tractor baselines is approximately 4.0 percent lower than those shown in Table III-6. This results from the assumed introduction of aerodynamic technologies such as down exhaust, underbody airflow treatment in addition to tires with lower rolling resistance.  The assumed introduction of these technologies reduces the CdA of the baseline tractors and CRR of the tractor tires. To take one example, the CdA for baseline high roof sleeper cabs in Table III-5 is 6.22 (m[2]) in 2018.  In 2028, the CdA of a high roof sleeper cab would be assumed to still be 6.22 m[2] in the baseline case outlined above.  Alternatively, in the dynamic baseline, the CdA for high roof sleeper cabs is 5.61 (m[2]) in 2028 due to assumed market penetration of technologies absent the Phase 2 regulation.  The dynamic baseline analysis is discussed in more detail in draft RIA Chapter 11.
    Tractor Technology Packages
The agencies' assessment of the proposed technology effectiveness was developed through the use of the GEM in coordination with modeling conducted by Southwest Research Institute.  The agencies developed the proposed standards through a three-step process, similar to the approach used in Phase 1.  First, the agencies developed technology performance characteristics for each technology, as described below.  Each technology is associated with an input parameter which in turn would be used as an input to the Phase 2 GEM simulation tool and its effectiveness thereby modeled.  The performance levels for the range of Class 7 and 8 tractor aerodynamic packages and vehicle technologies are described below in Table III-7.  Second, the agencies combined the technology performance levels with a projected technology adoption rate to determine the GEM inputs used to set the stringency of the proposed standards.  Third, the agencies input these parameters into Phase 2 GEM and used the output to determine the proposed CO2 emissions and fuel consumption levels.  All percentage improvements noted below are over the 2017 baseline tractor.
Engine Improvements
There are several technologies that could be used to improve the efficiency of diesel engines used in tractors.  Details of the engine technologies, adoption rates, and overall fuel consumption and CO2 emission reductions are included in Section II.D.  The proposed heavy-duty tractor engine standards would lead to a 1.5 percent reduction in 2021MY, a 3.5 percent reduction in 2024MY, and a 4 percent reduction in 2027MY.  These reductions would show up in the fuel map used in GEM.
Aerodynamics
The aerodynamic packages are categorized as Bin I, Bin II, Bin III, Bin IV, Bin V, Bin VI, or Bin VII based on the wind averaged drag aerodynamic performance determined through testing conducted by the manufacturer.  A more complete description of these aerodynamic packages is included in Chapter 2 of the draft RIA.  In general, the proposed CdA values for each package and tractor subcategory were developed through EPA's coastdown testing of tractor-trailer combinations, the 2010 NAS report, and SAE papers.  
Tire Rolling Resistance
The proposed rolling resistance coefficient target for Phase 2 was developed from SmartWay's tire testing to develop the SmartWay certification, testing a selection of tractor tires as part of the Phase 1 and Phase 2 programs, and from 2014 MY certification data.  Even though the coefficient of tire rolling resistance comes in a range of values, to analyze this range, the tire performance was evaluated at four levels for both steer and drive tires, as determined by the agencies.  The four levels are the baseline (average) from 2010, Level I and Level 2 from Phase 1, and Level 3 that achieves an additional 25 percent improvement over Level 2.  The Level 1 rolling resistance performance represents the threshold used to develop SmartWay designated tires for long haul tractors.  The Level 2 threshold represents an incremental step for improvements beyond today's SmartWay level and represents the best in class rolling resistance of the tires we tested.  The Level 3 values represent the long-term rolling resistance value that Michelin predicts could be achieved in the 2025 timeframe.  Given the multiple year phase-in of the standards, the agencies expect that tire manufacturers will continue to respond to demand for more efficient tires and will offer increasing numbers of tire models with rolling resistance values significantly better than today's typical low rolling resistance tires.  The tire rolling resistance level assumed to meet the 2017 MY Phase 1 standard high roof sleeper cab is considered to be a weighted average of 10 percent baseline rolling resistance, 70 percent Level 1, and 20 percent Level 2.  The tire rolling resistance to meet the 2017MY Phase 1 standards for the high roof day cab, low roof sleeper cab, and mid roof sleeper cab includes 30 percent baseline, 60 percent Level 1 and 10 percent Level 2.  Finally, the low roof day cab 2017MY standard can be met with a weighted average rolling resistance consisting of 40 percent baseline, 50 percent Level 1, and 10 percent Level 2.
Idle Reduction
The benefits for the extended idle reductions were developed from literature, SmartWay work, and the 2010 NAS report. Additional details regarding the comments and calculations are included in draft RIA Section 2.4.
Transmission
The benefits for automated manual, automatic, and dual clutch transmissions were developed from literature and from simulation modeling conducted by Southwest Research Institute.  The benefit of these transmissions is proposed to be set to a two percent improvement over a manual transmission due to the automation of the gear shifting.
Drivetrain
The reduction in friction due to low viscosity axle lubricants is set to 0.5 percent.  6x4 and 4x2 axle configurations lead to a 2.5 percent improvement in vehicle efficiency.  Downspeeding would be as demonstrated through the Phase 2 GEM inputs of transmission gear ratio, drive axle ratio, and tire diameter.  Downspeeding is projected to improve the fuel consumption by 1.8 percent.
Accessories and Other Technologies
Compared to 2017MY air conditioners, air conditioners with improved efficiency compressors will reduce CO2 emissions by 0.5 percent.  Improvements in accessories, such as power steering, can lead to an efficiency improvement of 1 percent over the 2017MY baseline.  Based on literature information, intelligent controls such as predictive cruise control will reduce CO2 emissions by 2 percent while automatic tire inflation systems improve fuel consumption by 1 percent by keeping tire rolling resistance to its optimum based on inflation pressure.
Weight Reduction
The weight reductions were developed from tire manufacturer information, the Aluminum Association, the Department of Energy, SABIC and TIAX, as discussed above in Section II.B.3.e. 
Vehicle Speed Limiter
The agencies did not consider the availability of vehicle speed limiter technology in setting the Phase 1 stringency levels, and again did not consider the availability of the technology in developing regulatory alternatives for Phase 2.   However, as described in more detail above, speed limiters could be an effective means for achieving compliance, if employed on a voluntary basis. 
Summary of Technology Performance
Table III-7 describes the performance levels for the range of Class 7 and 8 tractor vehicle technologies.  
Table III-7 Proposed Phase 2 Technology Inputs
                                       
                                    Class 7
                                    Class 8
                                       
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                       
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                    Engine
                                       
                           2021MY 11L Engine  350 HP
                           2021MY 11L Engine 350 HP
                           2021MY 11L Engine 350 HP
                           2021MY 15L Engine  455 HP
                           2021MY 15L Engine 455 HP
                           2021MY 15L Engine 455 HP
                           2021MY 15L Engine 455 HP
                           2021MY 15L Engine 455 HP
                           2021MY 15L Engine 455 HP
                          Aerodynamics (CdA in m[2])
                                     Bin I
                                      5.3
                                      6.7
                                      7.6
                                      5.3
                                      6.7
                                      7.6
                                      5.3
                                      6.7
                                      7.4
                                    Bin II
                                      4.8
                                      6.2
                                      7.1
                                      4.8
                                      6.2
                                      7.1
                                      4.8
                                      6.2
                                      6.9
                                    Bin III
                                      4.3
                                      5.7
                                      6.5
                                      4.3
                                      5.7
                                      6.5
                                      4.3
                                      5.7
                                      6.3
                                    Bin IV
                                      4.0
                                      5.4
                                      5.8
                                      4.0
                                      5.4
                                      5.8
                                      4.0
                                      5.4
                                      5.6
                                     Bin V
                                      N/A
                                      N/A
                                      5.3
                                      N/A
                                      N/A
                                      5.3
                                      N/A
                                      N/A
                                      5.1
                                    Bin VI
                                      N/A
                                      N/A
                                      4.9
                                      N/A
                                      N/A
                                      4.9
                                      N/A
                                      N/A
                                      4.7
                                    Bin VII
                                      N/A
                                      N/A
                                      4.5
                                      N/A
                                      N/A
                                      4.5
                                      N/A
                                      N/A
                                      4.3
                      Steer Tires (CRR in kg/metric ton)
                                     Base
                                      7.8
                                      7.8
                                      7.8
                                      7.8
                                      7.8
                                      7.8
                                      7.8
                                      7.8
                                      7.8
                                    Level 1
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                    Level 2
                                      5.7
                                      5.7
                                      5.7
                                      5.7
                                      5.7
                                      5.7
                                      5.7
                                      5.7
                                      5.7
                                    Level 3
                                      4.3
                                      4.3
                                      4.3
                                      4.3
                                      4.3
                                      4.3
                                      4.3
                                      4.3
                                      4.3
                      Drive Tires (CRR in kg/metric ton)
                                     Base
                                      8.2
                                      8.2
                                      8.2
                                      8.2
                                      8.2
                                      8.2
                                      8.2
                                      8.2
                                      8.2
                                    Level 1
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                    Level 2
                                      6.0
                                      6.0
                                      6.0
                                      6.0
                                      6.0
                                      6.0
                                      6.0
                                      6.0
                                      6.0
                                    Level 3
                                      4.5
                                      4.5
                                      4.5
                                      4.5
                                      4.5
                                      4.5
                                      4.5
                                      4.5
                                      4.5
                         Idle Reduction (% reduction)
                                      APU
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      5%
                                      5%
                                      5%
                                     Other
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      7%
                                      7%
                                      7%
                        Transmission Type (% reduction)
                                    Manual
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      AMT
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                     Auto
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                  Dual Clutch
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                            Driveline (% reduction)
                                Axle Lubricant
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                6x2 or 4x2 Axle
                                     2.5%
                                     2.5%
                                     2.5%
                                     2.5%
                                     2.5%
                                     2.5%
                                     2.5%
                                     2.5%
                                     2.5%
                                   Downspeed
                                     1.8%
                                     1.8%
                                     1.8%
                                     1.8%
                                     1.8%
                                     1.8%
                                     1.8%
                                     1.8%
                                     1.8%
                     Accessory Improvements (% reduction)
                                     A/C 
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                                     0.5%
                               Electric Access.
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                Predefined Off-Cycle Technologies (% reduction)
                           Predictive Cruise Control
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                        Automated Tire Inflation System
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%
                                      1%

    Tractor Technology Adoption Rates
As explained above, tractor manufacturers often introduce major product changes together, as a package.  In this manner the manufacturers can optimize their available resources, including engineering, development, manufacturing and marketing activities to create a product with multiple new features.  In addition, manufacturers recognize that a truck design will need to remain competitive over the intended life of the design and meet future regulatory requirements.  In some limited cases, manufacturers may implement an individual technology outside of a vehicle's redesign cycle.  
With respect to the levels of technology adoption used to develop the proposed HD Phase 2 standards, NHTSA and EPA established technology adoption constraints. The first type of constraint was established based on the application of fuel consumption and CO2 emission reduction technologies into the different types of tractors.  For example, extended idle reduction technologies are limited to Class 8 sleeper cabs using the reasonable assumption that day cabs are not used for overnight hoteling.  A second type of constraint was applied to most other technologies and limited their adoption based on factors reflecting the real world operating conditions that some combination tractors encounter.  This second type of constraint was applied to the aerodynamic, tire, powertrain, and vehicle speed limiter technologies.  Table III-8,
Table III-9, and Table III-10, specify the adoption rates that EPA and NHTSA used to develop the proposed standards.  
NHTSA and EPA believe that within each of these individual vehicle categories there are particular applications where the use of the identified technologies would be either ineffective or not technically feasible.  For example, the agencies are not predicating the proposed standards on the use of full aerodynamic vehicle treatments on 100 percent of tractors because we know that in many applications (for example gravel truck engaged in local aggregate delivery) the added weight of the aerodynamic technologies will increase fuel consumption and hence CO2 emissions to a greater degree than the reduction that would be accomplished from the more aerodynamic nature of the tractor.  
Aerodynamics Adoption Rate
The impact of aerodynamics on a tractor-trailer's efficiency increases with vehicle speed.  Therefore, the usage pattern of the vehicle will determine the benefit of various aerodynamic technologies.  Sleeper cabs are often used in line haul applications and drive the majority of their miles on the highway travelling at speeds greater than 55 mph.  The industry has focused aerodynamic technology development, including SmartWay tractors, on these types of trucks.  Therefore the agencies are proposing the most aggressive aerodynamic technology application to this regulatory subcategory.  All of the major manufacturers today offer at least one SmartWay sleeper cab tractor model, which is represented as Bin III aerodynamic performance.  The proposed aerodynamic adoption rate for Class 8 high roof sleeper cabs in 2027 (i.e., the degree of technology adoption on which the stringency of the proposed standard is premised) consists of 20 percent of Bin IV, 35 percent Bin V, 20 percent Bin VI, and 5 percent Bin VII reflecting our assessment of the fraction of tractors in this segment that could successfully apply these aerodynamic packages with this amount of lead time.  We believe that there is sufficient lead time to develop aerodynamic tractors that can move the entire high roof sleeper cab aerodynamic performance to be as good as or better than today's SmartWay designated tractors.  The changes required for Bin IV and better performance reflect the kinds of improvements projected in the Department of Energy's SuperTruck program.  That program assumes that such systems can be demonstrated on vehicles by 2017.  In this case, the agencies are projecting that truck manufacturers would be able to begin implementing these aerodynamic technologies as early as 2021 MY on a limited scale.  Importantly, our averaging, banking and trading provisions provide manufacturers with the flexibility (and incentive) to implement these technologies over time even though the standard changes in a single step.  
The aerodynamic adoption rates used to develop the proposed standards for the other tractor regulatory categories are less aggressive than for the Class 8 sleeper cab high roof.  Aerodynamic improvements through new tractor designs and the development of new aerodynamic components is an inherently slow and iterative process.  The agencies recognize that there are tractor applications which require on/off-road capability and other truck functions which restrict the type of aerodynamic equipment applicable.  We also recognize that these types of trucks spend less time at highway speeds where aerodynamic technologies have the greatest benefit.  The 2002 VIUS data ranks trucks by major use.  The heavy trucks usage indicates that up to 35 percent of the trucks may be used in on/off-road applications or heavier applications.  The uses include construction (16 percent), agriculture (12 percent), waste management (5 percent), and mining (2 percent).  Therefore, the agencies analyzed the technologies to evaluate the potential restrictions that would prevent 100 percent adoption of more advanced aerodynamic technologies for all of the tractor regulatory subcategories.
As discussed in Section III.C.2, the agencies propose to increase the number of aerodynamic bins for low and mid roof tractors from the two levels adopted in Phase 1 to four levels in Phase 2.  The agencies propose to increase the number of bins for these tractors to reflect the actual range of aerodynamic technologies effective in low and mid roof tractor applications.  The aerodynamic improvements to the bumper, hood, windshield, mirrors, and doors are developed for the high roof tractor application and then carried over into the low and mid roof applications.  
Low Rolling Resistance Tire Adoption Rate
For the tire manufacturers to further reduce tire rolling resistance, the manufacturers must consider several performance criteria that affect tire selection.  The characteristics of a tire also influence durability, traction control, vehicle handling, comfort, and retreadability.  A single performance parameter can easily be enhanced, but an optimal balance of all the criteria will require improvements in materials and tread design at a higher cost, as estimated by the agencies.  Tire design requires balancing performance, since changes in design may change different performance characteristics in opposing directions.  Similar to the discussion regarding lesser aerodynamic technology application in tractor segments other than sleeper cab high roof, the agencies believe that the proposed standards should not be premised on 100 percent application of Level IV tires in all tractor segments given the potential interference with vehicle utility that could result.    
Weight Reduction Technology Adoption Rate
Unlike in HD Phase 1, the agencies propose setting the 2021 through 2027 model year tractor standards without using weight reduction as a technology to demonstrate the feasibility.  However, as described in Section III.C.2 below, the agencies are proposing an expanded list of weight reduction options which could be input into the GEM by the manufacturers to reduce their certified CO2 emission and fuel consumption levels.  The agencies view weight reduction as a technology with a high cost that offers a small benefit in the tractor sector.  For example, our estimate of a 400 pound weight reduction would cost $2,050 (2012$) in 2021MY, but offers a 0.3 percent reduction in fuel consumption and CO2 emissions.  
Idle Reduction Technology Adoption Rate
Idle reduction technologies provide significant reductions in fuel consumption and CO2 emissions for Class 8 sleeper cabs and are available on the market today.  There are several different technologies available to reduce idling.  These include APUs, diesel fired heaters, and battery powered units.  Our discussions with manufacturers indicate that idle technologies are sometimes installed in the factory, but it is also a common practice to have the units installed after the sale of the truck.  We would like to continue to incentivize this practice and to do so in a manner that the emission reductions associated with idle reduction technology occur in use.  Therefore, as adopted in Phase 1, we are allowing only idle emission reduction technologies which include an automatic engine shutoff (AES) with some override provisions.  However, we welcome comment on other approaches that would appropriately quantify the reductions that would be experienced in the real world.  
We propose an overall 90 percent adoption rate for this technology for Class 8 sleeper cabs.  The agencies are unaware of reasons why AES with extended idle reduction technologies could not be applied to this high fraction of tractors with a sleeper cab, except those deemed a vocational tractor, in the available lead time.  
The agencies are interested in extending the idle reduction benefits beyond Class 8 sleepers, to day cabs. The agencies reviewed literature to quantify the amount of idling which is conducted outside of hoteling operations.  One study, conducted by Argonne National Laboratory, identified several different types of trucks which might idle for extended amounts of time during the work day.  Idling may occur during the delivery process, queuing at loading docks or border crossings, during power take off operations, or to provide comfort during the work day.  However, the study provided only "rough estimates" of the idle time and energy use for these vehicles.  The agencies are not able to appropriately develop a baseline of workday idling for day cabs and identify the percent of this idling which could be reduced through the use of AES.  We welcome comment and data on quantifying the effectiveness of AES on day cabs.  
Vehicle Speed Limiter Adoption Rate
As adopted in Phase 1, we propose to continue the approach where vehicle speed limiters may be used as a technology to meet the proposed standard.  In setting the proposed standard, however, we assumed a zero percent adoption rate of vehicle speed limiters.  Although we believe vehicle speed limiters are a simple, easy to implement, and inexpensive technology, we want to leave the use of vehicles speed limiters to the truck purchaser.  Since truck fleets purchase tractors today with owner-set vehicle speed limiters, we considered not including VSLs in our compliance model.  However, we have concluded that we should allow the use of VSLs that cannot be overridden by the operator as a means of compliance for vehicle manufacturers that wish to offer it and truck purchasers that wish to purchase the technology.  In doing so, we are providing another means of meeting that standard that can lower compliance cost and provide a more optimal vehicle solution for some truck fleets.  For example, a local beverage distributor may operate trucks in a distribution network of primarily local roads.  Under those conditions, aerodynamic fairings used to reduce aerodynamic drag provide little benefit due to the low vehicle speed while adding additional mass to the vehicle.  A vehicle manufacturer could choose to install a VSL set at 55 mph for this customer.  The resulting tractor would be optimized for its intended application and would be fully compliant with our program all at a lower cost to the ultimate tractor purchaser.  
As in Phase 1, we have chosen not to base the proposed standards on performance of VSLs because of concerns about how to set a realistic adoption rate that avoids unintended adverse impacts.  Although we expect there would be some use of VSL, currently it is used when the fleet involved decides it is feasible and practicable and increases the overall efficiency of the freight system for that fleet operator.  To date, the compliance data provided by manufacturers indicate that none of the tractor configurations include a tamper-proof VSL setting less than 65 mph.  At this point the agencies are not in a position to determine in how many additional situations use of a VSL would result in similar benefits to overall efficiency or how many customers would be willing to accept a tamper-proof VSL setting.  As discussed in Section III.E.2.f below, we welcome comment on suggestions to modify the tamper-proof requirement while maintaining assurance that the speed limiter is used in-use throughout the life of the vehicle.  We are not able at this time to quantify the potential loss in utility due to the use of VSLs.  Absent this information, we cannot make a determination regarding the reasonableness of setting a standard based on a particular VSL level.  Therefore, the agencies are not premising the proposed standards on use of VSL, and instead would continue to rely on the industry to select VSL when circumstances are appropriate for its use.  The agencies have not included either the cost or benefit due to VSLs in analysis of the proposed program's costs and benefits, therefore it remains a significant flexibility for manufacturers to choose.   
Summary of the Adoption Rates used to Determine the Proposed Standards
Table III-8,
Table III-9 and Table III-10 provide the adoption rates of each technology broken down by weight class, cab configuration, and roof height.
Table III-8 Technology Adoption Rates for Class 7 and 8 Tractors for Determining the Proposed 2021 MY Standards
                                       
                                    Class 7
                                    Class 8
                                       
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                       
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                       2021MY Engine Technology Package
                                       
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                 Aerodynamics 
                                     Bin I
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                    Bin II
                                      75%
                                      75%
                                      0%
                                      75%
                                      75%
                                      0%
                                      75%
                                      75%
                                      0%
                                    Bin III
                                      25%
                                      25%
                                      40%
                                      25%
                                      25%
                                      40%
                                      25%
                                      25%
                                      40%
                                    Bin IV
                                      0%
                                      0%
                                      35%
                                      0%
                                      0%
                                      35%
                                      0%
                                      0%
                                      35%
                                     Bin V
                                      N/A
                                      N/A
                                      20%
                                      N/A
                                      N/A
                                      20%
                                      N/A
                                      N/A
                                      20%
                                    Bin VI
                                      N/A
                                      N/A
                                      5%
                                      N/A
                                      N/A
                                      5%
                                      N/A
                                      N/A
                                      5%
                                    Bin VII
                                      N/A
                                      N/A
                                      0%
                                      N/A
                                      N/A
                                      0%
                                      N/A
                                      N/A
                                      0%
                                 Steer Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                    Level 2
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                    Level 3
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                 Drive Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                    Level 2
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                    Level 3
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                           Extended Idle Reduction 
                                      APU
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      80%
                                      80%
                                      80%
                              Transmission Type 
                                    Manual
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      AMT
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                     Auto
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                  Dual Clutch
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                  Driveline 
                                Axle Lubricant
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                6x2 or 4x2 Axle
                                       
                                       
                                       
                                      10%
                                      10%
                                      20%
                                      10%
                                      10%
                                      20%
                                   Downspeed
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                            Accessory Improvements 
                                      A/C
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                               Electric Access.
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                      Predefined Off-Cycle Technologies 
                           Predictive Cruise Control
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                        Automated Tire Inflation System
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%

Table III-9 Technology Adoption Rates for Class 7 and 8 Tractors for Determining the Proposed 2024 MY Standards
                                       
                                    Class 7
                                    Class 8
                                       
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                       
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                       2024 MY Engine Technology Package
                                       
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                 Aerodynamics 
                                     Bin I
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                    Bin II
                                      60%
                                      60%
                                      0%
                                      60%
                                      60%
                                      0%
                                      60%
                                      60%
                                      0%
                                    Bin III
                                      38%
                                      38%
                                      30%
                                      38%
                                      38%
                                      30%
                                      38%
                                      38%
                                      30%
                                    Bin IV
                                      2%
                                      2%
                                      30%
                                      2%
                                      2%
                                      30%
                                      2%
                                      2%
                                      30%
                                     Bin V
                                      N/A
                                      N/A
                                      25%
                                      N/A
                                      N/A
                                      25%
                                      N/A
                                      N/A
                                      25%
                                    Bin VI
                                      N/A
                                      N/A
                                      13%
                                      N/A
                                      N/A
                                      13%
                                      N/A
                                      N/A
                                      13%
                                    Bin VII
                                      N/A
                                      N/A
                                      2%
                                      N/A
                                      N/A
                                      2%
                                      N/A
                                      N/A
                                      2%
                                 Steer Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                    Level 2
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                    Level 3
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                 Drive Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                    Level 2
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                    Level 3
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                           Extended Idle Reduction 
                                      APU
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      90%
                                      90%
                                      90%
                              Transmission Type 
                                    Manual
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      AMT
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                     Auto
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                  Dual Clutch
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                  Driveline 
                                Axle Lubricant
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                6x2 or 4x2 Axle
                                       
                                       
                                       
                                      20%
                                      20%
                                      60%
                                      20%
                                      20%
                                      60%
                                   Downspeed
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                 Direct Drive
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                            Accessory Improvements 
                                      A/C
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                               Electric Access.
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                      Predefined Off-Cycle Technologies 
                           Predictive Cruise Control
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                        Automated Tire Inflation System
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%

Table III-10 Technology Adoption Rates for Class 7 and 8 Tractors for Determining the Proposed 2027 MY Standards
                                       
                                    Class 7
                                    Class 8
                                       
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                       
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                       2027 MY Engine Technology Package
                                       
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                 Aerodynamics 
                                     Bin I
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                    Bin II
                                      50%
                                      50%
                                      0%
                                      50%
                                      50%
                                      0%
                                      50%
                                      50%
                                      0%
                                    Bin III
                                      40%
                                      40%
                                      20%
                                      40%
                                      40%
                                      20%
                                      40%
                                      40%
                                      20%
                                    Bin IV
                                      10%
                                      10%
                                      20%
                                      10%
                                      10%
                                      20%
                                      10%
                                      10%
                                      20%
                                     Bin V
                                      N/A
                                      N/A
                                      35%
                                      N/A
                                      N/A
                                      35%
                                      N/A
                                      N/A
                                      35%
                                    Bin VI
                                      N/A
                                      N/A
                                      20%
                                      N/A
                                      N/A
                                      20%
                                      N/A
                                      N/A
                                      20%
                                    Bin VII
                                      N/A
                                      N/A
                                      5%
                                      N/A
                                      N/A
                                      5%
                                      N/A
                                      N/A
                                      5%
                                 Steer Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                    Level 2
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                    Level 3
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                 Drive Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                    Level 2
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                    Level 3
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                           Extended Idle Reduction 
                                      APU
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      90%
                                      90%
                                      90%
                              Transmission Type 
                                    Manual
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      AMT
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                     Auto
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                  Dual Clutch
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                  Driveline 
                                Axle Lubricant
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                   6x2 Axle
                                       
                                       
                                       
                                      20%
                                      20%
                                      60%
                                      20%
                                      20%
                                      60%
                                   Downspeed
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                 Direct Drive
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                            Accessory Improvements 
                                      A/C
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                               Electric Access.
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                      Predefined Off-Cycle Technologies 
                           Predictive Cruise Control
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                        Automated Tire Inflation System
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%

     Derivation of the Proposed Tractor Standards
The agencies used the technology effectiveness inputs and technology adoption rates to develop GEM inputs to derive the proposed HD Phase 2 fuel consumption and CO2 emissions standards for each subcategory of Class 7 and 8 combination tractors.  Note that we have analyzed one technology pathway for each proposed level of stringency, but manufacturers would be free to use any combination of technology to meet the standards, and with the flexibility of averaging, banking and trading, to meet the standard on average.  The agencies derived a scenario tractor for each subcategory by weighting the individual GEM input parameters included in Table III-7 with the adoption rates in Table III-8, 
Table III-9, and Table III-10.  For example, the proposed CdA value for a 2021MY Class 8 Sleeper Cab High Roof scenario case was derived as 40 percent times 6.3 plus 35 percent times 5.6 plus 20 percent times 5.1 plus 5 percent times 4.7, which is equal to a CdA of 5.74 m[2].  Similar calculations were made for tire rolling resistance, transmission types, idle reduction, and other technologies.  To account for the proposed engine standards and engine technologies, the agencies assumed a compliant engine fuel map in GEM.  The agencies then ran GEM with a single set of vehicle inputs, as shown in Table III-11, to derive the proposed standards for each subcategory.  Additional detail is provided in the draft RIA Chapter 2.  
Table III-11 GEM Inputs for the Proposed 2021MY Class 7 and 8 Tractor Standard Setting
                                    Class 7
                                    Class 8
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                    Engine
                           2021MY 11L Engine  350 HP
                           2021MY 11L Engine 350 HP
                           2021MY 11L Engine 350 HP
                           2021MY 15L Engine  455 HP
                           2021MY 15L Engine 455 HP
                           2021MY 15L Engine 455 HP
                           2021MY 15L Engine 455 HP
                           2021MY 15L Engine 455 HP
                           2021MY 15L Engine 455 HP
                          Aerodynamics (CdA in m[2])
                                     4.68
                                     6.08
                                     5.94
                                     4.68
                                     6.08
                                     5.94
                                     4.68
                                     6.08
                                     5.74
                      Steer Tires (CRR in kg/metric ton)
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                      Drive Tires (CRR in kg/metric ton)
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                                      6.6
                Extended Idle Reduction Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                     2.5%
                                     2.5%
                                     2.5%
             Transmission = 10 speed Automated Manual Transmission
   Gear Ratios = 12.8, 9.25, 6.76, 4.90, 3.58, 2.61, 1.89, 1.38, 1.00, 0.73
                            Drive axle Ratio = 3.55
                        6x2 Axle Weighted Effectiveness
                                     N/A 
                                      N/A
                                      N/A
                                     0.3%
                                     0.3%
                                     0.5%
                                     0.3%
                                     0.3%
                                     0.5%
                     Low Friction Axle Lubrication = 0.1%
                          Transmission benefit = 1.1%
                        Predictive Cruise Control =0.4%
                         Accessory Improvements = 0.1%
                Air Conditioner Efficiency Improvements = 0.1%
                    Automatic Tire Inflation Systems = 0.2%
                          Weight Reduction = 0 pounds


Table III-12 GEM Inputs for the Proposed 2024MY Class 7 and 8 Tractor Standard Setting
                                    Class 7
                                    Class 8
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                    Engine
                           2024MY 11L Engine  350 HP
                           2024MY 11L Engine 350 HP
                           2024MY 11L Engine 350 HP
                           2024MY 15L Engine  455 HP
                           2024MY 15L Engine 455 HP
                           2024MY 15L Engine 455 HP
                           2024MY 15L Engine 455 HP
                           2024MY 15L Engine 455 HP
                           2024MY 15L Engine 455 HP
                          Aerodynamics (CdA in m[2])
                                     4.59
                                     5.99
                                     5.74
                                     4.59
                                     5.99
                                     5.74
                                     4.59
                                     5.99
                                     5.54
                      Steer Tires (CRR in kg/metric ton)
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                      Drive Tires (CRR in kg/metric ton)
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                Extended Idle Reduction Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      3%
                                      3%
                                      3%
             Transmission = 10 speed Automated Manual Transmission
   Gear Ratios = 12.8, 9.25, 6.76, 4.90, 3.58, 2.61, 1.89, 1.38, 1.00, 0.73
                            Drive axle Ratio = 3.36
                        6x2 Axle Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                     0.5%
                                     0.5%
                                     1.5%
                                     0.5%
                                     0.5%
                                     1.5%
                     Low Friction Axle Lubrication = 0.2%
                          Transmission benefit = 1.6%
                        Predictive Cruise Control =0.8%
                         Accessory Improvements = 0.2%
                Air Conditioner Efficiency Improvements = 0.1%
                    Automatic Tire Inflation Systems = 0.4%
                          Weight Reduction = 0 pounds
   Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs

Table III-13 GEM Inputs for the Proposed 2027MY Class 7 and 8 Tractor Standard Setting
                                    Class 7
                                    Class 8
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                    Engine
                           2027MY 11L Engine  350 HP
                           2027MY 11L Engine 350 HP
                           2027MY 11L Engine 350 HP
                           2027MY 15L Engine  455 HP
                           2027MY 15L Engine 455 HP
                           2027MY 15L Engine 455 HP
                           2027MY 15L Engine 455 HP
                           2027MY 15L Engine 455 HP
                           2027MY 15L Engine 455 HP
                          Aerodynamics (CdA in m[2])
                                     4.52
                                     5.92
                                     5.52
                                     4.52
                                     5.92
                                     5.52
                                     4.52
                                     5.92
                                     5.32
                      Steer Tires (CRR in kg/metric ton)
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                      Drive Tires (CRR in kg/metric ton)
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                Extended Idle Reduction Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      3%
                                      3%
                                      3%
             Transmission = 10 speed Automated Manual Transmission
   Gear Ratios = 12.8, 9.25, 6.76, 4.90, 3.58, 2.61, 1.89, 1.38, 1.00, 0.73
                            Drive axle Ratio = 3.2
                        6x2 Axle Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                     0.5%
                                     0.5%
                                     1.5%
                                     0.5%
                                     0.5%
	1.5%
                     Low Friction Axle Lubrication = 0.2%
                          Transmission benefit = 1.8%
                        Predictive Cruise Control =0.8%
                         Accessory Improvements = 0.3%
                Air Conditioner Efficiency Improvements = 0.2%
                    Automatic Tire Inflation Systems = 0.4%
                          Weight Reduction = 0 pounds
   Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs

The proposed level of the 2027 model year standards, in addition to the phase-in standards in model years 2021 and 2024 for each subcategory is included in Table III-14.  

Table III-14 Proposed 2021, 2024, and 2027 Model Year Tractor Standards
2021 Model Year CO2 Grams per Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
97
78
70
Mid Roof
107
84
78
High Roof
109
86
77
2021 Model Year Gallons of Fuel per 1,000 Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
9.5285
7.5639
6.8762
Mid Roof
10.5108
8.2515
7.6621
High Roof
10.7073
8.4479
7.5639
2024 Model Year CO2 Grams per Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
90
72
64
Mid Roof
100
78
71
High Roof
101
79
70
2024 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
8.8409
7.0727
6.2868
Mid Roof
9.8232
7.5639
6.9745
High Roof
9.9214
7.7603
6.8762
2027 Model Year CO2 Grams per Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
87
70
62
Mid Roof
96
76
69
High Roof
96
76
67
2027 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
8.5462
6.8762
6.0904
Mid Roof
9.4303
7.4656
6.7780
High Roof
9.4303
7.4656
6.5815

A summary of the draft technology package costs is included in Table III-15 through Table III-17 for MYs 2021, 2024, and 2027, respectively, with additional details available in the draft RIA Chapter 2.12.
Table III-15 Class 7 and 8 Tractor Technology Incremental Costs in the 2021 Model Year[a][,b] 
Preferred Alternative vs. the Less Dynamic Baseline (2012$ per vehicle)

                                    Class 7
                                    Class 8

                                    Day Cab
                                    Day Cab
                                  Sleeper Cab

Low/Mid Roof
High Roof
Low/ Mid Roof
High Roof
Low Roof
Mid Roof
High Roof
Engine[c]
                                                                           $314
                                                                           $314
                                                                           $314
                                                                           $314
                                                                           $314
                                                                           $314
                                                                           $314
Aerodynamics
                                                                           $687
                                                                           $511
                                                                           $687
                                                                           $511
                                                                           $656
                                                                           $656
                                                                           $535
Tires
                                                                            $49
                                                                             $9
                                                                            $81
                                                                            $15
                                                                            $59
                                                                            $59
                                                                            $15
Tire inflation system
                                                                           $180
                                                                           $180
                                                                           $180
                                                                           $180
                                                                           $180
                                                                           $180
                                                                           $180
Transmission
                                                                         $3,969
                                                                         $3,969
                                                                         $3,969
                                                                         $3,969
                                                                         $3,969
                                                                         $3,969
                                                                         $3,969
Axle & axle lubes
                                                                            $50
                                                                            $50
                                                                            $70
                                                                            $90
                                                                            $70
                                                                            $70
                                                                            $90
Idle reduction with APU
                                                                             $0
                                                                             $0
                                                                             $0
                                                                             $0
                                                                         $2,449
                                                                         $2,449
                                                                         $2,449
Air conditioning
                                                                            $45
                                                                            $45
                                                                            $45
                                                                            $45
                                                                            $45
                                                                            $45
                                                                            $45
Other vehicle technologies
                                                                           $174
                                                                           $174
                                                                           $174
                                                                           $174
                                                                           $174
                                                                           $174
                                                                           $174
Total
                                                                         $5,468
                                                                         $5,252
                                                                         $5,520
                                                                         $5,298
                                                                         $7,916
                                                                         $7,916
                                                                         $7,771
Notes:
[a] Costs shown are for the 2021 model year and are incremental to the costs of a tractor meeting the phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated tractor classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12 in particular).
[c] Engine costs are for a heavy HD diesel engine meant for a combination tractor.


Table III-16 Class 7 and 8 Tractor Technology Incremental Costs in the 2024 Model Year[a][,b] 
Preferred Alternative vs. the Less Dynamic Baseline (2012$ per vehicle)

                                    Class 7
                                    Class 8

                                    Day Cab
                                    Day Cab
                                  Sleeper Cab

Low/Mid Roof
High Roof
Low/ Mid Roof
High Roof
Low Roof
Mid Roof
High Roof
Engine[c]
                                                                           $904
                                                                           $904
                                                                           $904
                                                                           $904
                                                                           $904
                                                                           $904
                                                                           $904
Aerodynamics
                                                                           $744
                                                                           $684
                                                                           $744
                                                                           $684
                                                                           $712
                                                                           $712
                                                                           $723
Tires
                                                                            $47
                                                                            $11
                                                                            $78
                                                                            $18
                                                                            $58
                                                                            $58
                                                                            $18
Tire inflation system
                                                                           $330
                                                                           $330
                                                                           $330
                                                                           $330
                                                                           $330
                                                                           $330
                                                                           $330
Transmission
                                                                         $5,883
                                                                         $5,883
                                                                         $5,883
                                                                         $5,883
                                                                         $5,883
                                                                         $5,883
                                                                         $5,883
Axle & axle lubes
                                                                            $92
                                                                            $92
                                                                           $128
                                                                           $200
                                                                           $128
                                                                           $128
                                                                           $200
Idle reduction with APU
                                                                             $0
                                                                             $0
                                                                             $0
                                                                             $0
                                                                         $2,687
                                                                         $2,687
                                                                         $2,687
Air conditioning
                                                                            $82
                                                                            $82
                                                                            $82
                                                                            $82
                                                                            $82
                                                                            $82
                                                                            $82
Other vehicle technologies
                                                                           $318
                                                                           $318
                                                                           $318
                                                                           $318
                                                                           $318
                                                                           $318
                                                                           $318
Total
                                                                         $8,400
                                                                         $8,304
                                                                         $8,467
                                                                         $8,419
                                                                        $11,102
                                                                        $11,102
                                                                        $11,145
Notes:
[a] Costs shown are for the 2021 model year and are incremental to the costs of a tractor meeting the phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated tractor classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[c] Engine costs are for a heavy HD diesel engine meant for a combination tractor.

Table III-17 Class 7 and 8 Tractor Technology Incremental Costs in the 2027 Model Year[a][,b] 
Preferred Alternative vs. the Less Dynamic Baseline (2012$ per vehicle)

                                    Class 7
                                    Class 8

                                    Day Cab
                                    Day Cab
                                  Sleeper Cab

Low/Mid Roof
High Roof
Low/ Mid Roof
High Roof
Low Roof
Mid Roof
High Roof
Engine[c]
                                                                         $1,698
                                                                         $1,698
                                                                         $1,698
                                                                         $1,698
                                                                         $1,698
                                                                         $1,698
                                                                         $1,698
Aerodynamics
                                                                           $771
                                                                           $765
                                                                           $771
                                                                           $765
                                                                           $733
                                                                           $733
                                                                           $802
Tires
                                                                            $45
                                                                            $10
                                                                            $75
                                                                            $17
                                                                            $56
                                                                            $56
                                                                            $17
Tire inflation system
                                                                           $314
                                                                           $314
                                                                           $314
                                                                           $314
                                                                           $314
                                                                           $314
                                                                           $314
Transmission
                                                                         $6,797
                                                                         $6,797
                                                                         $6,797
                                                                         $6,797
                                                                         $6,797
                                                                         $6,797
                                                                         $6,797
Axle & axle lubes
                                                                            $97
                                                                            $97
                                                                           $131
                                                                           $200
                                                                           $131
                                                                           $131
                                                                           $200
Idle reduction with APU
                                                                             $0
                                                                             $0
                                                                             $0
                                                                             $0
                                                                         $2,596
                                                                         $2,596
                                                                         $2,596
Air conditioning
                                                                           $117
                                                                           $117
                                                                           $117
                                                                           $117
                                                                           $117
                                                                           $117
                                                                           $117
Other vehicle technologies
                                                                           $302
                                                                           $302
                                                                           $302
                                                                           $302
                                                                           $302
                                                                           $302
                                                                           $302
Total
                                                                        $10,140
                                                                        $10,099
                                                                        $10,204
                                                                        $10,209
                                                                        $12,744
                                                                        $12,744
                                                                        $12,842
Notes:
[a] Costs shown are for the 2021 model year and are incremental to the costs of a tractor meeting the phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated tractor classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12 in particular).
[c] Engine costs are for a heavy HD diesel engine meant for a combination tractor.
Proposed Heavy-Haul Tractor Standards
For Phase 2, the agencies propose to add a tenth subcategory to the tractor category for heavy-haul tractors.  The agencies recognize the need for manufacturers to build these types of vehicles for specific applications and believe the appropriate way to prevent penalizing these vehicles is to set separate standards recognizing a heavy-haul vehicle's unique needs, such as requiring a higher horsepower engine or different transmissions.  The agencies are proposing this change in Phase 2 because unlike in Phase 1 the engine, transmission, and drivetrain technologies are included in the technology packages used to determine the stringency of the proposed tractor standards and are included as manufacturer inputs in GEM.  This means that the agencies can adopt a standard reflecting individualized performance of these technologies in particular applications, in this case, heavy-haul tractors, and further, have a means of reliably assessing individualized performance of these technology at certification.  
The typical tractor is designed with a Gross Combined Weight Rating (GCWR) of approximately 80,000 pounds due to the effective weight limit on the federal highway system, except in states with preexisting higher weight limits.  The agencies propose to consider tractors with a GCWR over 120,000 pounds as heavy-haul tractors.  Based on comments received during the development of HD Phase 1 (76 FR 57136-8), the agencies also believe it would be appropriate to further define the heavy-haul vehicle characteristics to differentiate these vehicles from the vehicles in the other nine tractor subcategories.  The two additional requirements would include a total gear reduction greater than or equal to 57:1 and a frame Resisting Bending Moment (RBM) greater than or equal to 2,000,000 in-lbs per rail or rail and liner combination.  Heavy-haul tractors typically require the large gear reduction to provide the torque necessary to start the vehicle moving.  These vehicles also typically require frame rails with extra strength to ensure the ability to haul heavy loads. We welcome comment on the proposed heavy-haul tractor specifications, including whether Gross Vehicle Weight Rating (GVWR) or Gross Axle Weight Rating (GAWR) would be a more appropriate metric to differentiate between a heavy-haul tractor and a typical tractor.
The agencies propose that heavy-haul tractors demonstrate compliance with the proposed standards using the day cab drive cycle weightings of 19 percent transient cycle, 17 percent 55 mph cycle, and 64 percent 65 mph cycle.  We also propose that GEM simulates the heavy-haul tractors with a payload of 43 tons and a total tractor, trailer, and payload weight of 118,500 pounds.  In addition, we propose that the engines installed in heavy-haul tractors meet the proposed tractor engine standards included in 40 CFR 1036.108.  We welcome comments on these proposed specifications.
The agencies recognize that certain technologies used to determine the stringency of the proposed Phase 2 tractor standards are less applicable to heavy-haul tractors.  Heavy-haul tractors are not typically used in the same manner as long-haul tractors with extended highway driving, and therefore would experience less benefit from aerodynamics.  Aerodynamic technologies are very effective at reducing the fuel consumption and GHG emissions of tractors, but only when traveling at highway speeds.  At lower speeds, the aerodynamic technologies may have a detrimental impact due to the potential of added weight.  The agencies therefore are not considering the use of aerodynamic technologies in the development of the proposed Phase 2 heavy-haul tractor standards.  Moreover, because aerodynamics would not play a role in the heavy-haul standards, the agencies propose to combine all of the heavy-haul tractor cab configurations (day and sleeper) and roof heights (low, mid, and high) into a single heavy-haul tractor subcategory.  We welcome comment on this approach.
Certain powertrain and drivetrain components are also impacted during the design of a heavy-haul tractor, including the transmission, axles, and the engine.  Heavy-haul tractors typically require transmissions with 13 or 18 speeds to provide the ratio spread to ensure that the tractor is able to start pulling the load from a stop.  Downsped powertrains are typically not an option for heavy-haul operations because these vehicles require more torque to move the vehicle because of the heavier load.  Finally, due to the loading requirements of the vehicle, it is not likely that a 6x2 axle configuration can be used in heavy-haul applications.
The agencies used the following heavy-haul tractor inputs for developing the proposed 2021, 2024, and 2027 MY standards, as shown in Table III-18 and Table III-19. 
Table III-18 Application Rates for Proposed Heavy-Haul Tractor Standards
                     Heavy-Haul Tractor Application Rates
                                       
                                    2021MY
                                    2024MY
                                    2027MY
                                    Engine
                        2021 MY 15L Engine with 600 HP
                        2024 MY 15L Engine with 600 HP
                        2027 MY 15L Engine with 600 HP
                              Aerodynamics  -  0%
                                  Steer Tires
                                Phase 1 Baseline
                                      5%
                                      5%
                                      5%
                                    Level I
                                      60%
                                      50%
                                      20%
                                    Level 2
                                      25%
                                      30%
                                      50%
                                    Level 3
                                      10%
                                      15%
                                      25%
                                  Drive Tires
                               Phase 1 Baseline
                                      5%
                                      5%
                                      5%
                                    Level I
                                      60%
                                      50%
                                      20%
                                    Level 2
                                      25%
                                      30%
                                      50%
                                    Level 3
                                      10%
                                      15%
                                      25%
                                 Transmission
                                      AMT
                                      40%
                                      50%
                                      50%
                                   Automatic
                                      10%
                                      20%
                                      30%
                                      DCT
                                      5%
                                      10%
                                      10%
                              Other Technologies
                                   6x2 Axle
                                      0%
                                      0%
                                      0%
                         Low Friction Axle Lubrication
                                      20%
                                      40%
                                      40%
                           Predictive Cruise Control
                                      20%
                                      40%
                                      40%
                            Accessory Improvements
                                      10%
                                      20%
                                      30%
                    Air Conditioner Efficiency Improvements
                                      10%
                                      20%
                                      30%
                       Automatic Tire Inflation Systems
                                      20%
                                      40%
                                      40%
                               Weight Reduction
                                      0%
                                       
                                      0%
                                      0%


Table III-19 GEM Inputs for Proposed 2021, 2024 and 2027 MY Heavy-Haul Tractor Standards
                              Heavy-Haul Tractor
                                   Baseline
                                    2021MY
                                    2024MY
                                    2027MY
                    Engine = 2017 MY 15L Engine with 600 HP
                    Engine = 2021 MY 15L Engine with 600 HP
                    Engine = 2024 MY 15L Engine with 600 HP
                    Engine = 2027 MY 15L Engine with 600 HP
                       Aerodynamics (CdA in m[2]) = 5.00
                   Steer Tires (CRR in kg/metric ton) = 7.0
                   Steer Tires (CRR in kg/metric ton) = 6.2
                   Steer Tires (CRR in kg/metric ton) = 6.0
                   Steer Tires (CRR in kg/metric ton) = 5.8
                   Drive Tires (CRR in kg/metric ton) = 7.4
                   Drive Tires (CRR in kg/metric ton) = 6.6
                   Drive Tires (CRR in kg/metric ton) = 6.4
                   Drive Tires (CRR in kg/metric ton) = 6.2
                  Transmission = 13 speed Manual Transmission
Gear Ratios = 12.29, 8.51, 6.05, 4.38, 3.20, 2.29, 1.95, 1.62, 1.38, 1.17, 1.00, 0.86,  0.73
             Transmission = 13 speed Automated Manual Transmission
Gear Ratios = 12.29, 8.51, 6.05, 4.38, 3.20, 2.29, 1.95, 1.62, 1.38, 1.17, 1.00, 0.86,  0.73
             Transmission = 13 speed Automated Manual Transmission
Gear Ratios = 12.29, 8.51, 6.05, 4.38, 3.20, 2.29, 1.95, 1.62, 1.38, 1.17, 1.00, 0.86,  0.73
             Transmission = 13 speed Automated Manual Transmission
Gear Ratios = 12.29, 8.51, 6.05, 4.38, 3.20, 2.29, 1.95, 1.62, 1.38, 1.17, 1.00, 0.86,  0.73
                            Drive axle Ratio = 3.55
                            Drive axle Ratio = 3.55
                            Drive axle Ratio = 3.55
                            Drive axle Ratio = 3.55
                                      N/A
                     6x2 Axle Weighted Effectiveness = 0%
                     6x2 Axle Weighted Effectiveness = 0%
                     6x2 Axle Weighted Effectiveness = 0%
                                      N/A
                     Low Friction Axle Lubrication = 0.1%
                     Low Friction Axle Lubrication = 0.2%
                     Low Friction Axle Lubrication = 0.2%
                                      N/A
                              AMT benefit = 1.1%
                              AMT benefit = 1.8%
                              AMT benefit = 1.8%
                                      N/A
                        Predictive Cruise Control =0.4%
                        Predictive Cruise Control =0.8%
                        Predictive Cruise Control =0.8%
                                      N/A
                         Accessory Improvements = 0.1%
                         Accessory Improvements = 0.2%
                         Accessory Improvements = 0.3%
                                      N/A
                Air Conditioner Efficiency Improvements = 0.1%
                Air Conditioner Efficiency Improvements = 0.1%
                Air Conditioner Efficiency Improvements = 0.2%
                                      N/A
                    Automatic Tire Inflation Systems = 0.2%
                    Automatic Tire Inflation Systems = 0.4%
                    Automatic Tire Inflation Systems = 0.4%
                                      N/A
                          Weight Reduction = 0 pounds
                          Weight Reduction = 0 pounds
                          Weight Reduction = 0 pounds

The baseline 2017 MY heavy-haul tractor would emit 57 grams of CO2 per ton-mile and consume 5.6 gallons of fuel per 1,000 ton-mile.  The agencies propose the heavy-haul standards shown in Table III-20.  We welcome comment on the heavy-haul tractor technology path and standards proposed by the agencies.

Table III-20 Proposed Heavy-Haul Tractor Standards
                              Heavy-Haul Tractor
                                       
                                    2021 MY
                                    2024 MY
                                    2027 MY
                      Grams of CO2 per Ton-Mile Standard
                                      54
                                      52
                                      51
                      Gallons of Fuel per 1,000 Ton-Mile
                                    5.3045
                                    5.1081
                                     5.010
The technology costs associated with the proposed heavy-haul tractor standards are shown below in Table III-21. 
Table III-21 Heavy-Haul Tractor Technology Incremental Costs in the 2021, 2024, and 2027 Model Year[a][,b] 
Preferred Alternative vs. the Less Dynamic Baseline (2012$ per vehicle)

2021 MY
2024 MY
2027 MY
Engine[c]
                                                                           $314
                                                                           $904
                                                                         $1,698
Tires
                                                                            $81
                                                                            $78
                                                                            $75
Tire inflation system
                                                                           $180
                                                                           $330
                                                                           $314
Transmission
                                                                         $3,969
                                                                         $5,883
                                                                         $6,797
Axle & axle lubes
                                                                            $70
                                                                           $128
                                                                           $200
Air conditioning
                                                                            $45
                                                                            $82
                                                                           $117
Other vehicle technologies
                                                                           $174
                                                                           $318
                                                                           $302
Total
                                                                         $4,833
                                                                         $7,723
                                                                         $9,503
Notes:
[a] Costs shown are for the specified model year and are incremental to the costs of a tractor meeting the phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated tractor classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12 in particular).
[c] Engine costs are for a heavy HD diesel engine meant for a combination tractor.

    Consistency of the Proposed Tractor Standards with the Agencies' Legal Authority 
The proposed HD Phase 2 standards are based on adoption rates for technologies that the agencies regard, subject to consideration of public comment,  as the maximum feasible for purposes of EISA Section 32902 (k) and appropriate under CAA Section 202 (a) for the reasons given in Section III.D.2(b) through (d) above; see also draft RIA Chapter 2.4.  The agencies believe these technologies can be adopted at the estimated rates for these standards within the lead time provided, as discussed in draft RIA Chapter 2.  The 2021 and 2024 MY standards are phase-in standards on the path to the 2027 MY standards and were developed using less aggressive application rates and therefore have lower technology package costs than the 2027 MY standards.  Moreover, we project the cost of these technologies would be rapidly recovered by operators due to the associated fuel savings, as shown in the payback analysis included in Section IX below.  The cost per tractor to meet the proposed 2027 MY standards is projected to range between $10,000 and $13,000 (much or all of this would be mitigated by the fuel savings during the first two years of ownership).  The agencies note that while the projected costs are significantly greater than the costs projected for Phase 1, we still consider that cost to be reasonable, especially given the relatively short payback period.  In this regard the agencies note that the estimated payback period for tractors of less than two years is itself shorter than the estimated payback period for light duty trucks in the 2017-2025 light duty greenhouse gas standards.  That period was slightly over three years, see 77 FR 62926-27, which EPA found to be a highly reasonable given the usual period of ownership of light trucks is typically five years.  The same is true here.  Ownership of new tractors is customarily four to six years, meaning that the greenhouse gas and fuel consumption technologies pay for themselves early on and the purchaser sees overall savings in succeeding years  -  while still owning the vehicle.  The agencies note further that the costs for each subcategory are relatively proportionate; that is, costs of any single tractor subcategory are not disproportionately higher (or lower) than any other.  Although the proposal is technology-forcing (especially with respect to aerodynamic and tire rolling resistance improvements), the agencies believe that manufacturers retain leeway to develop alternative compliance paths, increasing the likelihood of the standards' successful implementation.  The agencies also regard these reductions as cost-effective, even without considering payback period.  The agencies estimate the cost per metric ton of CO2eq reduction without considering fuel savings to be $20 in 2030, which compares favorably with the cost per ton of $142 per ton (in 2030) the agencies found to be reasonable for light duty trucks.  See 77 FR 62922.  The proposed phase-in 2021 and 2024 MY standards are less stringent and less costly than the proposed 2027 MY standards. For these reasons, and because the agencies have carefully considered lead time, EPA believes they are also reasonable under Section 202(a) of the CAA.  Given that the agencies believe the proposed standards are technically feasible, are highly cost effective, and highly cost effective  when accounting for the fuel savings, and have no apparent adverse potential impacts (e.g., there are no projected negative impacts on safety or vehicle utility), the proposed standards appear to represent a reasonable choice under Section 202(a) of the CAA and the maximum feasible under NHTSA's EISA authority at 49 U.S.C. 32902(k)(2).  
Based on the information before the agencies, we currently believe that Alternative 3 would be maximum feasible and reasonable for the tractor segment for the model years in question.  The agencies believe Alternative 4 has potential to be the maximum feasible and reasonable alternative; however, based on the evidence currently before us, EPA and NHTSA have outstanding questions regarding relative risks and benefits of Alternative 4 due to the timeframe envisioned by the alternative.  Alternative 3 is generally designed to achieve the levels of fuel consumption and GHG reduction that Alternative 4 would achieve, but with several years of additional lead-time  -  i.e., the Alternative 3 standards would end up in the same place as the Alternative 4 standards, but several years later, meaning that manufacturers could, in theory, apply new technology at a more gradual pace and with greater flexibility. 
    Alternative Tractor Standards Considered
The agencies developed and considered other alternative levels of stringency for the Phase 2 program.  The results of the analysis of these alternatives are discussed below in Section X of the preamble.  For tractors, the agencies developed the following alternatives as shown in Table III-22.
Table III-22 Summary of Alternatives Considered for the Proposed Rulemaking
Alternative 1
No action alternative
Alternative 2
Less Stringent than the Proposed Alternative applying off-the-shelf technologies
Alternative 3 
(Proposed Alternative)
Proposed Alternative fully phased-in by 2027 MY
Alternative 4
Alternative that pulls ahead the proposed 2027 MY standards to 2024 MY
Alternative 5
Alternative based on very high market adoption of advanced technologies
When evaluating the alternatives, it is necessary to evaluate the impact of a proposed regulation in terms of CO2 emission reductions, fuel consumption reductions, and technology costs.  However, it is also necessary to consider other aspects, such as manufacturers' research and development resources, the impact on purchase price, and the impact on purchasers.  Manufacturers are limited in their ability to develop and implement new technologies due to their human resources and budget constraints.  This has a direct impact on the amount of lead time that is required to meet any new standards.  From the owner/operator perspective, heavy-duty vehicles are a capital investment for firms and individuals so large increases in the upfront cost could impact buying patterns.  Though the dollar value of the lifetime fuel savings will far exceed the upfront technology costs, purchasers often discount future fuel savings for a number of reasons.  The purchaser often has uncertainty in the amount of fuel savings that can be expected for their specific operation due to the diversity of the heavy-duty tractor market.  Although a nationwide perspective that averages out this uncertainty is appropriate for rulemaking analysis, individual operators must consider their potentially narrow operation. In addition, purchasers often put a premium on reliability (because downtime is costly in terms of towing, repair, late deliveries, and lost revenue) and may perceive any new technology as a potential risk with respect to reliability.  Another factor that purchasers consider is the impact of a new technology on the resale market, which can also be impacted by uncertainty.  
The agencies selected the proposed standards over the more stringent alternatives based on consideringthe relevant statutory factors. In 2027, the proposed standards achieve up to a 24 percent reduction in CO2 emissions and fuel consumption compared to a Phase 1 tractor at a per vehicle cost of approximately $13,000.  Alternative 4 achieves the same percent reduction in CO2 emissions and fuel consumption compared to a Phase 1 tractor, but three years earlier, at a per vehicle cost of approximately $14,000.  The alternative standards are projected to result in more emission and fuel consumption reductions from the heavy-duty tractors built in model years 2021 through 2026.  We project the proposed standards to be achievable within known design cycles, and we believe these standards would allow different paths to compliance in addition to the one we outline and cost here.  
The agencies solicit comment on all of these issues and again note the possibility of adopting, in a final action, standards that are more accelerated than those proposed in Alternative 3. The agencies are also assuming that both the proposed standards and Alternative 4 could be accomplished with all changes being made during manufacturers' normal product design cycles.  However, we note that doing so would be more challenging for Alternative 4 and may require accelerated research and development outside of design cycles with attendant increased costs. 
The agencies are especially interested in seeking detailed comments on Alternative 4.  Therefore, we are including the details of the Alternative 4 analysis below.  The adoption rates considered for the 2021 and 2024 MY standards developed for Alternative 4 are shown below in Table III-23 and Table III-24.  The inputs to GEM used to develop the Alternative 4 CO2 and fuel consumption standards are shown below in 
Table III-25 and Table III-26.  The standards associated with Alternative 4 are shown below in Table III-27.  Commenters are encouraged to address all aspects of feasibility analysis, including costs, the likelihood of developing the technology to achieve sufficient relaibility within the proposed lead time, and the extent to which the market could utilize the technology.    
    Derivation of Alternative 4 Tractor Standards
The adoption rates considered for the 2021 and 2024 MY standards developed for Alternative 4 are shown below in Table III-23 and Table III-24.  The inputs to GEM used to develop the Alternative 4 CO2 and fuel consumption standards are shown below in 
Table III-25 and Table III-26.  The standards associated with Alternative 4 are shown below in Table III-27.  Commenters are encouraged to address all aspects of feasibility analysis, including costs, the likelihood of developing the technology to achieve sufficient relaibility within the lead time.  

Table III-23 Alternative 4 Adoption Rates for 2021 MY
                                       
                                    Class 7
                                    Class 8
                                       
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                       
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                Alternative 4 2021MY Engine Technology Package
                                       
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                 Aerodynamics 
                                     Bin I
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                    Bin II
                                      65%
                                      65%
                                      0%
                                      65%
                                      65%
                                      0%
                                      65%
                                      65%
                                      0%
                                    Bin III
                                      30%
                                      30%
                                      35%
                                      30%
                                      30%
                                      35%
                                      30%
                                      30%
                                      35%
                                    Bin IV
                                      5%
                                      5%
                                      30%
                                      5%
                                      5%
                                      30%
                                      5%
                                      5%
                                      30%
                                     Bin V
                                      N/A
                                      N/A
                                      25%
                                      N/A
                                      N/A
                                      25%
                                      N/A
                                      N/A
                                      25%
                                    Bin VI
                                      N/A
                                      N/A
                                      10%
                                      N/A
                                      N/A
                                      10%
                                      N/A
                                      N/A
                                      10%
                                    Bin VII
                                      N/A
                                      N/A
                                      0%
                                      N/A
                                      N/A
                                      0%
                                      N/A
                                      N/A
                                      0%
                                 Steer Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                    Level 2
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                    Level 3
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                 Drive Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                      35%
                                    Level 2
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                      45%
                                    Level 3
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                           Extended Idle Reduction 
                                      APU
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      80%
                                      80%
                                      80%
                              Transmission Type 
                                    Manual
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      AMT
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                     Auto
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                  Dual Clutch
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                  Driveline 
                                Axle Lubricant
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                   6x2 Axle
                                       
                                       
                                       
                                      10%
                                      10%
                                      20%
                                      10%
                                      10%
                                      30%
                                   Downspeed
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                 Direct Drive
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                            Accessory Improvements 
                                      A/C
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                               Electric Access.
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                      Predefined Off-Cycle Technologies 
                           Predictive Cruise Control
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                        Automated Tire Inflation System
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%

Table III-24 Alternative 4 Adoption Rates for 2024 MY
                                       
                                    Class 7
                                    Class 8
                                       
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                       
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                Alternative 4 2024MY Engine Technology Package
                                       
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                     100%
                                 Aerodynamics 
                                     Bin I
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                    Bin II
                                      50%
                                      50%
                                      0%
                                      50%
                                      50%
                                      0%
                                      50%
                                      50%
                                      0%
                                    Bin III
                                      40%
                                      40%
                                      20%
                                      40%
                                      40%
                                      20%
                                      40%
                                      40%
                                      20%
                                    Bin IV
                                      10%
                                      10%
                                      20%
                                      10%
                                      10%
                                      20%
                                      10%
                                      10%
                                      20%
                                     Bin V
                                      N/A
                                      N/A
                                      35%
                                      N/A
                                      N/A
                                      35%
                                      N/A
                                      N/A
                                      35%
                                    Bin VI
                                      N/A
                                      N/A
                                      20%
                                      N/A
                                      N/A
                                      20%
                                      N/A
                                      N/A
                                      20%
                                    Bin VII
                                      N/A
                                      N/A
                                      5%
                                      N/A
                                      N/A
                                      5%
                                      N/A
                                      N/A
                                      5%
                                 Steer Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                    Level 2
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                    Level 3
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                 Drive Tires 
                                     Base
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                    Level 1
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                      20%
                                    Level 2
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                    Level 3
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                                      25%
                           Extended Idle Reduction 
                                      APU
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      90%
                                      90%
                                      90%
                              Transmission Type 
                                    Manual
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      AMT
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                     Auto
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                  Dual Clutch
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                      10%
                                  Driveline 
                                Axle Lubricant
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                   6x2 Axle
                                       
                                       
                                       
                                      20%
                                      20%
                                      60%
                                      20%
                                      20%
                                      60%
                                   Downspeed
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                      60%
                                 Direct Drive
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                                      50%
                            Accessory Improvements 
                                      A/C
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                               Electric Access.
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                                      30%
                      Predefined Off-Cycle Technologies 
                           Predictive Cruise Control
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                        Automated Tire Inflation System
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%
                                      40%

Table III-25 Alternative 4 GEM Inputs for 2021MY
                                    Class 7
                                    Class 8
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                    Engine
                  2021MY 11L Engine  350 HP  -  2% reduction
                  2021MY 11L Engine  350 HP  -  2% reduction
                  2021MY 11L Engine  350 HP  -  2% reduction
                  2021MY 15L Engine  455 HP  -  2% reduction
                  2021MY 15L Engine  455 HP  -  2% reduction
                  2021MY 15L Engine  455 HP  -  2% reduction
                  2021MY 15L Engine  455 HP  -  2% reduction
                  2021MY 15L Engine  455 HP  -  2% reduction
                  2021MY 15L Engine  455 HP  -  2% reduction
                          Aerodynamics (CdA in m[2])
                                     4.61
                                     6.01
                                     5.83
                                     4.61
                                     6.01
                                     5.83
                                     4.61
                                     6.01
                                     5.63
                      Steer Tires (CRR in kg/metric ton)
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                      Drive Tires (CRR in kg/metric ton)
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                                      6.2
                Extended Idle Reduction Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                     2.5%
                                     2.5%
                                     2.5%
             Transmission = 10 speed Automated Manual Transmission
   Gear Ratios = 12.8, 9.25, 6.76, 4.90, 3.58, 2.61, 1.89, 1.38, 1.00, 0.73
                            Drive axle Ratio = 3.45
                        6x2 Axle Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                     0.3%
                                     0.3%
                                     0.8%
                                     0.3%
                                     0.3%
                                     0.8%
                     Low Friction Axle Lubrication = 0.1%
                          Transmission benefit = 1.5%
                        Predictive Cruise Control =0.6%
                         Accessory Improvements = 0.2%
                Air Conditioner Efficiency Improvements = 0.1%
                    Automatic Tire Inflation Systems = 0.3%
                          Weight Reduction = 0 pounds
   Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs

Table III-26 Alternative 4 GEM Inputs for 2024MY
                                    Class 7
                                    Class 8
                                    Day Cab
                                    Day Cab
                                  Sleeper Cab
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                   Low Roof
                                   Mid Roof
                                   High Roof
                                    Engine
                  2021MY 11L Engine  350 HP  -  4% reduction
                  2021MY 11L Engine  350 HP  -  4% reduction
                  2021MY 11L Engine  350 HP  -  4% reduction
                  2021MY 15L Engine  455 HP  -  4% reduction
                  2021MY 15L Engine  455 HP  -  4% reduction
                  2021MY 15L Engine  455 HP  -  4% reduction
                  2021MY 15L Engine  455 HP  -  4% reduction
                  2021MY 15L Engine  455 HP  -  4% reduction
                  2021MY 15L Engine  455 HP  -  4% reduction
                          Aerodynamics (CdA in m[2])
                                     4.52
                                     5.92
                                     5.52
                                     4.52
                                     5.92
                                     5.52
                                     4.52
                                     5.92
                                     5.32
                      Steer Tires (CRR in kg/metric ton)
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                                      5.6
                      Drive Tires (CRR in kg/metric ton)
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                                      5.9
                Extended Idle Reduction Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      N/A
                                      3%
                                      3%
                                      3%
             Transmission = 10 speed Automated Manual Transmission
   Gear Ratios = 12.8, 9.25, 6.76, 4.90, 3.58, 2.61, 1.89, 1.38, 1.00, 0.73
                            Drive axle Ratio = 3.2
                        6x2 Axle Weighted Effectiveness
                                      N/A
                                      N/A
                                      N/A
                                     0.5%
                                     0.5%
                                     1.5%
                                     0.5%
                                     0.5%
                                     1.5%
                     Low Friction Axle Lubrication = 0.2%
                          Transmission benefit = 1.8%
                        Predictive Cruise Control =0.8%
                         Accessory Improvements = 0.3%
                Air Conditioner Efficiency Improvements = 0.2%
                    Automatic Tire Inflation Systems = 0.4%
                          Weight Reduction = 0 pounds
   Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs

Table III-27 Tractor Standards Associated with Alternative 4
2021 Model Year CO2 Grams per Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
92
74
66	
Mid Roof
102
81
74
High Roof
104
82
73
2021 Model Year Gallons of Fuel per 1,000 Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
9.0
7.3
6.5
Mid Roof
10.0
8.0
7.3
High Roof
10.2
8.1
7.2
2024 Model Year CO2 Grams per Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
87
70
62
Mid Roof
96
76
69
High Roof
96
76
67
2024 Model Year and Later Gallons of Fuel per 1,000 Ton-Mile

Day Cab
Sleeper Cab

Class 7
Class 8
Class 8
Low Roof
8.5
6.9
6.1
Mid Roof
9.4
7.5
6.8
High Roof
9.4
7.5
6.6
The technology costs of achieving the reductions projected above are included below in Table III-28 and Table III-29.
Table III-28 Class 7 and 8 Tractor Technology Incremental Costs in the 2021 Model Year 
Alternative 4 vs. the Less Dynamic Baseline [a][,b] 
(2012$ per vehicle)

                                    Class 7
                                    Class 8

                                    Day Cab
                                    Day Cab
                                  Sleeper Cab

Low/Mid Roof
High Roof
Low/ Mid Roof
High Roof
Low Roof
Mid Roof
High Roof
Engine[c]
                                                                           $656
                                                                           $656
                                                                           $656
                                                                           $656
                                                                           $656
                                                                           $656
                                                                           $656
Aerodynamics
                                                                           $769
                                                                           $632
                                                                           $769
                                                                           $632
                                                                           $740
                                                                           $740
                                                                           $665
Tires
                                                                            $50
                                                                            $11
                                                                            $83
                                                                            $18
                                                                            $61
                                                                            $61
                                                                            $18
Tire inflation system
                                                                           $271
                                                                           $271
                                                                           $271
                                                                           $271
                                                                           $271
                                                                           $271
                                                                           $271
Transmission
                                                                         $6,794
                                                                         $6,794
                                                                         $6,794
                                                                         $6,794
                                                                         $6,794
                                                                         $6,794
                                                                         $6,794
Axle & axle lubes
                                                                            $56
                                                                            $56
                                                                            $75
                                                                            $95
                                                                            $75
                                                                            $75
                                                                           $115
Idle reduction with APU
                                                                             $0
                                                                             $0
                                                                             $0
                                                                             $0
                                                                         $2,449
                                                                         $2,449
                                                                         $2,449
Air conditioning
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
Other vehicle technologies
                                                                           $261
                                                                           $261
                                                                           $261
                                                                           $261
                                                                           $261
                                                                           $261
                                                                           $261
Total
                                                                         $8,946
                                                                         $8,769
                                                                         $8,999
                                                                         $8,816
                                                                        $11,397
                                                                        $11,397
                                                                        $11,318
Notes:
[a] Costs shown are for the 2021 model year and are incremental to the costs of a tractor meeting the phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated tractor classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12 in particular).
c Engine costs are for a heavy HD diesel engine meant for a combination tractor.


Table III-29  Class 7 and 8 Tractor Technology Incremental Costs in the 2024 Model Year 
Alternative 4 vs. the Less Dynamic Baseline [a][,b] 
(2012$ per vehicle)

                                    Class 7
                                    Class 8

                                    Day Cab
                                    Day Cab
                                  Sleeper Cab

Low/Mid Roof
High Roof
Low/ Mid Roof
High Roof
Low Roof
Mid Roof
High Roof
Engine[c]
                                                                         $1,885
                                                                         $1,885
                                                                         $1,885
                                                                         $1,885
                                                                         $1,885
                                                                         $1,885
                                                                         $1,885
Aerodynamics
                                                                           $805
                                                                           $935
                                                                           $805
                                                                           $935
                                                                           $773
                                                                           $773
                                                                           $997
Tires
                                                                            $50
                                                                            $14
                                                                            $83
                                                                            $23
                                                                            $63
                                                                            $63
                                                                            $23
Tire inflation system
                                                                           $330
                                                                           $330
                                                                           $330
                                                                           $330
                                                                           $330
                                                                           $330
                                                                           $330
Transmission
                                                                         $7,143
                                                                         $7,143
                                                                         $7,143
                                                                         $7,143
                                                                         $7,143
                                                                         $7,143
                                                                         $7,143
Axle & axle lubes
                                                                           $102
                                                                           $102
                                                                           $138
                                                                           $210
                                                                           $138
                                                                           $138
                                                                           $210
Idle reduction with APU
                                                                             $0
                                                                             $0
                                                                             $0
                                                                             $0
                                                                         $2,687
                                                                         $2,687
                                                                         $2,687
Air conditioning
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
Other vehicle technologies
                                                                           $318
                                                                           $318
                                                                           $318
                                                                           $318
                                                                           $318
                                                                           $318
                                                                           $318
Total
                                                                        $10,757
                                                                        $10,851
                                                                        $10,826
                                                                        $10,968
                                                                        $13,461
                                                                        $13,461
                                                                        $13,717
Notes:
[a] Costs shown are for the 2024 model year and are incremental to the costs of a tractor meeting the Phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated tractor classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see draft RIA 2.12 in particular).
c Engine costs are for a heavy HD diesel engine meant for a combination tractor.

         Proposed Compliance Provisions for Tractors
In HD Phase 1, the agencies developed an entirely new program to assess the CO2 emissions and fuel consumption of tractors.  The agencies propose to carry over many aspects of the Phase 1 compliance approach, but are proposing to enhance several aspects of the compliance program.  The sections below highlight the key areas that are the same and those that are different.
HD Phase 2 Compliance Provisions That Remain the Same
The regulatory structure considerations for Phase 2 are discussed in more detail above in Section II.  We welcome comment on all aspects of the compliance program including where we are not proposing any changes.
    Application and Certification Process
For the Phase 2 NPRM, the agencies are proposing to keep many aspects of the HD Phase 1 tractor compliance program.  For example, the agencies propose to continue to use GEM (as revised for Phase 2), in coordination with additional component testing by manufacturers to determine the inputs, to determine compliance with the proposed fuel efficiency and CO2 standards.  Another aspect that we propose to carry over is the overall compliance approach.
In Phase 1 and as proposed in Phase 2, the general compliance process in terms of the pre-model year, during the model year, and post model year activities remain unchanged.  The manufacturers would continue to be required to apply for certification through a single source, EPA, with limited sets of data and GEM results (see 40 CFR 1037.205).  EPA would issue certificates upon approval based on information submitted through the VERIFY database (see 40 CFR 1037.255).  In Phase 1, EPA and NHTSA jointly review and approve innovative technology requests, i.e. performance of any technology whose performance is not measured by the GEM simulation tool and is not in widespread use in the 2010 MY.  For Phase 2, the agencies are proposing a similar process for allowing credits for off-cycle technologies that are not measured by the GEM simulation tool (see Section I.B.v. for a more detailed discussion of off-cycle requests).  During the model year, the manufacturers would continue to generate certification data and conduct GEM runs on each of the vehicle configurations it builds.  After the model year ends, the manufacturers would submit end of year reports to EPA that include the GEM results for all of the configurations it builds, along with credit/deficit balances if applicable (see 40 CFR 1037.250 and 1037.730).  EPA and NHTSA would jointly coordinate on any enforcement action required. 
    Compliance Requirements
The agencies are also proposing not to change the following provisions:
         * Useful life of tractors (40 CFR 1037.105(e) and 1037.106(e))
         * Emission-related warranty requirements (40 CFR 1037.120)
         * Maintenance Instructions, allowable maintenance, and amending maintenance instructions (40 CFR 1037.125 and 137.220)
         * Deterioration factors (40 CFR 1037.205(l) and 1037.241(c))
         * Vehicle family, subfamily, and configurations (40 CFR 1037.230)
    Drive Cycles and Weightings
In Phase 1, the agencies adopted three drive cycles used in GEM to evaluate the fuel consumption and CO2 emissions from various vehicle configurations.  One of the cycles is the Transient mode of the California ARB Heavy Heavy-Duty Truck 5 Mode cycle.  It is intended to broadly cover urban driving.  The other two cycles represent highway driving at 55 mph and 65 mph.
The agencies propose to maintain the existing drive cycles and weighting.  For sleeper cabs, the weightings would remain 5 percent of the Transient cycle, 9 percent of the 55 mph cycle, and 86 percent of the 65 mph cycle.  The day cab results would be weighted based on 19 percent of the transient cycle, 17 percent of the 55 mph cycle, and 64 percent of the 65 mph cycle (see 40 CFR 1037.510(c)).  One key difference in the proposed drive cycles is the addition of grade, discussed below in Section III.E.2.
The 55 mph and 65 mph drive cycles used in GEM assume constant speed operation at nominal vehicle speeds with downshifting occurring if road incline causes a predetermined drop in vehicle speed.  In real-world vehicle operation, traffic conditions and other factors may cause periodic operation at lower (e.g. creep) or variable vehicle speeds.  The agencies therefore request comment on the need to include segments of lower or variable speed operation in the nominally 55 mph and 65 mph drive cycles used in GEM and how this may or may not impact the strategies manufacturers would develop.  We also request data from fleet operators or others that may track vehicle speed operation of heavy-duty tractors.
    Empty Weight and Payload
The total weight of the tractor-trailer combination is the sum of the tractor curb weight, the trailer curb weight, and the payload.  The total weight of a vehicle is important because it in part determines the impact of technologies, such as rolling resistance, on GHG emissions and fuel consumption.  In Phase 2, we are proposing to carry over the total weight of the tractor-trailer combination used in GEM for Phase 1.  The agencies developed the proposed tractor curb weight inputs for Phase 2 from actual tractor weights measured in two of EPA's Phase 1 test programs.  The proposed trailer curb weight inputs were derived from actual trailer weight measurements conducted by EPA and from weight data provided to ICF International by the trailer manufacturers.  
There is a further issue of what payload weight to assign during compliance testing.  In use, trucks operate at different weights at different times during their operations.  The greatest freight transport efficiency (the amount of fuel required to move a ton of payload) would be achieved by operating trucks at the maximum load for which they are designed all of the time.  However, this may not always be practicable.  Delivery logistics may dictate partial loading.  Some payloads, such as potato chips, may fill the trailer before it reaches the vehicle's maximum weight limit.  Or full loads simply may not be available commercially.  M.J. Bradley analyzed the Truck Inventory and Use Survey and found that approximately 9 percent of combination tractor miles travelled empty, 61 percent are "cubed-out" (the trailer is full before the weight limit is reached), and 30 percent are "weighed out" (operating weight equal 80,000 pounds which is the gross vehicle weight limit on the Federal Interstate Highway System or greater than 80,000 pounds for vehicles traveling on roads outside of the interstate system).  
The amount of payload that a tractor can carry depends on the category (or GVWR and GCWR) of the vehicle.  For example, a typical Class 7 tractor can carry less payload than a Class 8 tractor.  For Phase 1, the agencies used the Federal Highway Administration Truck Payload Equivalent Factors using Vehicle Inventory and Use Survey (VIUS) and Vehicle Travel Information System data to determine the payloads.  FHWA's results indicated that the average payload of a Class 8 vehicle ranged from 36,247 to 40,089 pounds, depending on the average distance travelled per day.  The same study shows that Class 7 vehicles carried between 18,674 and 34,210 pounds of payload also depending on average distance travelled per day. Based on these data, the agencies are proposing to continue to prescribe a fixed payload of 25,000 pounds for Class 7 tractors and 38,000 pounds for Class 8 tractors for certification testing. The agencies propose to continue to use a common payload for Class 8 day cabs and sleeper cabs as a predefined GEM input because the data available do not distinguish among Class 8 tractor types.  These proposed payload values represent a heavily loaded trailer, but not maximum GVWR, since as described above the majority of tractors "cube-out" rather than "weigh-out."  
Details of the proposed individual weight inputs by regulatory category, as shown in Table III-30, are included in draft RIA Chapter 3.  We welcome comment or new data to support changes to the tractor weights, or refinements to the heavy-haul tractor, trailer, and payload weights.
Table III-30 Proposed Combination Tractor Weight Inputs
                                  Model Type
                            Regulatory Subcategory
                           Tractor Tare Weight (lbs)
                             Trailer Weight (lbs)
                                 Payload (lbs)
                              Total Weight (lbs)
                                    Class 8
                             Sleeper Cab High Roof
                                    19,000
                                    13,500
                                    38,000
                                    70,500
                                    Class 8
                             Sleeper Cab Mid Roof
                                    18,750
                                    10,000
                                    38,000
                                    66,750
                                    Class 8
                             Sleeper Cab Low Roof
                                    18,500
                                    10,500
                                    38,000
                                    67,000
                                    Class 8
                               Day Cab High Roof
                                    17,500
                                    13,500
                                    38,000
                                    69,000
                                    Class 8
                               Day Cab  Mid Roof
                                    17,100
                                    10,000
                                    38,000
                                    65,100
                                    Class 8
                               Day Cab  Low Roof
                                    17,000
                                    10,500
                                    38,000
                                    65,500
                                    Class 7
                               Day Cab High Roof
                                    11,500
                                    13,500
                                    25,000
                                    50,000
                                    Class 7
                               Day Cab  Mid Roof
                                    11,100
                                    10,000
                                    25,000
                                    46,100
                                    Class 7
                               Day Cab Low Roof
                                    11,000
                                    10,500
                                    25,000
                                    46,500
                                    Class 8
                                  Heavy-Haul
                                    19,000
                                    13,500
                                    86,000
                                    118,500
    Tire Testing
In Phase 1, the manufacturers are required to input their tire rolling resistance coefficient into GEM.  Also in Phase 1, the agencies adopted the provisions in ISO 28580 to determine the rolling resistance of tires.  As described in 40 CFR 1037.520(c), the agencies require that at least three tires for each tire design are to be tested at least one time.   Our assessment of the Phase 1 program to date indicates that these requirements reasonably balance the need for precision, repeatability, and testing burden.  Therefore we propose to carry over the Phase 1 testing provisions for tire rolling resistance into Phase 2.  We welcome comments regarding the proposed tire testing provisions.
In Phase 1, the agencies received comments from stakeholders highlighting a need to develop a reference lab and alignment tires for the HD sector.  The agencies discussed the lab-to-lab comparison conducted in the Phase 1 EPA tire test program (76 FR 57184).  The agencies reviewed the rolling resistance data from the tires that were tested at both the STL and Smithers laboratories to assess inter-laboratory and test machine variability. The agencies conducted statistical analysis of the data to gain better understanding of lab-to-lab correlation and developed an adjustment factor for data measured at each of the test labs. Based on these results, the agencies believe the lab-to-lab variation for the STL and Smithers laboratories would have very small effect on measured rolling resistance values.  Based on the test data, the agencies judge for the HD Phase 2 program to continue to use the current levels of variability, and the agencies therefore propose to allow the use of either Smithers or STL laboratories for determining the tire rolling resistance value.  However, we welcome comment on the need to establish a reference machine for the HD sector and whether tire testing facilities are interested in and willing to commit to developing a reference machine.
Key Differences in HD Phase 2 Compliance Provisions
We welcome comment on all aspects of the compliance program for which we are proposing changes.
    Aerodynamic Assessment
In Phase 1, the manufacturers conduct aerodynamic testing to establish the appropriate bin and GEM input for determining compliance with the CO2 and fuel consumption standards.  The agencies propose to continue this general approach in HD Phase 2, but make several enhancements to the aerodynamic assessment of tractors.  As discussed below in this section, we propose some modifications to the aerodynamic test procedures -- the addition of wind averaged yaw in the aerodynamic assessment, the addition of trailer skirts to the standard trailer used to determine aerodynamic performance of tractors and revisions to the aerodynamic bins.
Aerodynamic Test Procedures
The aerodynamic drag of a vehicle is determined by the vehicle's coefficient of drag (Cd), frontal area, air density and speed.  Quantifying tractor aerodynamics as an input to the GEM presents technical challenges because of the proliferation of tractor configurations, and subtle variations in measured aerodynamic values among various test procedures.  In Phase 1, Class 7 and 8 tractor aerodynamic results are developed by manufacturers using a range of techniques, including wind tunnel testing, computational fluid dynamics, and constant speed tests.  
We continue to believe a broad approach allowing manufacturers to use these multiple test procedures to demonstrate aerodynamic performance of its tractor fleet is appropriate given that no single test procedure is superior in all aspects to other approaches.  However, we also recognize the need for consistency and a level playing field in evaluating aerodynamic performance. To address the consistency and level playing field concerns, NHTSA and EPA adopted in Phase 1, while working with industry, an approach that identified a reference aerodynamic test method and a procedure to align results from other aerodynamic test procedures with the reference method.
The agencies adopted in Phase 1 an enhanced coastdown procedure as the reference method (see 40 CFR 1066.310) and defined a process for manufacturers to align drag results from each of their own test methods to the reference method results using Falt-aero (see 40 CFR 1037.521).  Manufacturers are able to use any aerodynamic evaluation method in demonstrating a vehicle's aerodynamic performance as long as the method is aligned to the reference method.  The agencies propose to continue to use this alignment method approach to maintain the testing flexibility that manufacturers have today.  However, the agencies propose to increase the rigor in determining the Falt-aero for Phase 2.  Beginning in 2021 MY, we propose that the manufacturers would be required to determine a new Falt-aero for each of their tractor models for each aerodynamic test method.  In Phase 1, manufacturers are required to determine their Falt-aero using only a high roof sleeper cab with a full aerodynamics package (see 40 CFR 1037.521(a)(2)).  In Phase 2, we propose that manufacturers would be required to determine a unique Falt-aero value for each major model of their high roof day cabs and high roof sleeper cabs.  In Phase 2, we propose that manufacturers may carry over the Falt-aero value until a model changeover or based on the agencies' discretion to require up to two new Falt-aero determinations each year.  We welcome comment on the burden associated with this proposed change.
Based on feedback received during the development of Phase 1, we understand that there is interest from some manufacturers to change the reference method in Phase 2 from coastdown to constant speed testing.  EPA has conducted an aerodynamic test program at Southwest Research Institute to evaluate both methods in terms of cost of testing, testing time, testing facility requirements, and repeatability of results.  Details of the analysis and results are included in draft RIA Chapter 3.2.  The results showed that the enhanced coastdown test procedures and analysis produced results with acceptable repeatability and at a lower cost than the constant speed testing.  Based on the results of this testing, the agencies propose to continue to use the enhanced coastdown procedure for the reference method in Phase 2.  However, we welcome comment on the need to change the reference method for the Phase 2 final rule to constant speed testing, including comparisons of aerodynamic test results using both the coastdown and constant speed test procedures.  In addition, we welcome comments on and suggested revisions to the constant speed test procedure specifications set forth in Chapter 3.2.2.2 of the draft RIA and 40 CFR 1066.320.  If we determine that it is appropriate to make the change, then the aerodynamic bins in the final rule would be adjusted to take into account the difference in absolute CdA values due to the change in method.
The agencies are also considering refinements to the computational fluid dynamics modeling method to determine the aerodynamic performance of tractors.  Specifically, if the conditions for performing the analysis require greater specificity (e.g., wind speed assumed to be seven miles per hour at multiple angles, turbulence intensity criteria value) or if turbulence model and mesh deformation should be required, rather than "if applicable," for all CFD analysis.  The agencies welcome comment on the proposed revisions.
In Phase 1, we adopted interim provisions in 40 CFR 1037.150(k) that accounted for coastdown measurement variability by allowing a compliance demonstration based on in-use test results if the drag area was at or below the maximum drag area allowed for the bin above the bin to which the vehicle was certified.   Since adoption of Phase 1, EPA has conducted in-use aerodynamic testing and found that uncertainty associated with coastdown testing is less than anticipated.  In addition, we are proposing additional enhancements in the Phase 2 coastdown procedures to continue to reduce the variability of coastdown results, including the impact of environmental conditions.  Therefore, we are proposing to sunset the provision in 40 CFR 1037.150(k) at the end of the Phase 1 program (after the 2020 model year).  We welcome comment on this proposal.
Wind Averaged Drag
In Phase 1, EPA and NHTSA recognized that wind conditions, most notably wind direction, have a greater impact on real world CO2 emissions and fuel consumption of heavy-duty trucks than of light-duty vehicles.  As noted in the NAS report, the wind average drag coefficient is about 15 percent higher than the zero degree coefficient of drag.   In addition, the agencies received comments in Phase 1 that supported the use of wind averaged drag results for the aerodynamic determination.  The agencies considered adopting the use of a wind averaged drag coefficient in the Phase 1 regulatory program, but ultimately decided to  finalize drag values which represent zero yaw (i.e., representing wind from directly in front of the vehicle, not from the side) instead.  We took this approach recognizing that the reference method is coastdown testing and it is not capable of determining wind averaged yaw.  Wind tunnels and CFD are currently the only tools to accurately assess the influence of wind speed and direction on a truck's aerodynamic performance.  The agencies recognized, as NAS did, that the results of using the zero yaw approach may result in fuel consumption predictions that are offset slightly from real world performance levels, not unlike the offset we see today between fuel economy test results in the CAFE program and actual fuel economy performance observed in-use. 
As the tractor manufacturers continue to refine the aerodynamics of tractors, we believe that continuing the zero yaw approach into Phase 2 could potentially impact the overall technology effectiveness or change the kinds of technology decisions made by the tractor manufacturers in developing equipment to meet our proposed HD Phase 2 standards.  Therefore, we are proposing aerodynamic test procedures that take into account the wind averaged drag performance of tractors.  The agencies propose to account for this change in aerodynamic test procedure by appropriately adjusting the aerodynamic bins to reflect a wind averaged drag result instead of a zero yaw result.  
The agencies propose that beginning in 2021 MY, the manufacturers would be required to adjust their CdA values to represent a zero yaw value from coastdown and add the CdA impact of the wind averaged drag.  The impact of wind averaged drag relative to a zero yaw condition can only be measured in a wind tunnel or with CFD.  We welcome data evaluating the consistency of wind averaged drag measurements between wind tunnel, CFD, and other potential methods such as constant speed or coastdown.  The agencies propose that manufacturers would use the following equation to make the necessary adjustments to a coastdown result to obtain the CdAwad value:
CdAwad = CdAzero,coastdown + (CdAwad,wind tunnel  -  CdAzero,wind tunnel) * Falt-aero
If the manufacturer has a wind averaged CdA value from either a wind tunnel or CFD, then we propose they would use the following equation to obtain the CdAwad value:
CdAwad = CdAwad,wind tunnel or CFD * Falt-aero
We welcome comment on whether the wind averaged drag should be determined using a full yaw sweep as specified in Appendix A of the Society of Automotive Engineers (SAE) recommended practice number J1252 "SAE Wind Tunnel Test Procedure for Trucks and Buses" (e.g., zero degree yaw and a six other yaw angles at increments of 3 degrees or greater) or a subset of specific angles as currently allowed in the Phase 1 regulations. 
To reduce the testing burden the agencies propose that manufacturers have the option of determining the offset between zero yaw and wind averaged yaw either through testing or by using the EPA-defined default offset.  Details regarding the determination of the offset are included in the draft RIA Chapter 3.2.  We propose the manufacturers would use the following equation if they had a zero yaw coastdown value and choose not to conduct wind averaged measurements.
CdAwad = CdAzero,coastdown + 0.80
In addition, we propose the manufacturers would use the following equation if they had a zero yaw wind tunnel or CFD value and choose not to conduct wind averaged measurements.
CdAwad = (CdAzero,wind tunnel or CFD * Falt-aero)+0.80
We welcome comments on all aspects of the proposed wind averaged drag provisions.
Standard Trailer Definition
Similar to the approach the agencies adopted in Phase 1, NHTSA and EPA are proposing provisions such that the tractor performance in GEM is judged assuming the tractor is pulling a standardized trailer.  The agencies believe that an assessment of the tractor fuel consumption and CO2 emissions should be conducted using a tractor-trailer combination, as tractors are invariably used in combination with trailers and this is their essential commercial purpose.  Trailers, of course, also influence the extent of carbon emissions from the tractor (and vice-versa).  We believe that using a standardized trailer best reflects the impact of the overall weight of the tractor-trailer and the aerodynamic technologies in actual use, and consequent real-world performance, where tractors are designed and used with a trailer.  EPA research confirms what one would intuit: tractor-trailer pairings are almost always optimized.  EPA conducted an evaluation of over 4,000 tractor-trailer combinations using live traffic cameras in 2010.   The results showed that approximately 95 percent of the tractors were matched with the standard trailer specified (high roof tractor with box trailer, mid roof tractor with tanker trailer, and low roof with flatbed trailer).  Therefore, the agencies propose that Phase 2 GEM continue to use a predefined typical trailer defined in Phase 1 in assessing overall performance for test purposes.  As such, the high roof tractors would be paired with a standard box trailer; the mid roof tractors would be paired with a tanker trailer; and the low roof tractors would be paired with a flatbed trailer.   
However, the agencies are proposing to change the definition of the standard box trailer used by tractor manufacturers to determine the aerodynamic performance of high roof tractors in Phase 2.  We believe this is necessary to reflect the aerodynamic improvements experienced by the trailer fleet over the last several years due to influences from the California Air Resources Board mandate and EPA's SmartWay Transport Partnership.  The standard box trailer used in Phase 1 to assess the aerodynamic performance of high roof tractors is a 53 foot box trailer without any aerodynamic devices.  In the development of Phase 2, the agencies evaluated the increase in adoption rates of trailer side skirts and boat tails in the market over the last several years and have seen a marked increase.  We estimate that approximately 50 percent of the new trailers sold in 2018 will have trailer side skirts.[,]  As the agencies look towards the proposed standards in the 2021 and beyond timeframe, we believe that it is appropriate to update the standard box trailer definition.  In 2021-2027, we believe the trailer fleet will be a mix of trailers with no aerodynamics, trailers with skirts, and trailers with advanced aero; with the advanced aero being a very limited subset of the new trailers sold each year.  Consequently, overall, we believe a trailer with a skirt will be the most representative of the trailer fleet for the duration of the regulation timeframe, and plausibly beyond.  Therefore, we are proposing that the standard box trailer in Phase 2 - the trailer assumed during the certification process to be paired with a high roof tractor - be updated to include a trailer skirt starting in 2021 model year.  Even though the agencies are proposing new box trailer standards beginning in 2018 MY, we are not proposing to update the standard trailer in the tractor certification process until 2021 MY, to align with the new tractor standards.  If we were to revise the standardized trailer definition for Phase 1, then we would need to revise the Phase 1 tractor standards.  The details of the trailer skirt definition are included in 40 CFR 1037.501(g)(1). 
EPA has conducted extensive aerodynamic testing to quantify the impact on the coefficient of drag of a high roof tractor due to the addition of a trailer skirt.  Details of the test program and the results can be found in the draft RIA Chapter 3.2.  The results of the test program indicate that on average, the impact of a trailer skirt matching the definition of the skirt specified in 40 CFR 1037.501(g)(1) is approximately 7 percent improvement in CO2 emissions and fuel consumption.  This off-set was used during the development of the Phase 2 aerodynamic bins.
We seek comment on our proposed HD Phase 2 standard trailer configuration.  We also welcome comments on suggestions on alternative ways to define the standard trailer, such as developing a certified computer aided drawing (CAD) model.  
Aerodynamic Bins
The agencies are proposing to continue the approach where the manufacturer would determine a tractor's aerodynamic drag force through testing, determine the appropriate predefined aerodynamic bin, and then input the predefined CdA value for that bin into the GEM.  The agencies proposed Phase 2 aerodynamic bins reflect three changes to the Phase 1 bins  -  the incorporation of wind averaged drag, the addition of trailer skirts to the standard box trailer used to determine the aerodynamic performance of high roof tractors, and the addition of bins to reflect the continued improvement of tractor aerodynamics in the future.  Because of each of these changes, the aerodynamic bins proposed for Phase 2 are not directly comparable to the Phase 1 bins.
HD Phase 1 included five aerodynamic bins to cover the spectrum of aerodynamic performance of high roof tractors.  Since the development of the Phase 1 rules, the manufacturers have continued to invest in aerodynamic improvements for tractors.  This continued evolution of aerodynamic performance, both in production and in the research stage as part of the SuperTruck program, has consequently led the  agencies to propose two additional aerodynamic technology bins (Bins VI and VII) for high roof tractors.  These two new bins would further segment the Phase 1 aerodynamic Bin V to recognize the difference in advanced aerodynamic technologies and designs.  
In both HD Phase 1 and as proposed by the agencies in Phase 2, aerodynamic Bin I through Bin V represent tractors sharing similar levels of technology.  The first high roof aerodynamic category, Bin I, is designed to represent tractor bodies which prioritize appearance or special duty capabilities over aerodynamics.  These Bin I tractors incorporate few, if any, aerodynamic features and may have several features that detract from aerodynamics, such as bug deflectors, custom sunshades, B-pillar exhaust stacks, and others.  The second high roof aerodynamics category is Bin II which roughly represents the aerodynamic performance of the average new tractor sold in 2010. The agencies developed this bin to incorporate conventional tractors which capitalize on a generally aerodynamic shape and avoid classic features which increase drag.  High roof tractors within Bin III build on the basic aerodynamics of Bin II tractors with added components to reduce drag in the most significant areas on the tractor, such as integral roof fairings, side extending gap reducers, fuel tank fairings, and streamlined grill/hood/mirrors/bumpers, similar to 2013 model year SmartWay tractors.  The Bin IV aerodynamic category for high roof tractors builds upon the Bin III tractor body with additional aerodynamic treatments such as underbody airflow treatment, down exhaust, and lowered ride height, among other technologies.  HD Phase 1 Bin V tractors incorporate advanced technologies which are currently in the prototype stage of development, such as advanced gap reduction, rearview cameras to replace mirrors, wheel system streamlining, and advanced body designs.  For HD Phase 2, the agencies propose to segment the aerodynamic performance of these advanced technologies into Bins V through VII.
In Phase 1, the agencies adopted only two aerodynamic bins for low and mid roof tractors.  The agencies limited the number of bins to reflect the actual range of aerodynamic technologies effective in low and mid roof tractor applications.  High roof tractors are consistently paired with box trailer designs, and therefore manufacturers can design the tractor aerodynamics as a tractor-trailer unit and target specific areas like the gap between the tractor and trailer.  In addition, the high roof tractors tend to spend more time at high speed operation which increases the impact of aerodynamics on fuel consumption and GHG emissions.  On the other hand, low and mid roof tractors are designed to pull variable trailer loads and shapes.  They may pull trailers such as flat bed, low boy, tankers, or bulk carriers.  The loads on flat bed trailers can range from rectangular cartons with tarps, to a single roll of steel, to a front loader.  Due to these variables, manufacturers do not design unique low and mid roof tractor aerodynamics but instead use derivatives from their high roof tractor designs.  The aerodynamic improvements to the bumper, hood, windshield, mirrors, and doors are developed for the high roof tractor application and then carried over into the low and mid roof applications.  As mentioned above, the types of designs that would move high roof tractors from a Bin III to Bins IV through VII include features such as gap reducers and integral roof fairings which would not be appropriate on low and mid roof tractors.  
As Phase 2 looks to further improve the aerodynamics for high roof sleeper cabs, we believe it is also appropriate to expand the number of bins for low and mid roof tractors too.  For Phase 2, the agencies are proposing to differentiate the aerodynamic performance for low and mid roof applications with four bins, instead of two, in response to feedback received from manufacturers of low and mid roof tractors related to the limited opportunity to incorporate aerodynamic technologies in their compliance plan.  We propose that low and mid roof tractors may determine the aerodynamic bin based on the aerodynamic bin of an equivalent high roof tractor, as shown below in Table III-31.
 Table III-31 Proposed Phase 2 Revisions to 40 CFR 1037.520(b)(3)
                                 High Roof Bin
                             Low and Mid Roof Bin
                                     Bin I
                                     Bin I
                                    Bin II
                                     Bin I
                                    Bin III
                                    Bin II
                                    Bin IV
                                    Bin II
                                     Bin V
                                    Bin III
                                    Bin VI
                                    Bin III
                                    Bin VII
                                    Bin IV

The agencies developed new high roof tractor aerodynamic bins for Phase 2 that reflect the change from zero yaw to wind averaged drag, the more aerodynamic reference trailer, and the addition of two bins.  Details regarding the derivation of the proposed high roof bins are included in Draft RIA Chapter 3.2.8.  The proposed high roof tractor bins are defined in Table III-32.  The proposed revisions to the low and mid roof tractor bins reflect the addition of two new aerodynamic bins and are listed in Table III-33.
Table III-32 Proposed Phase 2 Aerodynamic Input Definitions to GEM for High Roof Tractors

                                    Class 7
                                    Class 8

                                    Day Cab
                                    Day Cab
                                  Sleeper Cab

                                   High Roof
                                   High Roof
                                   High Roof
Aerodynamic Test Results (CdAwad in m[2])
Bin I
                                    >= 7.5
                                    >= 7.5
                                    >=7.3
Bin II
                                    6.8-7.4
                                    6.8-7.4
                                    6.6-7.2
Bin III
                                    6.2-6.7
                                    6.2-6.7
                                    6.0-6.5
Bin IV
                                    5.6-6.1
                                    5.6-6.1
                                    5.4-5.9
Bin V
                                    5.1-5.5
                                    5.1-5.5
                                    4.9-5.3
Bin VI
                                    4.7-5.0
                                    4.7-5.0
                                    4.5-4.8
Bin VII
                                    <= 4.6
                                    <= 4.6
                                    <= 4.4
Aerodynamic Input to GEM (CdAwad in m[2])
Bin I
                                      7.6
                                      7.6
                                      7.4
Bin II
                                      7.1
                                      7.1
                                      6.9
Bin III
                                      6.5
                                      6.5
                                      6.3
Bin IV
                                      5.8
                                      5.8
                                      5.6
Bin V
                                      5.3
                                      5.3
                                      5.1
Bin VI
                                      4.9
                                      4.9
                                      4.7
Bin VII
                                      4.5
                                      4.5
                                      4.3

Table III-33 Proposed Phase 2 Aerodynamic Input Definitions to GEM for Low and Mid Roof Tractors

Class 7
Class 8

Day Cab
Day Cab
Sleeper Cab

Low Roof
Mid Roof
Low Roof
Mid Roof
Low Roof
Mid Roof

Aerodynamic Test Results (CdA in m[2])
Bin I
>= 5.1
>= 6.5
>= 5.1
>= 6.5
>= 5.1
>= 6.5
Bin II
4.6-5.0
6.0-6.4
4.6-5.0
6.0-6.4
4.6-5.0
6.0-6.4
Bin III
4.2-4.5
5.6-5.9
4.2-4.5
5.6-5.9
4.2-4.5
5.6-5.9
Bin IV
<= 4.1
<= 5.5
<= 4.1
<= 5.5
<= 4.1
<= 5.5
Aerodynamic Input to GEM (CdA in m[2])
Bin I
5.3
6.7
5.3
6.7
5.3
6.7
Bin II
4.8
6.2
4.8
6.2
4.8
6.2
Bin III
4.3
5.7
4.3
5.7
4.3
5.7
Bin IV
4.0
5.4
4.0
5.4
4.0
5.4

    Road Grade in the Drive Cycles
Road grade can have a significant impact on the overall fuel economy of a heavy-duty vehicle.  Table III-34 shows the results from a real world evaluation of heavy-duty tractor-trailers conducted by Oak Ridge National Lab.  The study found that the impact of a mild upslope of one to four percent led to a decrease in average fuel economy from 7.33 mpg to 4.35 mpg.  These results are as expected because vehicles consume more fuel while driving on an upslope than driving on a flat road because the vehicle needs to exert additional power to overcome the grade resistance force.  The amount of extra fuel increases with increases in road gradient.  On downgrades, vehicles consume less fuel than on a flat road.  However, as shown in the fuel consumption results in Table III-34, the amount of increase in fuel consumption on an upslope is greater than the amount of decrease in fuel consumption on a downslope which leads to a net increase in fuel consumption.  As an example, the data shows that a vehicle would use 0.3 gallons per mile more fuel in a severe upslope than on flat terrain, but only save 0.1 gallons of fuel per mile on a severe downslope.  In another study, Southwest Research Institute modeling found that the addition of road grade to a drive cycle has an 8 to 10 percent negative impact on fuel economy.  
Table III-34 Fuel Consumption Relative to Road Grade
                                Type of Terrain
                             Average Fuel Economy
                              (miles per gallon)
                           Average Fuel Consumption 
                              (gallons per mile)
                            Severe upslope (>4%)
                                     2.90
                                     0.34
                            Mild upslope (1% to 4%)
                                     4.35
                                     0.23
                            Flat terrain (1% to 1%)
                                     7.33
                                     0.14
                          Mild downslope (-4% to -1%)
                                     15.11
                                     0.07
                          Severe downslope (<-4%)
                                     23.50
                                     0.04
In Phase 1, the agencies did not include road grade.  However, we believe it is important to propose including road grade in Phase 2 to properly assess the value of technologies, such as downspeeding and the integration of the engine and transmission, which were not technologies included in the technology basis for Phase 1 and are not directly assessed by GEM in its Phase 1 iteration.  The addition of road grade to the drive cycles would be consistent with the NAS recommendation in the 2014 Phase 2 First Report.
The U.S. Department of Energy and EPA have partnered to support a project aimed at evaluating, refining and/or developing the appropriate road grade profiles for the 55 mph and 65 mph highway cruise duty cycles that would be used in the certification of heavy-duty vehicles to the Phase 2 GHG emission and fuel efficiency standards.  The National Renewable Energy Laboratory (NREL) was contracted to do this work and has since developed two pairs of candidate, activity-weighted road grade profiles representative of U.S. limited-access highways.  To this end, NREL used high-accuracy road grade data and county-specific vehicle miles traveled data.  One pair of the profiles is representative of the nation's limited-access highways with 55 and 60 mph speed limits, and another is representative of such highways with speed limits of 65 to 75 mph.  The profiles are distance-based and cover a maximum distance of 12 and 15 miles, respectively.  A report documenting this NREL work is in the public docket for these proposed rules, and comments are requested on the recommendations therein.  In addition to NREL work, the agencies have independently developed yet another candidate road grade profile for use in the 55 mph and 65 mph highway cruise duty cycles.  While based on the same road grade database generated by NREL for U.S. restricted-access highways, its design is predicated on a different approach.  The development of this profile is documented in the memorandum to the docket.  The agencies have evaluated all of the candidate road grade profiles and have prepared possible alternative tractor standards based on these profiles.  The agencies request comment on this analysis, which is available in a memorandum to the docket.
For the proposal, the agencies developed an interim road grade profile for development of the proposed standards.  The agencies are proposing the inclusion of an interim road grade profile, as shown below in Figure III-2, in both the 55 mph and 65 mph cycles.  The grade profile was developed by Southwest Research Institute on a 12.5 mile stretch of restricted-access highway during on-road tests conducted for EPA's validation of the Phase 2 version of GEM.  The minimum grade in the interim cycle is -2.1 percent and the maximum grade is 2.4 percent.  The cycle spends 30 percent of the distance in grades of +/- 0.5 percent.  Overall, the cycle spends approximately 50 percent of the time in relatively flat terrain with road gradients of less than 1 percent.
The agencies believe the interim cycle has sufficient representativeness based on a comparison to data from the Department of Transportation used in the development of the light-duty Federal Test Procedure cycle (FTP), which found approximately 55 percent of the vehicle miles traveled were on road gradients of less than 1 percent.  Consequently, we expect that road grade profiles developed by NREL and by the agencies will not differ significantly from the interim profile proposed here.  The agencies request data from fleet operators or others that have real world grade profile data.
Figure III-2: Proposed Road Grade Profile for 55 mph and 65 mph Drive Cycles
    Weight Reduction
In Phase 1, the agencies adopted regulations that provided manufacturers with the ability to use GEM to measure emission reduction and reductions in fuel consumption resulting from use of high strength steel and aluminum components for weight reduction, , and to do so without the burden of entering the curb weight of every tractor produced.  We treated such weight reduction in two ways in Phase 1 to account for the fact that combination tractor-trailers weigh-out approximately one-third of the time and cube-out approximately two-thirds of the time.  Therefore, one-third of the weight reduction is added payload in the denominator while two-thirds of the weight reduction is subtracted from the overall weight of the vehicle in GEM.  See 76 FR 57153.  The agencies also allowed manufacturers to petition for off-cycle credits for components not measured in GEM.
NHTSA and EPA propose carrying the Phase 1 treatment of weight reduction into Phase 2.  That is, these types of weight reduction, although not part of the agencies' technology packages for the proposed (or alternative) standards, can still be recognized in GEM up to a point.  In addition, the agencies propose to add additional thermoplastic components to the weight reduction table, as shown below in Table III-35.  The thermoplastic component weight reduction values were developed in coordination with SABIC, a thermoplastic component supplier.  Also, in Phase 2, we are proposing to recognize the potential weight reduction opportunities in the powertrain and drivetrain systems as part of the vehicle inputs into GEM.  Therefore, we believe it is appropriate to also recognize the weight reduction associated with both smaller engines and 6x2 axles.  We propose including the values listed in Table III-36 and make them available upon promulgation of the final Phase 2 rule (i.e., available even under Phase 1).  We welcome comments on all aspects of weight reduction.
Table III-35 Proposed Phase 2 Weight Reduction Technologies for Tractors
Weight Reduction Technology
                               Weight Reduction
                              (lb per tire/wheel)
Single Wide Drive Tire with ...
Steel Wheel
                                      84
                                       
Aluminum Wheel
                                      139
                                       
Light Weight Aluminum Wheel
                                      147
Steer Tire or Dual Wide Drive Tire with ...
High Strength Steel Wheel
                                       8
                                       
Aluminum Wheel
                                      21
                                       
Light Weight Aluminum Wheel
                                      30
Weight Reduction Technologies
                        Aluminum Weight Reduction (lb.)
                  High Strength Steel Weight Reduction (lb.)
                     Thermoplastic Weight Reduction (lb.)
Door (per door)
                                      20
                                       6
                                       
Roof (per vehicle)
                                      60
                                      18
                                       
Cab rear wall (per vehicle)
                                      49
                                      16
                                       
Cab floor (per vehicle)
                                      56
                                      18
                                       
Hood (per vehicle)
                                      55
                                      17
                                       
Hood Support Structure (per vehicle)
                                      15
                                       3
                                       
Hood and Front Fender (per vehicle)
                                       
                                       
                                      65
Day Cab Roof Fairing (per vehicle)
                                       
                                       
                                      18
Sleeper Cab Roof Fairing (per vehicle)
                                      75
                                      20
                                      40
Aerodynamic Side Extender (per vehicle)
                                       
                                       
                                      10
Fairing Support Structure (per vehicle)
                                      35
                                       6
                                       
Instrument Panel Support Structure (per vehicle)
                                       5
                                       1
                                       
Brake Drums  -  Drive (per 4)
                                      140
                                      11
                                       
Brake Drums  -  Non Drive (per 2)
                                      60
                                       8
                                       
Frame Rails (per vehicle)
                                      440
                                      87
                                       
Crossmember  -  Cab (per vehicle)
                                      15
                                       5
                                       
Crossmember  -  Suspension (per vehicle)
                                      25
                                       6
                                       
Crossmember  -  Non Suspension ( per 3)
                                      15
                                       5
                                       
Fifth Wheel (per vehicle)
                                      100
                                      25
                                       
Radiator Support (per vehicle)
                                      20
                                       6
                                       
Fuel Tank Support Structure (per vehicle)
                                      40
                                      12
                                       
Steps (per vehicle)
                                      35
                                       6
                                       
Bumper (per vehicle)
                                      33
                                      10
                                       
Shackles (per vehicle)
                                      10
                                       3
                                       
Front Axle (per vehicle)
                                      60
                                      15
                                       
Suspension Brackets, Hangers (per vehicle)
                                      100
                                      30
                                       
Transmission Case (per vehicle)
                                      50
                                      12
                                       
Clutch Housing (per vehicle)
                                      40
                                      10
                                       
Drive Axle Hubs (per 4)
                                      80
                                      20
                                       
Non Drive Front Hubs (per 2)
                                      40
                                       5
                                       
Driveshaft (per vehicle)
                                      20
                                       5
                                       
Transmission/Clutch Shift Levers (per vehicle)
                                      20
                                       4
                                       

Table III-36 Proposed Phase 2 Weight Reduction Values for Other Components
Weight Reduction Technology
                               Weight Reduction
                                     (lb)
6x2 axle configuration  in tractors
                                      300
4x2 axle configuration in Class 8 tractors
                                      300
Tractor engine with displacement less than 14.0L
                                      300
CI Liquified Natural Gas tractor
                                    -600[,]
SI Compressed Natural Gas tractor
                                     -525
CI Compressed Natural Gas tractor
                                     -900

    GEM Inputs 
The agencies propose to continue to require the Phase 1 GEM inputs for tractors in Phase 2.  These inputs include the following:
         * Steer tire rolling resistance,
         * Drive tire rolling resistance,
         * Coefficient of Drag Area,
         * Idle Reduction, and 
         * Vehicle Speed Limiter.
As discussed above in Section II.C and III.D, there are several additional inputs that are proposed for Phase 2.  The new GEM inputs proposed for Phase 2 include the following:
         * Engine information including manufacturer, model, combustion type, fuel type, family name, and calibration identification
         * Engine fuel map,
         * Engine full-load torque curve,
         * Engine motoring curve,
         * Transmission information including manufacturer and model
         * Transmission type,
         * Transmission gear ratios,
         * Drive axle ratio,
         * Loaded tire radius for drive tires, and 
         * Other pre-defined technology inputs.
The agencies welcome comments on the inclusion of these proposed technologies into GEM in Phase 2.
    Vehicle Speed Limiters and Extended Idle Provisions 
The agencies received comments during the development of Phase 1 that the Clean Air Act provisions to prevent tampering (Section 202 (a)(3) (A) of the Act; 42 U.S.C. 7522(a)(3)(A)) of vehicle speed limiters and extended idle reduction technologies would prohibit their use for demonstrating compliance with the Phase 1 standards.  In Phase 1, the agencies adopted provisions to allow for discounted credits for idle reduction technologies that allowed for override conditions and expiring engine shutdown systems (see 40 CFR 1037.660).  Similarly, the agencies adopted provisions to allow for "soft top" speeds and expiring vehicle speed limiters (see 40 CFR 1037.640).  However, as we develop Phase 2, we understand that the concerns still exist.  The agencies welcome suggestions on how to close the gap between the provisions that would be acceptable to the industry while maintaining our need to ensure that modifications do not violate 42 U.S.C. 7522(a)(3)(A).
    Emission Control Labels
EPA considers it crucial that field inspectors are able to identify whether a vehicle is certified, and if so whether it is in the certified condition.  To facilitate this identification in Phase 1, EPA adopted labeling provisions for tractors that included several items.  The Phase 1 tractor label must include the manufacturer, vehicle identifier such as the Vehicle Identification Number (VIN), vehicle family, regulatory subcategory, date of manufacture, compliance statements, and emission control system identifiers (see 40 CFR 1037.135).  In Phase 1, the emission control system identifiers are limited to vehicle speed limiters, idle reduction technology, tire rolling resistance, some aerodynamic components, and other innovative and advanced technologies.  The number of proposed emission control systems for greenhouse gas emissions in Phase 2 has increased significantly.  For example, the engine, transmission, drive axle ratio, accessories, tire radius, wind averaged drag, predictive cruise control, and automatic tire inflation system are controls which can be evaluated on-cycle in Phase 2 (i.e. these technologies' performance can now be input to GEM), but could not be in Phase 1.  Due to the significant complexity in determining greenhouse gas emissions as proposed in Phase 2, EPA does not believe that we can appropriately assess whether a vehicle is in a certified condition or not through simply comparing information that could be made available on an emission control label with the components installed on a vehicle.  Therefore, EPA proposes to remove the requirement to include the emission control system identifiers required in 40 CFR 1037.135(b)(6) and in Appendix III to 40 CFR part 1037 from the emission control labels for vehicles certified to the Phase 2 standards.  We are not proposing to modify the existing emission control labels for tractors certified to the Phase 1 CO2 standards.  
[Additional text on labeling and compliance to be added.]
    End of Year Reports
In the Phase 1 program, manufacturers participating in the ABT program provided 90 day and 270 day reports to EPA and NHTSA after the end of the model year.  The agencies adopted two reports for the initial program to help manufacturers become familiar with the reporting process.  For the HD Phase 2 program, the agencies propose to simplify reporting such that manufacturers would only be required to submit the final report 90 days after the end of the model year with the potential to obtain approval for a delay up to 30 days.  We are accordingly proposing to eliminate the end of year report, which represents a preliminary set of ABT figures for the preceding year.  We welcome comment on this proposed revision. 
    Special Compliance Provisions
In Phase 2, the agencies propose to consider the performance of the engine, transmission, and drivetrain in determining compliance with the Phase 2 tractor standards.  With the inclusion of the engine's performance in the vehicle compliance, EPA proposes to modify the prohibition to introducing into U.S. commerce a tractor containing an engine not certified for use in tractor (see 40 CFR 1037.601(d)).  In Phase 2, we no longer see the need to prohibit the use of vocational engines in tractors because the performance of the engine would be appropriately reflected in GEM.  We welcome comment on removing this prohibition.
The agencies also propose to change the compliance process for manufacturers seeking to use the off-road exclusion.  During the Phase 1 program, manufacturers realized that contacting the agencies in advance of the model year was necessary to determine whether vehicles would qualify for exemption and need approved certificates of conformity.   The agencies found that the petition process allowed at the end of the model year was not necessary and that an informal approval during the precertification period was more effective.  Therefore, NHTSA is proposing to remove its off-road petitioning process in 49 CFR 535.8(h) and EPA is proposing to add requirements for informal approvals in 40 CFR 1037.610.
    Chassis Dynamometer Testing Requirement
The agencies foresee the need to continue to track the progress of the Phase 2 program throughout its implementation.  The agencies expect to evaluate the overall performance of tractors with the GEM results provided by manufacturers through the end of year reports.  However, we also need to continue to have confidence in our simulation tool, GEM, as the vehicle technologies continue to evolve.  Therefore, EPA proposes that the manufacturers conduct annual chassis dynamometer testing of one sleeper cab tractor and one day cab tractor and provide the data and the GEM result from each of these two tractor configurations to EPA.
         Flexibility Provisions
EPA and NHTSA are proposing two flexibility provisions specifically for heavy-duty tractor manufacturers in Phase 2.  These are an averaging, banking and trading program for CO2 emissions and fuel consumption credits, as well as provisions for credits for off-cycle technologies which are not included as inputs to the GEM.  Credits generated under these provisions can only be used within the same averaging set which generated the credit.   
The agencies are also proposing to remove or modify several Phase 1 interim provisions, as described below.
Averaging, Banking, and Trading (ABT) Program
Averaging, banking, and trading of emission credits have been an important part of many EPA mobile source programs under CAA Title II, and the NHTSA light-duty CAFE program.  The agencies also included this flexibility in the HD Phase 1 program.  ABT provisions are useful because they can help to address many potential issues of technological feasibility and lead-time, as well as considerations of cost.  They provide manufacturers flexibilities that assist in the efficient development and implementation of new technologies and therefore enable new technologies to be implemented at a more aggressive pace than without ABT.  A well-designed ABT program can also provide important environmental and energy security benefits by increasing the speed at which new technologies can be implemented.  Between MYs 2013 and 2014 all four tractor manufacturers are taking advantage of the ABT provisions in the Phase 1 program.  NHTSA and EPA propose to carry-over the Phase 1 ABT provisions for tractors into Phase 2.
The agencies propose to continue the five year credit life and three year deficit carry-over provisions from Phase 1 (40 CFR 1037.740(c) and 1037.745).  Please see additional discussion in Section I.C.1.b.  Although we are not proposing any additional restrictions on the use of Phase 1 credits, we are requesting comment on this issue.  Early indications suggest that positive market reception to the Phase 1 technologies could lead to manufacturers accumulating credits surpluses that could be quite large at the beginning of the proposed Phase 2 program.  This appears especially likely for tractors.  The agencies are specifically requesting comment on the likelihood of this happening, and whether any regulatory changes would be appropriate.  For example, should the agencies limit the amount of credits than could be carried over from Phase 1 or limit them to the first year or two of the Phase 2 program?  Also, if we determine that large surpluses are likely, how should that factor into our decision on the feasibility of more stringent standards in MY 2021?  In addition, the agencies request comment on methods to correlate Phase 1 credits with Phase 2 credits due to the changes in test procedures between the two programs.
We welcome comments on these proposed flexibilities and are interested in information that may indicate doing as proposed could distort the heavy-duty vehicle market.
Off-Cycle Technology Credits
In Phase 1, the agencies adopted an emissions and fuel consumption credit generating opportunity that applied to innovative technologies that reduce fuel consumption and CO2 emissions.  These technologies were required to not be in common use with heavy-duty vehicles before the 2010MY and not reflected in the GEM simulation tool (i.e., the benefits are "off-cycle").  See 76 FR at 57253.  The agencies propose to absorb the Phase 1 innovative technology program into the off-cycle program for Phase 2.  In other words, beginning in 2021 MY all technologies that are not fully accounted for in the GEM simulation tool, or by compliance dynamometer testing could be considered off-cycle, including those technologies that may have been considered innovative technologies in Phase 1 of the program.   For additional information on the treatment of off-cycle technologies see Section I.C.1.c.
The agencies are proposing a split process for handling off-cycle technologies in Phase 2.  First, there is a set of predefined off-cycle technologies that are entering the market today, but could be fully-recognized in our proposed HD Phase 2 certification procedures.  Examples of such technologies include predictive cruise control, 6x2 axles, axle lubricants, automated tire inflation systems, and air conditioning efficiency improvements.  For these technologies, the agencies propose to define the effectiveness value of these technologies similar to the approach taken in the MY2017-2025 light-duty rule (see 77 FR at 62832-840 (October 15, 2012)).  These default effectiveness values could be used as valid inputs to Phase 2 GEM.  The proposed effectiveness value of each technology is discussed above in Section III.D.2.
The agencies also recognize that there are emerging technologies today that are being developed, but would not be accounted for in the GEM inputs, therefore would be considered off-cycle.  These technologies could include systems such as efficient steering systems, cooling fan optimization, and further tractor-trailer integration.  These off-cycle technologies could include known, commercialized technologies if they are not yet widely utilized in a particular heavy-duty sector subcategory.  Any credits for these technologies would need to be based on real-world fuel consumption and GHG reductions that can be measured with verifiable test methods using representative driving conditions typical of the engine or vehicle application.
The agencies propose that the approval for Phase 1 innovative technology credits (approved prior to 2021 MY) would be carried into the Phase 2 program on a limited basis for those technologies where the benefit is not accounted for in the Phase 2 test procedure.  Therefore, the manufacturers would not be required to request new approval for any innovative credits carried into the off-cycle program, but would have to demonstrate the new cycle does not account for these improvements beginning in the 2021 MY.  The agencies believe this is appropriate because technologies, such as those related to the transmission or driveline, may no longer be "off-cycle" because of the addition of these technologies into the Phase 2 version of GEM. The agencies also seek comments on whether off-cycle technologies in the Phase 2 program should be limited by infrequent common use and by what model years, if any.  We also seek comments on an appropriate penetration rate for a technology not to be considered in common use.
As in Phase 1, the agencies are proposing to continue to provide two paths for approval of the test procedure to measure the CO2 emissions and fuel consumption reductions of an off-cycle technology used in the HD tractor.  See proposed 40 CFR 1037.610 and 49 CFR 535.7.  The first path would not require a public approval process of the test method.  A manufacturer could use "pre-approved" test methods for HD vehicles including the A-to-B chassis testing, powerpack testing or on-road testing.  A manufacturer may also use any developed test procedure that has known quantifiable benefits.  A test plan detailing the testing methodology would be required to be approved prior to collecting any test data.  The agencies are also proposing to continue the second path, which includes a public approval process of any testing method that could have questionable benefits (i.e., an unknown usage rate for a technology).  Furthermore, the agencies are proposing to modify their provisions to clarify what documentation must be submitted for approval, which would align them with provisions in 40 CFR 86.1869-12. NHTSA is separately proposing to prohibit credits from technologies addressed by any of its crash avoidance safety rulemakings (i.e., congestion management systems).  See 77 FR 62733/2-3 (discussing similar issues in the context of the light-duty fuel economy and greenhouse gas reduction standards).  We welcome recommendations on how to improve or streamline the off-cycle technology approval process.  
Post Useful Life Modifications
Under 40 CFR part 1037, it is generally prohibited for any person to remove or render inoperative any emission control device installed to comply with the requirements of part 1037.  However, in 40 CFR 1037.655 EPA clarifies that certain vehicle modifications are allowed after a vehicle reaches the end of its regulatory useful life.  EPA is proposing to continue this provision and requests comment on it.  
This section states (as examples) that it is generally allowable to remove tractor roof fairings after the end of the vehicle's useful life if the vehicle will no longer be used primarily to pull box trailers, or to remove other fairings if the vehicle will no longer be used significantly on highways with vehicle speed of 55 miles per hour or higher.  More generally, this section clarifies that owners may modify a vehicle for the purpose of reducing emissions, provided they have a reasonable technical basis for knowing that such modification will not increase emissions of any other pollutant.  This essentially requires the owner to have information that would lead an engineer or other person familiar with engine and vehicle design and function to reasonably believe that the modifications will not increase emissions of any regulated pollutant.  
This section also makes clear that no person may ever disable a vehicle speed limiter prior to its expiration point, or remove aerodynamic fairings from tractors that are used primarily to pull box trailers on highways.  It is also clear that this allowance does not apply with respect to engine modifications or recalibrations.  
This section does not apply with respect to modifications that occur within the useful life period, other than to note that many such modifications to the vehicle during the useful life and to the engine at any time are presumed to violate 42 U.S.C 7522(a)(3)(A).
Other Interim Provisions
In HD Phase 1, EPA adopted provisions to delay the onboard diagnostics (OBD) requirements for heavy-duty hybrid powertrains (see 40 CFR 86.010-18(q)).  This provision delayed full OBD requirements for hybrids until 2016 and 2017 model years.  In discussion with manufacturers during the development of Phase 2, the agencies have learned that meeting the on-board diagnostic requirements for criteria pollutant engine certification continues to be a potential impediment to adoption of hybrid systems.  See Section XIV.A.1 for a discussion of regulatory changes proposed to reduce the non-GHG certification burden for engines paired with hybrid powertrain systems. 
Phase 1 Flexibilities Not Proposed for Phase 2
The Phase 1 advanced technology credits were adopted to promote the implementation of advanced technologies, such as hybrid powertrains, Rankine cycle engines, all-electric vehicles, and fuel cell vehicles (see 40 CFR 1037.150(i)).  As the agencies stated in the Phase 1 final rule, the Phase 1 standards were not premised on the use of advanced technologies but we expected these advanced technologies to be an important part of the Phase 2 rulemaking (76 FR 57133, September 15, 2011).  The proposed HD Phase 2 heavy-duty engine and tractor standards are premised on the use of Rankine-cycle engines, therefore the agencies believe it is no longer appropriate to provide extra credit for this technology.  While the agencies have not premised the proposed HD Phase 2 tractor standards on hybrid powertrains, fuel cells, or electric vehicles, we also foresee some limited use of these technologies in 2021 and beyond.  Therefore, we propose to not provide advanced technology credits in Phase 2 for any technology, but we welcome comments on the need for such incentive.
Also in Phase 1, the agencies adopted early credits to create incentives for manufacturers to introduce more efficient engines and vehicles earlier than they otherwise would have planned to do (see 40 CFR 1037.150(a)).  The agencies are not proposing to extend this flexibility to Phase 2 because the ABT program from Phase 1 will be available to manufacturers in 2020 model year and this would displace the need for early credits.  



Trailers
As mentioned in Section III, trailers pulled by Class 7 and 8 tractors (together considered "tractor-trailers") account for approximately two-thirds of the heavy-duty sector's total CO2 emissions and fuel consumption.  Because neither trailers nor the tractors that pull them are useful by themselves, it is the combination of the tractor and the trailer that forms the useful vehicle.  Although trailers do not directly generate exhaust emissions or consume fuels (except for the refrigeration units on refrigerated trailers), their designs and operation nevertheless contribute substantially to the CO2 emissions and diesel fuel consumption of the tractors pulling them.  See also section I.E (1) and (2) above. 
The agencies are proposing standards for trailers specifically designed to be pulled by Class 7 and 8 tractors.  These proposed standards are expressed as CO2 and fuel consumption standards, and would apply to each trailer with respect to the emissions and fuel consumption that would be expected for a specific standard type of tractor pulling such a trailer.  Note that this approach is discussed in more detail later.  Nevertheless, EPA and NHTSA believe it is appropriate to establish standards for trailers separately from tractors because they are separately manufactured by distinct companies; the agencies are not aware of any manufacturers that currently assemble both the finished tractor and the trailer.   
Summary of Trailer Consideration in Phase 1
    In the Phase 1 program, the agencies did not regulate trailers, but discussed how we might do so in the future (see 76 FR 57362).  We chose not to regulate trailers at that time, primarily because of the lack of a proposed test procedure, as well as the technical and policy issues at that time.  The agencies also noted the large number of small businesses in this industry, the possibility that regulations would substantially impact these small businesses, and the agencies' consequent obligations under the Small Business Regulatory Enforcement Fairness Act.  However, the agencies did indicate the potential CO2 and fuel consumption benefits of including trailers in the program and we committed to consider establishing standards for trailers in future rulemakings.  
In the Phase 1 proposal, the agencies solicited general comments on controlling CO2 emissions and fuel consumption through future trailer regulations (see 75 FR at 74345-51).  Although we neither proposed nor finalized trailer regulations at that time, the agencies have considered those comments in developing this proposal.  This notice proposes the first EPA regulations covering trailer manufacturers for CO2 emissions (or any other emissions), and the first fuel consumption regulations by NHTSA for these manufacturers.  The agencies intend for this program to be a unified national program so that when a trailer model complies with EPA's standards it will also comply with NHTSA's standards.    
The Trailer Industry
Industry Characterization
The trailer industry encompasses a wide variety of trailer applications and designs.  Among these are box trailers (dry vans and refrigerated vans of all sizes) and "non-box" trailers, including platform (sometimes called "flatbed"), tanker, container chassis, bulk, dump, grain, and many specialized types of trailers, such as car carriers, pole trailers, and logging trailers.  Most trailers are designed for predominant use on paved streets, roads, and highways (called "highway trailers" for purposes of this proposed rule).  A relatively small number of trailers are designed for dedicated use in logging and mining operations or for use in applications that we expect would involve little or no time on paved roadways.  A more detailed description of the characteristics that distinguish these trailers is included in Section IV.C.(5).
The trailer manufacturing industry is very competitive, and manufacturers are highly responsive to their customers' diverse demands.  The wide range of trailer designs and features reflects the broad variety of customer needs, chief among them typically being the ability to maximize the amount of freight the trailer can transport.  Other design goals reflect the numerous, more specialized customer needs.  
Box trailers are the most common type of trailer and are made in many different lengths, generally ranging from 28 feet to 53 feet.  While all have a rectangular shape, they can vary widely in basic construction design (internal volume and weight), materials (steel, fiberglass composites, aluminum, and wood) and the number and configuration of axles (usually two axles closely spaced, but number and spacing of axles can be greater).  Box trailer designs may also include additional features, such as one or more side doors, out-swinging or roll-up rear doors, side or rear lift gates, and numerous types of undercarriage accessories.  
Non-box trailers are uniquely designed to transport a specific type of freight.  Platform trailers carry cargo that may not be easily contained within or loaded and unloaded into a box trailer, such as large, nonuniform equipment or machine components.  Tank trailers are often pressure-tight enclosures designed to carry liquids, gases or bulk, dry solids and semi-solids.  There are also a number of other specialized trailers such as grain, dump, automobile hauler, livestock trailers, construction and heavy-hauling trailers.
Chapter 1 of the Draft RIA includes a more thorough characterization of the trailer industry.  The agencies have considered the variety of trailer designs and applications in developing the proposed CO2 emissions and fuel consumption standards for trailers.   
Historical Context for Proposed Trailer Provisions
SmartWay Program 
EPA's voluntary SmartWay Transport Partnership program encourages businesses to take actions that reduce fuel consumption and CO2 emissions while cutting costs.  (See Section I.A.2.f above).  SmartWay staff work with the shipping, logistics, and carrier communities to identify low carbon strategies and technologies across their transportation supply chains.  It is a voluntary, fleet-targeted program that provides an objective ranking of a fleet's freight efficiency relative to its competitors.  SmartWay Partners commit to adopting fuel-saving practices and technologies relative to a baseline year as well as tracking their progress.  
EPA's SmartWay program has accelerated the availability and market penetration of advanced, fuel efficient technologies and operational practices.  In conjunction with the SmartWay Partners Program, EPA established a testing, verification, and designation program, the SmartWay Technology Program, to help freight companies identify the equipment, technologies, and strategies that save fuel and lower emissions.  SmartWay verifies the performance of aerodynamic equipment and low rolling resistance tires and maintains a list of verified technologies on its website.  The trailer aerodynamic technologies verified are grouped in bins that represent one percent, four percent, or five percent fuel savings relative to a typical long-haul tractor-trailer at 65-mph cruise conditions.  Historically, use of verified aerodynamic devices totaling at least five percent fuel savings, along with verified tires, qualifies a 53-foot dry van trailer for the "SmartWay Trailer" designation.  In 2014, EPA expanded the program to qualify trailers as "SmartWay Elite" if they use verified tires and aerodynamic equipment providing nine percent or greater fuel savings.  The 2014 updates also expanded the SmartWay-designated trailer eligibility to include 53-foot refrigerated van trailers in addition to 53-foot dry van trailers.  
The SmartWay Technology Program continues to improve the technical quality of data that EPA and stakeholders need for verification.  EPA bases its SmartWay verifications on common industry test methods using SmartWay-specified testing protocols.  Historically, SmartWay's aerodynamic equipment verification was performed using the SAE J1321 test procedure, which measures fuel consumption as the test vehicle drives laps around a test track.  Under SmartWay's 2014 updates, EPA expanded its trailer designation and equipment verification programs to allow additional testing options.  The updates included a new, more stringent 2014 track test protocol based on SAE's 2012 update to its SAE J1321 test method, as well as protocols for wind tunnel, coastdown, and possibly computational fluid dynamics (CFD) approaches.  These new protocols are based on stakeholder input, the latest industry standards (i.e., 2012 versions of the SAE fuel consumption and wind tunnel test methods), EPA's own testing and research, and lessons learned from years of implementing technology verification programs.  Wind tunnel, coastdown, and CFD testing produce values for aerodynamic drag improvements in terms of coefficient of drag (CD), which is then related to projected fuel savings using a mathematical curve.
SmartWay verifies tires based on test data submitted by tire manufacturers demonstrating the CRR of their tires using either the SAE J1269 or ISO 28580 test methods.  These verified tires have rolling resistance targets for each axle position on the tractor-trailer.  SmartWay-verified trailer tires achieve a coefficient of rolling resistance (CRR) of 5.1 kg/metric ton or less on the ISO28580 test method.  An operator who replaces the trailer tires with SmartWay-verified tires can expect fuel consumption savings of one percent or more at a 65-mph cruise.  Operators who apply SmartWay-verified tires on both the trailer and tractor can achieve three percent fuel consumption savings at 65-mph.  
Over the last decade, SmartWay partners have demonstrated measureable fuel consumption benefits by adding aerodynamic features and low rolling resistance tires to their 53-foot dry van trailers.  To date, SmartWay has verified over 70 technologies, including nine packages from five manufacturers that have received the Elite designation.  The SmartWay Transport program has worked with over 3,000 partners, the majority of which are trucking fleets, and broadly throughout the supply-chain industry, since 2004.  These relationships, combined with the Technology Program's extensive involvement in the HD vehicle technology industry, have provided EPA with significant experience in freight fuel efficiency.  Furthermore, the more than 10-year duration of the voluntary SmartWay Transport Partnership has resulted in significant fleet and manufacturer experience with innovating and deploying technologies that reduce CO2 emissions and fuel consumption.  
California Tractor-Trailer Greenhouse Gas Regulation 
The state of California passed the Global Warming Solutions Act of 2006 (Assembly Bill 32, or AB32), enacting the state's 2020 greenhouse gas emissions reduction goal into law.  Pursuant to this Act, the California Air Resource Board (CARB) was required to begin developing early actions to reduce GHG emissions.  As a part of a larger effort to comply with AB32, the California Air Resource Board issued a regulation entitled "Heavy-Duty Greenhouse Gas Emission Reduction Regulation" in December 2008.  
This regulation reduces GHG emissions by requiring improvement in the efficiency of heavy-duty tractors and 53 foot or longer dry and refrigerated box trailers that operate in California.  The program is being phased in between 2010 and 2020.  Small fleets have been allowed special compliance opportunities to phase in the retrofits of their existing trailer fleets through 2017.  The regulation requires affected trailer fleet owners to either use SmartWay-verified trailers or to retrofit trailers with SmartWay-verified technologies.  The efficiency improvements are achieved through the use of aerodynamic equipment and low rolling resistance tires on both the tractor and trailer.  EPA has granted a waiver for this California program.
NHTSA Safety-Related Regulations for Trailers and Tires
NHTSA regulates new trailer safety through regulations. Table IV-1 lists the current regulations in place related to trailers.  Trailer manufacturers will continue to be required to meet current safety regulations for the trailers they produce.  We welcome any comments on additional regulations that are not included and particularly those that may be incompatible with the regulations outlined in this proposal.
FMVSS Nos. 223 and 224 require installation of rear guard protection on trailers.  The definition of rear extremity of the trailer in 223 limits installation of rear fairings to a specified zone behind the trailer.  The agencies request comment on any issues associated with installing potential boat tails or other rear aerodynamic fairings that would be more effective than current designs, given the current definition of trailer rear extremity in FMVSS 223.
Table IV-1  Current NHTSA Statutes and Regulations Related To Trailers
Reference
Title
49 CFR 565 
Vehicle Identification Number (VIN) Requirements 
49 CFR 566 
Manufacturer Identification 
49 CFR 567 
Certification 
49 CFR 568
Vehicles Manufactured in Two or More Stages
49 CFR 569 
Regrooved Tires 
49 CFR 571 
Federal Motor Vehicle Safety Standards 
49 CFR 573 
Defect and Noncompliance Responsibility and Reports 
49 CFR 574 
Tire Identification and Recordkeeping 
49 CFR 575 
Consumer Information 
49 CFR 576 
Record Retention 
Additional DOT Regulations Related to Trailers 
In addition to NHTSA's regulations, DOT's Federal Highway Administration (FHWA) regulates the weight and dimensions of motor vehicles on the National Network.  FHWA's regulations limit states from setting truck size and weight limits beyond certain ranges for vehicles used on the National Network.  Specifically, vehicle weight and truck tractor-semitrailer length and width are limited by FHWA.   EPA and NHTSA do not anticipate any conflicts between FHWA's regulations and those proposed in this rulemaking.
Agencies' Outreach in Developing This Proposal
In developing this proposed rule, EPA and NHTSA staff met and consulted with a wide range of organizations that have an interest in trailer regulations.  Staff from both agencies met representatives of the Truck Trailer Manufacturers Association, the National Trailer Dealers Association, and the American Trucking Association, including their Fuel Efficiency Advisory Committee and their Technology and Maintenance Council.  We also met with and visited the facilities of several individual trailer manufacturers, trailer aerodynamic device manufacturing companies, and trailer tire manufacturers, as well as visited an aerodynamic wind tunnel test facility and two independent tire testing facilities.  The agencies consulted with representatives from California Air Resources Board, the International Council on Clean Transportation, the North American Council for Freight Efficiency, and several environmental NGOs. 
In addition to these informal meetings, and as noted above, EPA also conducted several outreach meetings with representatives from small business trailer manufacturers as required under section 609(b) of the Regulatory Flexibility Act (RFA) and amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).  EPA convened a Small Business Advocacy Review (SBAR) Panel, and additional information regarding the findings and recommendations of the Panel are available in Section XIV below and in the Panel's final report.  EPA worked with NHTSA to propose flexibilities in response to EPA's SBAR Panel (as outlined in Section IV. F (6) (f) with more detail provided in Chapter 12 of the draft RIA).  We welcome comments from all entities and the public to all aspects of this proposal.  
Proposed Phase 2 Trailer Standards
This NPRM proposes, for the first time, a set of CO2 emission and fuel consumption standards for manufacturers of new trailers that would phase in over a period of nine years and continue to reduce CO2 emissions and fuel consumption in the years to follow.  The proposed standards are expressed as overall CO2 emissions and fuel consumption performance standards considering the trailer as an integral part of the tractor-trailer vehicle.  
The agencies are proposing trailer standards that we believe well implement our respective statutory obligations.  The agencies believe that a proposed set of standards with similar stringencies, but less lead-time (referred to as "Alternative 4" and discussed in more detail later) has the potential to be the maximum feasible alternative within the meaning of section 32902 (k) of EISA, and appropriate under EPA's CAA authority (sections 202 (a)(1) and (2)).  However, based on the evidence currently before us, EPA and NHTSA have outstanding questions regarding relative risks and benefits of Alternative 4 due to the timeframe envisioned by that alternative.  The proposed alternative (referred to as "Alternative 3" and discussed in more detail later) is generally designed to achieve the levels of fuel consumption and GHG reduction that Alternative 4 would achieve, but with several years of additional lead-time.  Put another way, the Alternative 3 standards would result in the same stringency as the Alternative 4 standards, but several years later, meaning that manufacturers could, in theory apply new technology at a more gradual pace and with greater flexibility.  Additional lead-time will also provide for a more gradual implementation of full compliance program, which would be especially helpful for this newly-regulated trailer industry.  It is possible that the agencies could adopt, in full or in part, stringencies from Alternative 4 in the final rule.  The agencies seek comment on the lead-time and market penetration in these alternatives.  
The agencies are not proposing standards for CO2 emissions and fuel consumption from the transport refrigeration units (TRUs) used on refrigerated box trailers.  Additionally, EPA is not proposing standards for hydrofluorocarbon (HFC) emissions from TRUs.  See Section IV. C. (4) 
It is worth noting that the proposed standards for box trailers are based in part on the expectation that the proposed program would allow emissions averaging.  However, as discussed in Section IV. F. below, given the specific structure and competitive nature of the trailer industry, we request comment on the advantages and disadvantages of implementing the proposed standards without an averaging program.  Commenters addressing the stringency of the proposed standards are encouraged to address stringency in the context of compliance programs with and without averaging.
Trailer Designs Covered By This Proposed Rule
As described previously, the trailer industry produces many different trailer designs for many different applications.  As described in detail in Section IV.C below, the agencies are proposing standards that would phase in between MY 2018 and 2027; the NHTSA standards would be voluntary until MY 2021.  The proposed standards would apply to most types of trailers.  For most box trailers, these standards would be based on the use of various technologies to improve aerodynamic performance, and on improved tire efficiency through low rolling resistance tires and use of automatic tire inflation (ATI) systems.  As discussed below, the agencies have identified some trailers with characteristics that limit the aerodynamics that can be applied, and are proposing reduced the stringencies for those trailer types.  As described in Sections IV.D. (1)(d) and (2)(d) below, although manufacturers can reduce trailer weight to reduce fuel costs by reducing trailer weight, these standards are not predicated on weight reduction for the industry.
The most comprehensive set of proposed requirements would apply to long box trailers, which include refrigerated and non-refrigerated (dry) vans.  Long box trailers are the largest trailer category and are typically paired with high roof cab tractors that have high annual vehicle miles traveled (VMT) and high average speeds, and therefore offer the greatest potential for CO2 and fuel consumption reductions.  Many of the aerodynamic and tire technologies considered for long box trailers in this proposal are similar to those used in EPA's SmartWay program and required by California's Heavy-Duty Greenhouse Gas Emission Reduction Regulation.  Many manufacturers and operators of box trailers have experience with these CO2- and fuel consumption-reducing technologies.  In addition to SmartWay partners and those fleets affected by the California regulation, many operators also seek such technologies in response to high fuel prices and the prospect of improved fuel efficiency.  As a result, more data about the performance of these technologies exist for long box trailers than for other trailer types.  Short box vans do not have the benefit of programs such as SmartWay to provide an incentive for development of and a reliable evaluation and promotion of CO2- and fuel consumption-reducing technologies for their trailers.  In addition, short box trailers are more frequently used in short-haul and urban operations, which may limit the potential effectiveness of these technologies.  As such, EPA is proposing less stringent requirements for manufacturers of short box trailers.  
Some trailer designs include features that can affect the practicality or the effectiveness of devices that manufacturers may consider to lower their CO2 emissions and fuel consumption.  We are proposing to recognize box trailers that are restricted from using aerodynamic devices in one location on the trailer as "partial-aero" box trailers.  The proposed standards for these trailers are based on the proposed standards for full-aero box-trailers, with less aggressive stringencies when the program is fully phased in.    
We propose that box trailers that have work-performing devices in two locations such that they inhibit the use of all practical aerodynamic devices be considered "non-aero" box trailers in this proposal.  The proposed standards for non-aero box trailers are predicated on the use of tire technologies -- lower rolling resistance tires and ATI.  We are proposing similar standards for non-box trailers (including applications such as dump trailers and agricultural trailers that are designed to be used both on and off the highway) .    
We are proposing to completely exclude several types of trailers from this trailer program.  These excluded trailers would include those designed for dedicated in-field operations related to logging and mining.  In addition, we are proposing to exclude heavy-haul trailers and trailers the primary function of which is performed while they are stationary.  For all of these excluded trailers, manufacturers would not have any regulatory requirements under this program, and would not be subject to the proposed trailer compliance requirements.  We seek comment on the appropriateness of excluding these types of trailers from the proposed trailer program and whether other trailer designs should be excluded.  Section IV. C. (5) discusses these trailer types we propose to exclude and the physical characteristics that would define these trailers. 
In summary, the agencies are proposing separate standards for ten trailer subcategories:
         oo          Long box (longer than 50 feet) dry vans
         oo          Long box (longer than 50 feet) refrigerated vans
         oo          Short box (50 feet and shorter) dry vans
         oo          Short box (50 feet and shorter) refrigerated vans
         oo          Partial-aero long box dry vans
         oo          Partial-aero long box refrigerated vans
         oo          Partial-aero short box dry vans
         oo          Partial-aero short box refrigerated vans
         oo          Non-aero box vans (all lengths of dry and refrigerated vans)
         oo          Non-box trailers (tanker, platform, container chassis, and all other types of highway trailers that are not box trailers).
As discussed in the next section, partial-aero box trailers would have the same standards as their corresponding full-aero trailers in the early phase-in years, and would have separate, less stringent standards as the program is fully implemented.  Section IV. C. (5) introduces these proposed partial-aero trailer standards and Section IV. D. describes the technologies that could be applied to meet these proposed standards.  
Proposed Fuel Consumption and CO2 Standards
As described in previously, it is the combination of the tractor and the trailer that form the useful vehicle, and trailer designs substantially affect the CO2 emissions and diesel fuel consumption of the tractors pulling them.  Note that although the agencies are proposing new CO2 and fuel consumption standards for trailers separately from tractors, we set the numerical level of the trailer standards (see Section IV.D below) in relation to "standard" reference tractors in recognition of their interrelatedness.  In other words, the regulatory standards refer to the simulated emissions and fuel consumption of a standard tractor pulling the trailer being certified.
The agencies project that these proposed standards, when fully implemented in MY (model year) 2027, would achieve fuel consumption and CO2 emissions reductions of three to eight percent, depending on trailer subcategory.  These projected reductions assume a degree of technology adoption into the future absent the proposed program and are evaluated on a weighted drive cycle (see Section IV. D. (3) .  We expect that the MY 2027 standards would be met with high-performing aerodynamic and tire technologies largely available in the marketplace today.  With a lead-time of more than 10 years, the agencies believe that both trailer construction and bolt-on CO2- and fuel consumption-reducing technologies will advance well beyond the performance of their current counterparts that exist today.  A description of technologies that the agencies considered for this proposal is provided in Section IV. D.  
The agencies designed this proposed trailer program to ensure a gradual progression of both stringency and compliance requirements in order to limit the impact on this newly-regulated industry.  The agencies are proposing progressively more stringent standards in three-year stages leading up to the MY 2027.  The agencies are proposing several options to reduce compliance burden (see Section IV. F. ) in the early years as the industry gains experience with the program. EPA is proposing to initiate its program in 2018 with modest standards for long box dry and refrigerated vans that can be met with common SmartWay-verified aerodynamic and tire technologies.  In this early stage, we expect that manufacturers of the other trailer subcategories would meet those standards by using tire technologies only.  Standards that we propose for the next stages, which we propose to begin in MY 2021, MY 2024, and MY 2027, would gradually increase in stringency for each subcategory, including the introduction of standards for shorter box vans that we expect would be met by applying both aerodynamic and tire technologies.  NHTSA's regulations would be voluntary until MY 2021 as described in Section IV. C. (3) .       
Table IV-2 below presents the CO2 and fuel consumption phase-in standards, beginning in MY 2018 that the agencies are proposing for trailers.  The standards are expressed in grams of CO2 per ton-mile and gallons of fuel per 1000 ton-miles to reflect the load-carrying capacity of the trailers.  Partial-aero trailers would be subject to the same standards as their corresponding "full aero" trailers for MY 2018 through MY 2026.  In MY 2027 and the years to follow, partial-aero trailers would continue to meet the standards for MY 2024.  
The agencies are not proposing CO2 or fuel consumption standards predicated on aerodynamic improvements for non-box trailers or non-aero box vans at any stage of this proposed program.  Instead, we are proposing design standards that would require manufacturers of these trailers to adopt specific tire technologies and thus to comply without aerodynamic devices.  We believe that this approach would significantly limit the compliance burden for these manufacturers.  

Table IV-2  Proposed Trailer CO2 and Fuel Consumption Standards for Box Trailers
MODEL YEAR
SUBCATEGORY
                                    DRY VAN
                               REFRIGERATED VAN
LENGTH
                                     LONG
                                     SHORT
                                     LONG
                                     SHORT
2018 - 2020
EPA Standard 
                                      83
                                      144
                                      84
                                      147

(CO2 Grams per Ton-Mile)





Voluntary NHTSA Standard
                                    8.1532
                                    14.1454
                                    8.2515
                                    14.4401

(Gallons per 1,000 Ton-Mile)




2021 - 2023
EPA Standard
                                      81
                                      143
                                      82
                                      146

(CO2 Grams per Ton-Mile)





NHTSA Standard
                                    7.9568
                                    14.0472
                                    8.0550
                                    14.3418

(Gallons per 1,000 Ton-Mile)




2024 - 2026
EPA Standard
                                      79
                                      141
                                      81
                                      144

(CO2 Grams per Ton-Mile)





NHTSA Standard
                                    7.7603
                                    13.8507
                                    7.9568
                                    14.1454

(Gallons per 1,000 Ton-Mile)




2027 +
EPA Standard
                                      77
                                      140
                                      80
                                      144

(CO2 Grams per Ton-Mile)





NHTSA Standard
                                    7.5639
                                    13.7525
                                    7.8585
                                    14.1454

(Gallons per 1,000 Ton-Mile)





Differences in the numerical values of these standards among trailer subcategories are due to differences in the tractor-trailer characteristics, as well as differences in the default payloads used in the vehicle simulation model used for trailer compliance (as described in Section IV. D. (3) (a) below).  Lower numerical values in Table IV-2 do not necessarily indicate more stringent standards.  For instance, the proposed standards for dry and refrigerated vans of the same length have the same stringency through MY 2026, but the standards recognize differences in trailer weight and aerodynamic performance due to the TRU on refrigerated vans.  Trailers of the same type but different length differ in weight as well as in the number of axles (and tires), tractor type, payload and aerodynamic performance.  Section IV. D. and Chapter 2.10 of the draft RIA provide more details on the characteristics of the tractor-trailer vehicles, with various technologies, that are the basis for these standards.  
    In developing the proposed standards for trailers, the agencies evaluated the current level of CO2 emissions and fuel consumption, the types and availability of technologies that could be applied to reduce CO2 and fuel consumption, and the current adoption rates of these technologies.  Additionally, we considered the necessary lead-time and associated costs to the industry to meet these standards, as well as the fuel savings to the consumer and magnitude of CO2 and fuel savings that we project would be achieved as a result of these proposed standards.  As discussed in more detail later in this preamble and in Chapter 2.10 of the draft RIA, the analyses of trailer aerodynamic and tire technologies that the agencies have conducted appear to show that these proposed standards would be the maximum feasible and appropriate in the lead-time provided under each agency's respective statutory authorities.  We ask that any comments related to stringency include data whenever possible indicating the potential effectiveness and cost of adding such devices to these vehicles.
The agencies request comment on all aspects of these proposed standards, including trailers to be covered and the proposed 50-foot demarcation between "long" and "short" box vans, the proposed phase-in schedule, and the stringency of the standards in relation to their cost, CO2 and fuel consumption reductions, and on the proposed compliance provisions, as discussed in Section IV. F.  
In addition to these proposed trailer standards, the agencies considered standards both less stringent and more stringent than the proposed standards.  We specifically request comment on a set of accelerated standards that we considered, as presented in Section IV. E.  This set of standards is predicated on performance and penetration rates of the same technologies as the proposed standards, but would reach full implementation three years sooner.  
Lead-time Considerations
As mentioned earlier, although the agencies did not include standards for trailers in Phase 1, box trailer manufacturers have been gaining experience with CO2- and fuel consumption-reducing technologies over the past several years, and the agencies expect that trend to continue, due in part to EPA's SmartWay program and California's Tractor-Trailer Greenhouse Gas Regulation.  Most manufacturers of long box trailers have some experience installing these aerodynamic and tire technologies for customers.  This experience impacts how much lead-time is necessary from a technological perspective.  EPA is proposing CO2 emission standards for long box trailers for MY 2018 that represent stringency levels similar to those used for SmartWay verification and required for the California regulation, and thus could be met by adopting off-the-shelf aerodynamic and tire technologies available today.  The NHTSA program from 2018 through 2020 would be voluntary.  
Manufacturers of trailers other than 53-foot box vans do not have the benefit of programs such as SmartWay to provide a reliable evaluation and promotion of these technologies for their trailers and therefore have less experience with these technologies.  As such, EPA is proposing less stringent requirements for manufacturers of other highway trailer subcategories beginning in MY 2018.  We expect these manufacturers of short box trailers would adopt some aerodynamic and tire technologies, and manufacturers of other trailers would adopt tire technologies only, as a means of achieving the proposed standards.  Some manufacturers of trailers other than long boxes may not yet have direct experience with these technologies, but the technologies they would need are fairly simple and can be incorporated into trailer production lines without significant process changes.  Also, the NHTSA program for these trailers would be voluntary until MY 2021.  
The agencies believe that the burdens of installing and marketing these technologies would not be limiting factors in determining necessary lead-time for manufacturers of these trailers.  Instead, we expect that the proposed first-time compliance and, in some cases, performance testing requirements, would be the more challenging obstacles for this newly regulated industry.  For these reasons, we are proposing that these standards phase in over a period of nine years, with flexibilities that would minimize the compliance and testing burdens in the early years of the proposed program (see Section IV. F. ).  
As mentioned previously, EPA is proposing modest standards and several compliance options that would allow it to begin its program for MY 2018.  However, EISA requires four model years of lead-time for fuel consumption standards, regardless of the stringency level or availability of flexibilities.  Therefore, NHTSA's proposed fuel consumption requirements would not become mandatory until MY 2021.  Prior to MY 2021, trailer manufacturers could voluntarily participate in NHTSA's program, noting that once they made such a choice, they would need to stay in the program for all succeeding model years.   
The agencies believe that the expected period of seven years or more between the issuing of the final rules and full implementation of the program would provide sufficient lead-time for all affected trailer manufacturers to adopt CO2- and fuel consumption-reducing technologies or design trailers to meet the proposed standards.  
Non-CO2 GHG Emissions from Trailers
In addition to the impact of trailer design on the CO2 emissions of tractor-trailer vehicles, the agencies recognize that refrigerated trailers can also be a source of emissions of HFCs.  Specifically, HFC refrigerants that are used in transport refrigeration units (TRUs) have the potential to leak into the atmosphere.  We do not currently believe that HFC leakage is likely to become a major problem in the near future, and we are not proposing provisions addressing refrigerant leakage of trailer-related HFCs in this proposed rulemaking.  TRUs differ from the other source categories where EPA has adopted (or proposed) to apply HFC leakage requirements (i.e., air conditioning).  We believe trailer owners have a strong incentive to limit refrigerant leakage in order to maintain the operability of the trailer's refrigeration unit and avoid financial liability for damage to perishable freight due to a failure to maintain the agreed-upon temperature and humidity conditions.  In addition, refrigerated van units represent a relatively small fraction of new trailers.  Nevertheless, we request comment on this issue, including any data on typical TRU charge capacity, the frequency of HFC refrigerant leakage from these units across the fleet, the magnitude of unaddressed leakage from individual units, and how potential EPA regulations might address this leakage issue.  
Exclusions and Less-Stringent Standards
All trailers built before January 1, 2018 are excluded from the Phase 2 trailer program, and from 40 CFR Part 1037 and 49 CFR Part 535 in general (see 1037.5(g) and 535.3(i)).  As stated previously, we are proposing that non-box trailers that are designed for dedicated use with in-field operations related to logging and mining be completely excluded from this Phase 2 trailer program.  The agencies believe that the operational capabilities of trailers designed for these purposes could be compromised by the use of aerodynamic devices or tires with lower rolling resistance.  Additionally, the agencies are proposing to exclude trailers designed for heavy-haul applications and those that are not intended for highway use, as follows:
         oo Trailers shorter than 35 feet in length with more than three axles, and all trailers with four or more axles
         oo Trailers designed to operate at low speeds such that they are unsuitable for normal highway operation
         oo Trailers designed to perform their primary function while stationary
         oo Trailers intended for temporary or permanent residence, office space, or other work space, such as campers, mobile homes, and carnival trailers
         oo Incomplete trailers that are sold to a secondary manufacturer for modification to serve a purpose other than transporting freight, such as for offices or storage  
Where the criteria for exclusion identified above may be unclear for specific trailer models, manufacturers would be encouraged to ask the agencies to make a determination before production begins.  The agencies seek comments on these and any other trailer characteristics that might make the trailers incompatible with highway use or would restrict their typical operating speeds. 
Because the agencies are proposing that these trailers be excluded from the program, we are not proposing to require manufacturers to report to the agencies about these excluded trailers.  We seek comments on whether, in lieu of the exclusion of trailers from the program, the agencies should instead exempt these trailers from the standards, but still require reporting to the agencies in order to verify that a manufacturer qualifies for an exemption. In that case, exempt trailers would have some regulatory requirements (e.g., reporting); again, excluded trailers would have no regulatory requirements under this proposal.  All other trailers would remain covered by the proposed standards.  
As described earlier, the proposed program is based on the expectation that manufacturers would be able to apply aerodynamic devices and tire technologies to the vast majority of box trailers, and these standards would be relatively stringent.  We propose to categorize trailers with functional components or work-performing equipment, and trailers with certain design elements, that could partially interfere with the installation or the effectiveness of some aerodynamic technologies, as "partial-aero" box trailers.  For example, some trailer equipment by their placement or their need for operator access might not be compatible with current designs of trailer skirts, but a boat tail could be effective on that trailer in the early years of the program.  Similarly, a rear lift gate or roll-up rear door might not be compatible with a current boat tail design, but skirts could be effective.  The proposed requirements for these trailers would the same as their full-aero counterparts until MY 2027, at which time they would continue to be subject to the MY 2024 standards.  See 40 CFR 1037.107.    
For trailers for which no aerodynamic devices are practical, the agencies are proposing design standards requiring LRR tires and ATI systems.  Trailers for which neither skirt/under-body devices nor rear-end devices would be likely to be feasible fall into two categories: non-box trailers and non-aero box trailers.  We believe that there is limited availability of aerodynamic technologies for non-box trailers (for example, platform (flatbed) trailers, tank trailers, and container chassis trailers).  Also, for container chassis trailers, operational considerations, such as stacking of the chassis trailers, impede introduction of aerodynamic technologies.  In addition, manufacturers of these trailer types have little or no experience with aerodynamic technologies designed for their products. Non-aero box trailers, defined as those with equipment or design features that would preclude both skirt/under-body and rear-end aerodynamic technologies (e.g., a trailer with both a pull-out platform for side access and a rear lift gate), would be subject to the same tire-only design standards as would non-box trailers, based exclusively on the performance of tire and ATI technologies.  
We recognize that the shortest short box vans (i.e., less than 35 feet) are often pulled in tandem.  Since these trailers make up the majority of trailers in the short box van subcategories, we are not proposing standards for short box dry and refrigerated vans based on the use of rear devices.  Thus, work-performing features on the rear of the trailer (e.g., lift gates) would not impact a trailer's ability to meet the full-aero short-box trailer standards.  As a result, we are proposing that all short box vans only be categorized as partial-aero vans if they have work-performing side features (e.g., belly boxes).  We expect that partial-aero short dry van trailers would be able to adopt front-side devices that would achieve the reduced standards.  Furthermore, some short box trailers that are not operated in tandem, such as 40- or 48-foot trailers, could also be able to adopt rear-side devices and achieve even greater reductions.  
Refrigerated short box vans are a special case in that they have TRUs that limit the ability to apply aerodynamic technologies to the front side of the trailers.  Because of this, we are proposing to classify the shortest refrigerated box vans (shorter than 35 feet) as non-aero trailers if they are designed with work-performing side features.  Since these trailers may be pulled in tandem and since they cannot adopt front-side aerodynamic devices, we propose that they meet standards predicated on tire technologies only.  Short box refrigerated trailers 35 feet and longer would only qualify for non-aero standards if they have work-performing devices on both the side and rear of the trailer.  See 40 CFR 1037.107.
We request comment on these proposed provisions for excluding some trailers from the program, including speed restrictions and physical characteristics that would generally make them incompatible for highway use.  We also request comment on the proposed approach of applying less-stringent standards to non-box, non-aero box, and partial-aero box trailers.     
In-Use Standards
Consistent with Section 202(a)(1) of the CAA, EPA is proposing that the emissions standards apply for the useful life of the trailers.  Aerodynamic devices available today, including trailer skirts, rear fairings, under-body devices, and gap-reducing fairings, are designed to maintain their physical integrity for the life of the trailer.  In the absence of failures like detachment, breakage, or misalignment, we expect that the aerodynamic performance of the devices will not degrade appreciably over time and that the projected CO2 and fuel consumption reductions will continue for the life of the vehicle with no special maintenance requirements.  Because of this, EPA does not see a benefit to establishing separate standards that would apply in-use for trailers.  EPA and NHTSA are proposing a regulatory useful life value for trailers of 10 years, and thus the certification standards would apply in-use for that period of time.  See Section IV. F. (6) (a) for a discussion of other factors related to trailer useful life.
Feasibility of the Proposed Trailer Standards
As discussed below, the agencies' initial determination, subject to consideration of public comment, is that the standards presented in the Section IV.C.2, are the maximum feasible and appropriate under the agencies' respective authorities, considering lead time, cost, and other factors.  We summarize our analyses in this section, and describe them in more detail in the Draft RIA (Chapter 2.10).  
Our analysis of the feasibility of the proposed CO2 and fuel consumption standards is based on technology cost and effectiveness values collected from several sources.  Our assessment of the proposed trailer program is based on information from:
         oo          Southwest Research Institute evaluation of heavy-duty vehicle fuel efficiency and costs for NHTSA, 
         oo          2010 National Academy of Sciences report of Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles, 
         oo          TIAX's assessment of technologies to support the NAS panel report, 
         oo          The analysis conducted by the Northeast States Center for a Clean Air Future, International Council on Clean Transportation, Southwest Research Institute and TIAX for reducing fuel consumption of heavy-duty long haul combination tractors (the NESCCAF/ICCT study), 
         oo          The technology cost analysis conducted by ICF for EPA, and 
         oo          Testing conducted by EPA.   
         
  As an initial step in our analysis, we identified the extent to which fuel consumption- and CO2-reducing technologies are in use today.  
The technologies include those that reduce aerodynamic drag at the front, back, and underside of trailers, tires with lower rolling resistance, tire inflation technologies, and weight reduction through component substitution.  It should be noted that the agencies need not and did not attempt to predict the exact future pathway of the industry's response to the new standards, but rather demonstrated one example of how compliance could reasonably occur, taking into account cost of the standards (including costs of compliance testing and certification), and needed lead time.  We are proposing that full-aero box trailer manufacturers have additional flexibility in meeting the standards through averaging.  The less complex standards proposed for partial- and non-aero box and non-box trailers would still provide a degree of technology choices that would meet their standards.
For our feasibility analysis, we identified a set of technologies to represent the range of those likely to be used in the time frame of the rule.  We then combined these technologies into packages of increasing effectiveness in reducing CO2 and fuel consumption and projected reasonable rates at which the evaluated technologies and packages could be adopted across the trailer industry.  More details regarding our analysis can be found in Chapter 2.10.4.1 of the draft RIA.
The agencies developed the proposed CO2 and fuel consumption standards for each stage of the program by combining the projected effectiveness of trailer technologies and the projected adoption rates for each trailer type.  We evaluated these standards with respect to the cost of these technologies, the emission reductions and fuel consumption improvements achieved, and the lead-time needed to deploy the technology at a given adoption rate.
Unlike the other sectors covered by this Phase 2 rulemaking, trailer manufacturers do not have experience certifying under the Phase 1 program.  Moreover, a large fraction of the trailer industry is composed of small businesses and very few of the largest trailer manufacturers have the same resources available as manufacturers in the other heavy-duty sectors. The standards have been developed with this in mind, and we are confident the proposed standards can be achieved by manufacturers who lack prior experience implementing such standards.   
Available Technologies
Trailer manufacturers can design a trailer to reduce fuel consumption and CO2 emissions by addressing the trailer's aerodynamic drag, tire rolling resistance and weight.  In this section we outline the general trailer technologies that the agencies considered in evaluating the feasibility of the proposed standards.  
Aerodynamic Drag Reduction
Historically, the primary goal when designing the shape of box trailers has been to maximize usable internal cargo volume, while complying with regulatory size limits and minimizing construction costs.  This led to standard box trailers being rectangular.  This basic shape creates significant aerodynamic drag and makes box trailers strong candidates for aerodynamic improvements.  Current bolt-on aerodynamic technologies for box trailers are designed to create a smooth transition of airflow from the tractor, around the trailer, and beyond the trailer.  
Table IV-3 lists general aerodynamic technologies that the EPA SmartWay program has evaluated for use on box trailers and a description of their intended impact.  Several versions of each of these technologies are commercially available and have seen increased adoption over the past decade.  Performance of these devices varies based on their design, their location and orientation on the trailer, and the vehicle speed.  More information regarding the agencies' initial assessment of these devices, including incremental costs is discussed in Chapter 2.10 of the draft RIA.
Table IV-3 Aerodynamic Technologies for Box Trailers
Location on Trailer
Example Technologies
Intended Impact on Aerodynamics
Front
Front fairings and gap-reducing fairings
Reduce cross-flow through gap and smoothly transition airflow from tractor to the trailer
Rear
Rear fairings, boat tails and flow diffusers
Reduce pressure drag induced by the trailer wake
Underside
Side fairings and skirts, and underbody devices, 
Manage flow of air under the trailer to reduce turbulence, eddies and wake
As mentioned previously, SmartWay-verified technologies are evaluated on 53-foot dry vans.  However, the CO2- and fuel consumption-reducing potential of some aerodynamic technologies demonstrated on 53-foot dry vans can be translated to refrigerated vans and box trailers in lengths different than 53 feet and some fleets have opted to add trailer skirts to their refrigerated vans and 28-foot trailers (often called "pups").  In addition, some side skirts have been adapted for non-box trailers (e.g., tankers, platforms, and container chassis), and have shown potential for large reductions in drag.  At this time, however, non-box trailer aerodynamic devices are not widely available, with many still at the prototype stage.  The agencies encourage commenters to provide more information and data related to the effectiveness of technologies applied to trailers other than 53-foot dry and refrigerated vans.  
The agencies are aware that physical characteristics of some box trailers influence the technologies that can be applied.  For instance, the TRUs on refrigerated vans are located at the front of the trailer, which prohibits the use of current gap-reducers.  Similarly, drop deck dry vans have lowered floors between the landing gear and the trailer axles that limit the ability to use side skirts.  The agencies considered the availability and limitations of aerodynamic technologies for each trailer type evaluated in our feasibility analysis of the proposed and alternative standards.    
Tire Rolling Resistance
On a typical Class 8 long-haul tractor-trailer, over 40 percent of the total energy loss from tires is attributed to rolling resistance from the trailer tires.  Trailer tire rolling resistance values collected by the agencies for Phase 1 indicate that the average coefficient of rolling resistance (CRR) for new trailer tires was 6.0 kg/ton.  This value was applied for the standard trailer used for tractor compliance in the Phase 1 tractor program.  For Phase 2, the agencies consider all trailer tires with CRR values below 6.0 kg/ton to be "lower rolling resistance" (LRR) tires.  For reference, a trailer tire that qualifies as a SmartWay-verified tire must meet a CRR value of 5.1 kg/ton, a 15 percent CRR reduction from the trailer tire identified in Phase 1.  Our research of rolling resistance indicates an additional CRR reduction of 15 percent or more from the SmartWay verification threshold is possible with tires that are available in the commercial market today.
For this proposal, the agencies are proposing to use the same rolling resistance baseline value of 6.0 kg/ton for all trailer subcategories.  We request comment on the appropriateness of 6.0 kg/ton as the proposed CRR threshold for all regulated trailers.  Specifically, the agencies would like more information on current adoption rates of and CRR values for models of LRR tires currently in use on short box trailers and the various non-box trailers.
Similar to the case of tractor tires, LRR tires are available as either dual or as single wide-based tires for trailers.  Single wide-based tires achieve CRR values that are similar to their dual counterparts, but have an added benefit of weight reduction, which can be an attractive option for trailers that frequently maximize cargo weight. (See Section IV.D.1.d below). 
Tire Pressure Systems
The inflation pressure of tires also impacts the rolling resistance.  Tractor-trailers operating with all tires under-inflated by 10 psi have been shown to increase fuel consumed by up to 1 percent.  Tires can gradually lose pressure from small punctures, leaky valves or simply diffusion through the tire casing.  Changes in ambient temperature can also have an effect on tire pressure.  Trailers that remain unused for long periods of time between hauls may experience any of these conditions.  A 2003 FMCSA report found that nearly 1 in 5 trailers had at least 1 tire under-inflated by 20 psi or more.  If drivers or fleets are not diligent about checking and attending to under-inflated tires, the trailer may have much higher rolling resistance and much higher CO2 emissions and fuel consumption.
 Tire pressure monitoring (TPM) and automatic tire inflation (ATI) systems are designed to address under-inflated tires.  Both systems alert drivers if a tire's pressure drops below its set point.  TPM systems are simpler and merely monitor tire pressure.  Thus, they require user-interaction to re inflate to the appropriate pressure.  Today's ATI systems, on the other hand, typically take advantage of trailers' air brake systems to supply air back into the tires (continuously or on demand) until a selected pressure is achieved.  In the event of a slow leak, ATI systems have the added benefit of maintaining enough pressure to allow the driver to get to a safe stopping area.  The agencies believe TPM systems cannot sufficiently guarantee the proper inflation of tires due to the inherent user-interaction required.  Therefore, ATI systems are the only pressure systems the agencies are proposing to recognize in Phase 2.  
Benefits of ATI systems in individual trailers vary depending on the base level of maintenance already performed by the driver or fleet, as well as the number of miles the trailer travels.  Trailers that are well maintained or that travel fewer miles will experience less benefits from ATI systems compared to trailers that often drive with poorly inflated tires or log many miles.  The agencies believe ATI systems can provide a CO2 and fuel consumption benefit to most trailers.  With ATI use, trailers that have lower annual vehicle miles traveled (VMT) due to long periods between uses would be less susceptible to low tire pressures when they resume activity.  Trailers with high annual VMT would experience the fuel savings associated with consistent tire pressures.  Automatic tire inflation systems could provide a CO2 and fuel consumption savings of 0.5-2.0 percent, depending on the degree of under-inflation in the trailer system. See Section IV.D.3.d below for discussion of our estimates of these factors, as well as estimates of the degree of adoption of ATI systems prior to and at various points in the phase-in of the proposed program.
The use of ATI systems can result in cost savings beyond reducing fuel costs.  For example, drivers and fleets that diligently maintain their tires would spend less time and money to inspect each tire.  A 2011 FMCSA estimated under-inflation accounts for one service call per year and increases tire procurement costs 10 to 13 percent.  The study found that total operating costs can increase by $600 to $800 per year due to under-inflation.   
Weight Reduction
Reduction in trailer tare (i.e., empty) weight can lead to fuel efficiency reductions in two ways.  For applications where payload is not limited by weight restrictions, the overall weight of the tractor and trailer would be reduced and would lead to improved fuel efficiency.  For applications where payload is limited by weight restrictions, the lower trailer weight would allow additional payload to be transported during the truck's trip, so emissions and fuel consumption on a ton-mile basis would decrease.  There are weight reduction opportunities for trailers in both the structural components and in the wheels/tires.  Material substitution (e.g., replacing steel with aluminum or lighter-weight composites) is feasible for components such as roof bows, side and corner posts, cross members, floor joists, floors, and van sidewalls.  Similar material substitution is feasible for wheels (e.g., substituting aluminum for steel).  Weight can also be reduced through the use of single wide-based tires replacing two dual tires.
Lower weight is a desired trailer attribute for many customers, and most trailer manufacturers offer options that reduce weight to some degree.  Some of these manufacturers, especially box van makers, market trailers with lower-weight major components, such as light-weight composite van sidewalls or aluminum floors, especially to customers that expect to frequently reach regulatory weight limits (i.e., "weigh out") and are willing to pay a premium for the ability to increase cargo weight without exceeding overall vehicle weight.  Alternatively, manufacturers that primarily design trailers for customers that do not have weight limit concerns (i.e., their payloads frequently fill the available trailer cargo space before the weight limit is reached, or "cube out"), or for customers that have smaller budgets, may continue to design trailers based on traditional, heavier materials, such as wood and steel.  
There is no clear "baseline" for current trailer weight against which lower-weight designs could be compared for regulatory purposes.  For this reason, the agencies do not believe it would be appropriate or fair across the industry to apply overall weight reductions toward compliance.  However, the agencies do believe it would be appropriate to allow a manufacturer to account for weight reductions that involve substituting very specific, traditionally heavier components with lower-weight options that are not currently widely adopted in the industry.  We discuss how we apply weight reduction in developing the standards in Section IV. D. (2) (d) below. 
Technological Basis of the Standards
The analysis below presents one possible set of technology designs by which trailer manufacturers could reasonably achieve the goals of the program on average.  However, in practice, trailer manufacturers could choose different technologies, versions of technologies, and combinations of technologies that meet the business needs of their customers while complying with this proposed program.  
Much of our analysis is performed for box trailers, which have the most stringent proposed standards.  As mentioned previously, we have separate standards for short and long box vans, and a trailer length of 50 feet is proposed as the cut-point to distinguish the two length categories.  For the purpose of this analysis, long trailers are represented by 53-foot vans and short trailers are represented by single, 28-foot ("pup") vans.  These trailer lengths make up the largest fraction of the vans in the two categories.  The agencies recognize that many 28-foot short vans are operated in tandem.  However, these trailers are sold individually, and require a "dolly", often sold by a separate manufacturer, to connect the trailers for tandem operation.  In addition, the other trailer types considered short vans in this proposal (e.g., 40-foot and 48-foot) operate as single trailers.  We are proposing that 28-foot trailers represent all short refrigerated and dry vans in the vehicle simulations used for compliance and this feasibility analysis.  The agencies believe this approach would provide the most conservative CO2 emissions and fuel consumption reductions for the short box van category.  We request comment on this approach to short box trailers.
Aerodynamic Packages
In order to evaluate performance and cost of the aerodynamic technologies discussed in the previous section, the agencies identified "packages" of individual or combined technologies that are being sold today on box trailers.  The agencies also identified distinct performance levels (i.e., bins) for these technologies based on EPA's aerodynamic testing.  The agencies recognize that there are other technology options that have similar performance.  We chose the technologies presented here based on their current adoption rates and effectiveness in reducing CO2 and fuel consumption.  
Bin I represents a base trailer with no aerodynamic technologies added.  There is no cost associated with this bin.  Bin II achieves small reductions in CO2 and fuel consumption.  This bin includes a gap reducing fairing added to a long dry van or a skirt added to a solo short dry van.  Bin III includes devices that would achieve SmartWay's verification threshold of four percent at cruise speeds.  Some basic skirts and boat tails would achieve these levels of reductions for long box trailers.  A gap reducer and a basic skirt on a short dry van would meet this level of performance.  Bin IV technologies are more effective, single aerodynamic devices for long box trailers, including advanced skirts or boat tails, that achieve larger reductions in drag than the technologies in Bin III.  The combination of an advanced skirt and gap reducer on a short dry van are also expected to achieve this bin.  
Bin V levels of performance were not observed in EPA's aerodynamic testing for short box trailers.  It is possible that a gap reducer, skirt, and boat tail could achieve this performance, but boat tails are not feasible for 28-foot trailers operated in tandem unless the trailer is located in the rear position.  For this analysis, the agencies only evaluated solo pup trailers and, therefore, did not evaluate any technologies for short box trailers beyond Bin IV.  For this proposed rulemaking, we believe a Bin V level of performance can be achieved for long box trailers by either highly effective single devices or by applying a combination of basic boat tails and skirts.  We do not currently have data for a single aerodynamic device that fits this bin and we evaluated it as a combination of a basic tail and skirt.  Bin VI combines advanced skirts and boat tail technologies on long box trailers.  This bin is expected to include many technologies that qualify for SmartWay's "Elite" designation.  
Bin VII represents an optimized system of technologies that work together to synergistically address each of the main areas of drag and achieves aerodynamic improvements greater than SmartWay's "Elite" designation.  We are representing Bin VII with a gap reducer, and advanced tail and skirt.  Bin VIII is designed to represent aerodynamic technologies that may become available in the future, including aerodynamic devices yet to be designed or approaches that would incorporate changes to the construction of trailer bodies.  We have not analyzed this final bin in terms of effectiveness or cost, but are including it to account for future advancements in trailer aerodynamics.  
For this proposal, aerodynamic performance is evaluated using a vehicle's aerodynamic drag area, CDA.  EPA collected aerodynamic test data for several tractor-trailer configurations, including 53-foot dry vans and 28-foot dry van trailers with many of these technology packages.  The agencies developed bins, somewhat similar to the aerodynamic bins in the Phase 1 and proposed Phase 2 tractor programs, based on results from our test program.  However, unlike the tractor program, we grouped the technologies by changes in CDA (or "delta CDA") rather than by absolute values.  In other words, each bin would comprise aerodynamic technologies that provide similar improvements in drag.  This delta CDA classification methodology, which measures improvement in performance relative to a baseline, is similar to the SmartWay technology verification program with which most trailer manufacturers are familiar.  
Table IV-4 illustrates the bin structure that the agencies are proposing as the basis for compliance.  The table shows example technology packages that might be included in each bin based on EPA's testing of 53-foot dry vans and solo 28-foot dry vans.  The agencies believe these bins apply to other box trailers (refrigerated vans and lengths other than 28 and 53 feet), which will be described in more detail in Section IV.D.3.b.  These bins cover a wide enough range of delta CDAs to account for the uncertainty seen in EPA's aerodynamic testing program due to procedure variability, the use of different test methods, or different models of tractors, trailers and devices.  A more detailed description of the development of these bins can be found in the draft RIA, Chapter 2.10. We welcome comments and additional data that may support or suggest changes to these bins.
Table IV-4 Technology Bins used to Evaluate Trailer Benefits and Costs
BIN
DELTA CdA
AVERAGE 
DELTA CDA
                             EXAMPLE TECHNOLOGIES



53-FOOT DRY VAN
28-FOOT DRY VAN
Bin I
< 0.09
0.0
No Aero Devices
No Aero Devices
Bin II
0.10 - 0.19
0.1
Gap Reducer
Skirt
Bin III
0.20 - 0.39
0.3
Basic Skirt or Basic Tail
Skirt + Gap Reducer 
Bin IV
0.40 - 0.59
0.5
Advanced Skirt or Tail
Adv. Skirt + Gap Reducer
Bin V
0.60 - 0.79
0.7
Basic Combinations

Bin VI
0.80 - 1.19
1.0
Advanced Combinations (including SmartWay Elite)

Bin VII
 1.20 - 1.59
1.4
Optimized Combinations

Bin VIII
> 1.6
1.8
Changes to Trailer Construction

Note:  A blank cell indicates a zero or NA value in this table.
The agencies used EPA's Greenhouse gas Emissions Model (GEM) vehicle simulation tool to conduct this analysis.  (See Section F.1 below for more about GEM)  Within GEM, the aerodynamic performance of each trailer subcategory is evaluated by subtracting the delta CDA shown in Table IV-4 from the CDA value representing a specific standard tractor pulling a zero-technology trailer.  The agencies chose to model the zero-technology long box dry van using a CDA value of 6.2 m[2] (the average CDA from EPA's coastdown testing).  For long box refrigerated vans, a two percent reduction in CDA was assumed to account for the aerodynamic benefit of the TRU at the front of the trailer.  Short box dry vans also received a two percent lower CDA value compared to its 53-foot counterpart, consistent with the reduction observed in EPA's wind tunnel testing.  The CDA value assigned to the refrigerated short box vans was an additional two percent lower than the short box dry van.  Non-aero box trailers are modeled as short box dry vans.  The trailer subcategories that have design standards (i.e., non-box and non-aero box trailers) do not have numerical standards to meet, but they were evaluated in this feasibility analysis in order to quantify the benefits of including them in the program.  Non-aero box trailers are modeled as short dry vans.  Non-box trailers, which are modeled as flatbed trailers, were assigned a drag area of 4.9 m[2], as was done in the Phase 1 tractor program for low roof day cabs.  Table IV-5 illustrates the Bin I drag areas (CDA) associated with each trailer subcategory.
Table IV-5 Baseline CDA Values Associated with Aerodynamic Bin I (Zero Trailer Technologies)
TRAILER SUBCATEGORY
                                    DRY VAN
Long Dry Van
                                      6.2
Short Dry Van
                                      6.1
Long Ref. Van
                                      6.1
Short Ref. Van
                                      6.0
Non-Aero Box
                                      6.1
Non-Box 
                                      4.9
Tire Rolling Resistance
Similar to the proposed Phase 2 tractor and vocational vehicle programs, the agencies are proposing a tire program based on adoption of lower rolling resistance tires.  Feedback from several box trailer manufacturers indicates that the standard tires offered on their new trailers are SmartWay-verified tires (i.e., CRR of 5.1 kg/ton or better).  An informal survey of members from the Truck Trailer Manufacturers Association (TTMA) indicates about 35 percent of box trailers sold today have SmartWay tires.  While some trailers continue to be sold with tires of higher rolling resistances, the agencies believe most box trailer tires currently achieve the Phase 1 trailer tire CRR of 6.0 kg/ton or better.
The agencies evaluated two levels of tire performance for this proposal beyond the baseline trailer tire rolling resistance level (TRRL) of 6.0 kg/ton.  The first performance level was set at the criteria for SmartWay-verification for trailer tires, 5.1 kg/ton, which is a 15 percent reduction in CRR from the baseline.  As mentioned previously, several tire models available today achieve rolling resistance values well below the present SmartWay threshold.  Given the multiple year phase-in of the standards, the agencies expect that tire manufacturers will continue to respond to demand for more efficient tires and will offer increasing numbers of tire models with rolling resistance values significantly better than today's typical LRR tires.  In this context, we believe it is reasonable to expect a large fraction of the trailer industry could adopt tires with rolling resistances at a second performance level that would achieve an additional eight percent reduction in rolling resistance (a 22 percent reduction from the baseline tire), especially in the later stages of the program.  The agencies project the CRR for this second level of performance to be a value of 4.7 kg/ton.  
The agencies evaluated these three tire rolling resistance levels, summarized in Table IV-6, in the feasibility analysis of the following sections.  GEM simulations that apply Level 1 and 2 tires result in CO2 and fuel consumption reductions of two and three percent from the baseline tire, respectively.  It should be noted that these levels are for the feasibility analysis only.  For compliance, manufacturers would have the option to use tires with any rolling resistance and would not be limited to these TRRLs.  
Table IV-6  Summary of Trailer Tire Rolling Resistance Levels Evaluated
                         Tire Rolling Resistance Level
                                 CRR (kg/ton)
Baseline 
                                     6.0 
Level 1 
                                     5.1 
Level 2 
                                     4.7 
Automatic Tire Inflation Systems
NHTSA and EPA recognize the role of proper tire inflation in maintaining optimum tire rolling resistance during normal trailer operation.  For this proposal, rather than require performance testing of ATI systems, the agencies are proposing to recognize the benefits of ATI systems with a single default reduction for manufacturers that incorporate ATI systems into their trailer designs.  Based on information available today, we believe that there is a narrow range of performance among technologies available and among systems in typical use.  We propose to assign a 1.5 percent reduction in CO2 and fuel consumption for all trailers that implement ATI systems, based on information available today.  We believe the use of these systems can consistently ensure that tire pressure and tire rolling resistance are maintained.  We selected the levels of the proposed trailer standards with the expectation that a high rate of adoption of ATI systems would occur across all on-highway trailers and during all years of the phase-in of the program.  See Section IV.D.3.d below for discussion of our estimates of these factors, as well as estimates of the degree of adoption of ATI systems prior to and at various points in the phase-in of the proposed program.  The informal survey of members from the Truck Trailer Manufacturers Association (TTMA) indicates about 40 percent of box trailers sold today have ATI systems.
Weight Reduction
The agencies are proposing compliance provisions that would limit the weight-reduction options to the substitution of specified components that can be clearly isolated from the trailer as a whole.  For this proposal, the agencies have identified several conventional components with available lighter-weight substitutes (e.g., substituting conventional dual tires mounted on steel wheels with wide-based single tires mounted on aluminum wheels).  We are proposing values for the associated weight-related savings that would be applied with these substitutions for compliance.  The proposed component substitutions and their associated weight savings are presented in the draft RIA, Chapter 2.10.2.4 and in proposed 40 CFR 1037.520.  We believe that the initial cost of these component substitutions is currently substantial enough that only a relatively small segment of the industry has adopted these technologies today.  
The agencies recognize that when weight reduction is applied to a trailer, some operators will replace that saved weight with additional payload.  To account for this in EPA's GEM vehicle simulation tool, it is assumed that one-third of the weight reduction will be applied to the payload.  For tractor-trailers simulated in GEM, it takes a weight reduction of nearly 1,000 pounds before a one percent fuel savings is achieved.  The component substitutions identified by the agencies result in weight reductions of less than 500 pounds, yet can cost over $1,000.  The agencies believe that few trailer manufacturers would apply weight reduction solely as a means of achieving reduced fuel consumption and CO2 emissions.  Therefore, we are proposing standards that could be met without reducing weight  -  that is, the compliance path set out by the agencies for the proposed standards does not include weight reduction. However, we are proposing to offer weight reduction as an option for box trailer manufacturers who wish to apply it to some of their trailers as part of their compliance strategy.  
The agencies have identified 11 common trailer components that have lighter weight options available (see 40 CFR 1037.520).[,][,][,]  Manufacturers that adopt these technologies would sum the associated weight reductions and apply those values in GEM.  As mentioned previously, we are restricting the weight reduction options to those listed in 40 CFR 1037.520.  We are requesting comment on the appropriateness of the specified weight reductions from component substitution.  In addition, we seek weight and cost data regarding additional components that could be offered as specific weight reduction options.  The agencies request that any such components be applicable to most box trailers, and that the reduced weight option not currently be in common use. 
Effectiveness, Adoption Rates, and Costs of Technologies for the Proposed Standards
The agencies evaluated the technologies above as they apply to each of the trailer subcategories.  The next sections describe the effectiveness, adoption rates and costs associated with these technologies.  The effectiveness and adoption rates are then used to derive the proposed standards.  
Zero-Technology Baseline Tractor-Trailer Vehicles
The regulatory purpose of EPA's heavy-duty vehicle compliance tool, GEM, is to combine the effects of trailer technologies through simulation so that they can be expressed as kg/ton-mile and gal/100 ton-mile and thus avoid the need for direct testing of each trailer model being certified.  The proposed trailer program has separate standards for each trailer subcategory, and a unique tractor-trailer vehicle was chosen to represent each subcategory for compliance.  In the Phase 2 update to GEM, each trailer subcategory is modeled as a particular trailer being pulled by a standard tractor depending on the physical characteristics and use pattern of the trailer.  Table IV-7 highlights the relevant vehicle characteristics for the zero-technology baseline of each subcategory.  Baseline trailer tires are used, and the drag area, which is a function of the aerodynamic characteristics of both the tractor and trailer, is set to the Bin I values shown previously in Table IV-5.  Weight reduction and ATI systems are not applied in these baselines.  Chapter 2.10 of the draft RIA provides a detailed description of the development of these baseline tractor-trailers.  
The agencies chose to consistently model a Class 8 tractor across all trailer subcategories.  We recognize that Class 7 tractors are sometimes used in certain applications.  However, we believe Class 8 tractors are more widely available, which will make it easier for trailer manufacturers to obtain a qualified tractor if they choose to perform trailer testing.  We request comment on the use of Class 8 tractors as part of the tractor-trailer vehicles used in the compliance simulation as well as performance testing.  We ask that commenters include data, where available, related to the current use and availability of Class 7 and 8 tractors with respect to the trailer types in each trailer subcategory.
Table IV-7  Characteristics of the Zero-Technology Baseline Tractor-Trailer Vehicles
DRY VAN
                               REFRIGERATED VAN
                                 NON-AERO BOX
                                    NON-BOX
                                TRAILER LENGTH
                                     Long
                                     Short
                                     Long
                                     Short
                                  All Lengths
                                  All Lengths
Tractor Class
                                    Class 8
                                    Class 8
                                    Class 8
                                    Class 8
                                    Class 8
                                    Class 8
Tractor Cab Type
                                    Sleeper
                                      Day
                                    Sleeper
                                      Day
                                      Day
                                      Day
Tractor Roof Height
                                     High
                                     High
                                     High
                                     High
                                     High
                                      Low
Engine
                                 2018 MY 15L, 
                                    455 HP
                                 2018 MY 15L, 
                                    455 HP
                                 2018 MY 15L, 
                                    455 HP
                                 2018 MY 15L, 
                                    455 HP
                                 2018 MY 15L, 
                                    455 HP
                                 2018 MY 15L, 
                                    455 HP
Frontal Area (m[2])
                                     10.4
                                     10.4
                                     10.4
                                     10.4
                                     10.4
                                      6.9
Drag Area, CDA (m[2])
                                      6.2
                                      6.1
                                      6.1
                                      6.0
                                      6.1
                                      4.9
Steer Tire RR (kg/ton)
                                     6.54
                                     6.54
                                     6.54
                                     6.54
                                     6.54
                                     6.54
Drive Tire RR (kg/ton)
                                     6.92
                                     6.92
                                     6.92
                                     6.92
                                     6.92
                                     6.92
Trailer Tire RR (kg/ton)
                                     6.00
                                     6.00
                                     6.00
                                     6.00
                                     6.00
                                     6.00
Total Weight (kg)
                                     31978
                                     21028
                                     33778
                                     22828
                                     21028
                                     29710
Payload (tons)
                                      19
                                      10
                                      19
                                      10
                                      10
                                      19
ATI System Use 
                                       0
                                       0
                                       0
                                       0
                                       0
                                       0
Weight Reduction (lb)
                                       0
                                       0
                                       0
                                       0
                                       0
                                       0
Drive Cycle Weightings
                                       
                                       
                                       
                                       
                                       
                                       
65-MPH Cruise
                                      86%
                                      64%
                                      86%
                                      64%
                                      64%
                                      64%
55-MPH Cruise
                                      9%
                                      17%
                                      9%
                                      17%
                                      17%
                                      17%
Transient Driving
                                      5%
                                      19%
                                      5%
                                      19%
                                      19%
                                      19%

Effectiveness of Technologies
The agencies are proposing to recognize trailer improvements via four performance parameters:  aerodynamic drag reduction, tire rolling resistance reduction, the adoption of ATI systems, and by substituting specific weight-reducing components.  Table IV-8 summarizes the performance levels for each of these parameters based on the technology characteristics outlined in Section IV. D. (2) .  
Table IV-8 Performance Parameters for the Proposed Trailer Program 
Aerodynamics (Delta CDA, m[2])
Bin I
0.0
Bin II
0.1
Bin III
0.3
Bin IV
0.5
Bin V
0.7
Bin VI
1.0
Bin VII
1.4
Bin VIII
1.8
Tire Rolling Resistance (CRR, kg/ton)
Tire Baseline
6.0
Tire Level 1
5.1
Tire Level 2
4.7
Tire Inflation System (% reduction)
ATI System
1.5
Weight Reduction (pounds)
Weight
1/3 added to payload, remaining reduces overall vehicle weight
These performance parameters have different effects on each trailer subcategory due to differences in the simulated trailer characteristics.  Table IV-9 shows the agencies' estimates of the effectiveness of each parameter for the four box trailer subcategories.  Each technology was evaluated using the baseline parameter values for the other technology categories.  For example, each aerodynamic bin was evaluated using the baseline tire (6.0 kg/ton) and the baseline weight reduction option (zero pounds).  The table shows that aerodynamic improvements offer the largest potential for CO2 emissions and fuel consumption reductions, making them relatively effective technologies.  
Table IV-9:  Effectiveness (Percent CO2 and Fuel Savings from Baseline) of Technologies for the Proposed Trailer Program
Aerodynamics
                               Delta CDA (m[2])
                                    Dry Van
                               Refrigerated Van

                                       
                                     Long
                                     Short
                                     Long
                                     Short
Bin I 
                                      0.0
                                      0%
                                      0%
                                      0%
                                      0%
Bin II 
                                      0.1
                                      -1%
                                      -1%
                                      -1%
                                      -1%
Bin III 
                                      0.3
                                      -2%
                                      -2%
                                      -2%
                                      -2%
Bin IV
                                      0.5
                                      -3%
                                      -4%
                                      -3%
                                      -3%
Bin V
                                      0.7
                                      -5%
                                      -5%
                                      -5%
                                      -5%
Bin VI
                                      1.0
                                      -7%
                                      -7%
                                      -7%
                                      -7%
Bin VII
                                      1.4
                                     -10%
                                     -10%
                                      -9%
                                     -10%
Bin VIII
                                      1.8
                                     -13%
                                     -13%
                                     -12%
                                     -12%
Tire Rolling Resistance
                                 CRR (kg/ton)
                                    Dry Van
                               Refrigerated Van

                                       
                                     Long
                                     Short
                                     Long
                                     Short
Baseline
                                      6.0
                                      0%
                                      0%
                                      0%
                                      0%
Level 1
                                      5.1
                                      -2%
                                      -1%
                                      -2%
                                      -1%
Level 2
                                      4.7
                                      -3%
                                      -2%
                                      -3%
                                      -2%
Weight Reduction
                                  Weight (lb)
                                    Dry Van
                               Refrigerated Van

                                       
                                     Long
                                     Short
                                     Long
                                     Short
Baseline
                                      0.0
                                     0.0%
                                     0.0%
                                     0.0%
                                     0.0%
Al. Dual Wheels
                                      168
                                     -0.2%
                                     -0.3%
                                     -0.2%
                                     -0.3%
Upper Coupler
                                      280
                                     -0.3%
                                      -1%
                                     -0.3%
                                      -1%
Suspension
                                      430
                                     -0.5%
                                      -1%
                                     -0.5%
                                      -1%
Al. Single Wide
                                      556
                                      -1%
                                      -1%
                                      -1%
                                      -1%

Reference Tractor-Trailer to Evaluate Benefits and Costs
In order to evaluate the benefits and costs of the proposed standards, it is necessary to establish a reference point for comparison.  As mentioned previously, the technologies described in Section IV. D. (2) exist in the market today, and their adoption is driven by available fuel savings as well as by the voluntary SmartWay Partnership and California's tractor-trailer requirements.  For this proposal, the agencies identified reference case tractor-trailers for each trailer subcategory based on the technology adoption rates we project would exist if this proposed trailer program was not implemented.  
We project that by 2018, absent further California regulation, EPA's SmartWay program and these research programs will result in about 20 percent of 53-foot dry and refrigerated vans adopting basic SmartWay-level aerodynamic technologies (meeting SmartWay's four percent verification level and Bin III from Table IV-5), 30 percent adopting more advanced aerodynamic technologies at the five percent SmartWay-verification level (Bin IV from Table IV-5) and five percent adding combinations of technologies (Bin V).[,][,]  In addition, we project half of these 53' box trailers will be equipped with SmartWay-verified tires (i.e., 5.1 kg/ton or better) and ATI systems as well.  The agencies project that market forces will drive an additional one percent increase in adoption of the advanced SmartWay and tire technologies each year through 2027.  For analytical purposes, the agencies assumed manufacturers of the shorter box trailers and other trailer subcategories would not adopt these technologies in the timeframe considered and a zero-technology baseline is assumed.  We are not assuming weight reduction for any of the trailer subcategories in the reference cases.  Table IV-10 summarizes the reference case trailers for each trailer subcategory.  
Table IV-10:  Projected Adoption Rates and Average Performance Parameters for the Less Dynamic Reference Case Trailers
TECHNOLOGY
                                   LONG BOX
                          DRY & REFRIGERATED VANS
                                  SHORT BOX, 
                                NON-AERO BOX, 
                            & NON-BOX TRAILERS
Model Year
                                     2018
                                     2021
                                     2024
                                     2027
                                  2018 - 2027
Aerodynamics
Bin I
                                                                            45%
                                                                            41%
                                                                            38%
                                                                            35%
                                     100%
Bin II
                                                                               
                                                                               
                                                                               
                                                                               
                                       
Bin III
                                                                            20%
                                                                            20%
                                                                            20%
                                                                            20%
                                       
Bin IV
                                                                            30%
                                                                            34%
                                                                            37%
                                                                            40%
                                       
Bin V
                                                                             5%
                                                                             5%
                                                                             5%
                                                                             5%
                                       
Bin VI
                                                                               
                                                                               
                                                                               
                                                                               
                                       
Bin VII
                                                                               
                                                                               
                                                                               
                                                                               
                                       
Bin VIII
                                                                               
                                                                               
                                                                               
                                                                               
                                       
Average Delta CDA (m[2]) [a]
                                                                            0.2
                                                                            0.3
                                                                            0.3
                                                                            0.3
                                      0.0
Tire Rolling Resistance
Baseline tires
                                                                            50%
                                                                            47%
                                                                            43%
                                                                            40%
                                     100%
Level 1 tires
                                                                            50%
                                                                            53%
                                                                            57%
                                                                            60%
                                       
Level 2 tires
                                                       AVERAGE CRR (KG/TON) [a]
                                                                           5.55
                                                                           5.52
                                                                           5.49
                                                                           5.46
                                      6.0
Tire Inflation
ATI
                                                                            50%
                                                                            53%
                                                                            57%
                                                                            60%
                                      0%
Average % Reduction [a]
                                                                           0.8%
                                                                           0.8%
                                                                           0.9%
                                                                           0.9%
                                     0.0%
Weight Reduction (pounds)
Weight [b]
                                                                               
                                                                               
                                                                               
                                                                               
                                       
       Notes: 
       A blank cell indicates a zero value
       [a]:  Combines adoption rates with performance levels shown in Table IV-8
       [b]:  Weight reduction was not projected for the reference case trailers

Also shown in Table IV-10 are average aerodynamic performance (delta CDA), average tire rolling resistance (CRR), and average reductions due to use of ATI and weight reduction for each stage of the proposed program.  These values indicate the performance of theoretical average tractor-trailers that the agencies project will be in use if no federal regulations were in place for trailer CO2 and fuel consumption.  The average tractor-trailer vehicles serve as reference cases for each trailer subcategory.  The agencies provide a detailed description of the development of these reference case vehicles in Chapter 2.10 in the draft RIA.
Because the agencies cannot be certain about future trends, we also considered a second reference case.  This more dynamic reference case reflects the possibility that absent a Phase 2 regulation, there will be continuing adoption of technologies in the trailer market after 2027 that reduce fuel consumption and CO2 emissions.  This case assumes the research funded and conducted by the federal government, industry, academia and other organizations will, after 2027, result the adoption of some technologies beyond the levels required to comply with existing regulatory and voluntary programs.  One example of such research is the Department of Energy Super Truck program which has a goal of demonstrating cost-effective measures to improve the efficiency of Class 8 long-haul freight trucks by 50 percent by 2015.  This reference case assumes that by 2040, 75 percent of new trailers will be equipped with SmartWay-verified aerodynamic devices, low rolling resistance tires, and ATI systems.  Table IV-11 shows the agencies' projected adoption rates of technologies in the more dynamic reference case.
Table IV-11: Projected Adoption Rates and Average Performance Parameters for the More Dynamic Reference Case 
TECHNOLOGY
                                   LONG BOX
                          DRY & REFRIGERATED VANS
                                  SHORT BOX, 
                                NON-AERO BOX, 
                            & NON-BOX TRAILERS
Model Year
                                     2018
                                     2021
                                     2024
                                     2027
                                     2040
                                  2018 - 2027
Aerodynamics
Bin I
                                                                            45%
                                                                            41%
                                                                            38%
                                                                            35%
                                      20%
                                     100%
Bin II
                                                                               
                                                                               
                                                                               
                                                                               
                                       
                                       
Bin III
                                                                            20%
                                                                            20%
                                                                            20%
                                                                            20%
                                      20%
                                       
Bin IV
                                                                            30%
                                                                            34%
                                                                            37%
                                                                            40%
                                      55%
                                       
Bin V
                                                                             5%
                                                                             5%
                                                                             5%
                                                                             5%
                                      5%
                                       
Bin VI
                                                                               
                                                                               
                                                                               
                                                                               
                                       
                                       
Bin VII
                                                                               
                                                                               
                                                                               
                                                                               
                                       
                                       
Bin VIII
                                                                               
                                                                               
                                                                               
                                                                               
                                       
                                       
Average Delta CDA (m[2]) [a]
                                                                            0.2
                                                                            0.3
                                                                            0.3
                                                                            0.3
                                      0.4
                                      0.0
Tire Rolling Resistance
Baseline tires
                                                                            50%
                                                                            47%
                                                                            43%
                                                                            40%
                                      25%
                                     100%
Level 1 tires
                                                                            50%
                                                                            53%
                                                                            57%
                                                                            60%
                                      75%
                                       
Level 2 tires
                                                       AVERAGE CRR (KG/TON) [a]
                                                                            5.6
                                                                            5.5
                                                                            5.5
                                                                            5.5
                                      5.3
                                      6.0
Tire Inflation
ATI
                                                                            50%
                                                                            53%
                                                                            57%
                                                                            60%
                                      75%
                                      0%
Average % Reduction [a]
                                                                           0.8%
                                                                           0.8%
                                                                           0.9%
                                                                           0.9%
                                     1.1%
                                     0.0%
Weight Reduction (pounds)
Weight [b]
                                                                               
                                                                               
                                                                               
                                                                               
                                       
                                       
    Note:  A blank cell indicates a zero value

The agencies applied the vehicle attributes from Table IV-7 and the average performance values from Table IV-10 in the proposed Phase 2 GEM vehicle simulation to calculate the CO2 emissions and fuel consumption performance of the reference tractor-trailers.  The results of these simulations are shown in Table IV-12.  We used these CO2 and fuel consumption values to calculate the relative benefits of the proposed standards.  Note that the large difference between the per ton-mile values for long and short trailers is due primarily to the large difference in assumed payload (19 tons compared to 10 tons) as seen in Table IV-7 and discussed further in the Chapter 2.10.3.  The alternative reference case shown in Table IV-11 impacts the long-term projections of benefits beyond 2027, which are analyzed in Chapters 5-7 of the draft RIA.  
Table IV-12:  CO2 Emissions and Fuel Consumption Results for the Reference Tractor-Trailers

                                    Dry Van
                               Refrigerated Van
Length
                                     Long
                                     Short
                                     Long
                                     Short
CO2 Emissions 
(kg/ton-mile)
                                      85
                                      147
                                      87
                                      151
Fuel Consumption 
(gal/100 ton-miles)
                                    8.3497
                                   144.4008
                                    8.5462
                                    14.8330

Projected Technology Adoption Rates for the Proposed Standards
As described in Section IV. E. , the agencies evaluated several alternatives for the proposed trailer program.  Based on our analysis, and current information, the agencies are proposing the alternative we believe reflects the agencies' respective statutory authorities.  The agencies are also considering an accelerated alternative with less lead time, requiring the same incremental stringencies for the proposed program, but becoming effective three years earlier.  The agencies believe this alternative has the potential to be the maximum feasible alternative.  However, based on the evidence currently before us, EPA and NHTSA have outstanding questions regarding relative risks and benefits of Alternative 4 due to the timeframe envisioned by that alternative.  EPA and NHTSA are seriously considering this accelerated alternative in whole or in part for the trailer segment.  In other words, the agencies could determine that less lead-time is maximum feasible in the final rule.  We request comment on these two alternatives, including the proposed lead-times.  
Table IV-13 and Table IV-14 present a set of assumed adoption rates for aerodynamic, tire, and ATI technologies that a manufacturer could apply to meet the proposed standards.  These adoption rates begin with 60 percent of long box trailers achieving current SmartWay level aerodynamics (Bin IV) and progress to 90 percent achieving SmartWay Elite (Bin VI) or better over the following nine years.  The adoption rates for short box trailers assume adoption of single aero devices in MY 2021 and combinations of devices by MY 2027.  Although the shorter lengths of these trailers can restrict the design of aerodynamic technologies that fully match the SmartWay-like performance levels of long boxes, we nevertheless expect that trailer and device manufacturers would continue to innovate skirt, under-body, rear, and gap-reducing devices and combinations to achieve improved aerodynamic performance on these shorter trailers.  The assumed adoption rates for aerodynamic technologies for both long and short refrigerated vans are slightly less than for dry vans, reflecting the more limited number of aerodynamic options due to the presence of their TRUs.  
The gradual increase in assumed adoption of aerodynamic technologies throughout the phase-in to the MY 2027 standards recognizes that even though many of the technologies are available today and technologically feasible throughout the phase-period, their adoption on the scale of the proposed program would likely take time.  The adoption rates we are assuming in the interim years  -  and the standards that we developed from these rates -- represent steady and yet reasonable improvement in average aerodynamic performance.  
The agencies project that nearly all box trailers will adopt tire technologies to comply with the standards and the agencies projected consistent adoption rates across all lengths of dry and refrigerated vans, with more advanced (Level 2) low-rolling resistance tires assumed to replace Level 1 tire models in the 2024 time frame, as Level 2-type tires become more available and fleet experience with these tires develops.  As mentioned previously, the agencies did not include weight reduction in their technology adoption projections, but certain types of weight reduction could be used as a compliance pathway, as discussed in Section IV.D.1.d above.  
The adoption rates shown in these tables are one set of many possible combinations that box trailer manufacturers could apply to achieve the same average stringency.  If a manufacturer chose these adoption rates, a variety of technology options exist within the aerodynamic bins, and several models of LRR tires exist for the levels shown.  Alternatively, technologies from other aero bins and tire levels could be used to comply.  It should be noted that manufacturers are not limited to aerodynamic and tire technologies, since these are performance-based standards, and manufacturers would not be constrained to adopt any particular way to demonstrate compliance.  Certain types of weight reduction, for example, may be used as a compliance pathway, as discussed in Section IV.D.1.d above.  
Similar to our analyses of the reference cases, the agencies derived a single set of performance parameters for each subcategory by weighting the performance levels included in Table IV-8 by the corresponding adoption rates.  These performance parameters represent an average compliant vehicle for each trailer subcategory and we present these values in the tables.  The 2024 MY adoption rates would continue to apply for the partial-aero box trailers in 2027 and later model years.  

Table IV-13:  Projected Adoption Rates and Average Performance Parameters for Long Box Trailers
TECHNOLOGY
                                   LONG BOX
                                   DRY VANS
                                   LONG BOX
                               REFRIGERATED VANS
Model Year
                                     2018
                                     2021
                                     2024
                                     2027
                                     2018
                                     2021
                                     2024
                                     2027
Aerodynamic Technologies
Bin I
                                                                             5%
                                                                               
                                                                               
                                                                               
                                                                             5%
                                                                               
                                                                               
                                                                               
Bin II
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Bin III
                                                                            30%
                                                                             5%
                                                                               
                                                                               
                                                                            30%
                                                                             5%
                                                                               
                                                                               
Bin IV
                                                                            60%
                                                                            55%
                                                                            25%
                                                                               
                                                                            60%
                                                                            55%
                                                                            25%
                                                                               
Bin V
                                                                             5%
                                                                            10%
                                                                            10%
                                                                            10%
                                                                             5%
                                                                            10%
                                                                            10%
                                                                            20%
Bin VI
                                                                               
                                                                            30%
                                                                            65%
                                                                            50%
                                                                               
                                                                            30%
                                                                            65%
                                                                            60%
Bin VII
                                                                               
                                                                               
                                                                               
                                                                            40%
                                                                               
                                                                               
                                                                               
                                                                            20%
Bin VIII
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Average Delta CDA (m[2]) [a]
                                                                            0.4
                                                                            0.7
                                                                            0.8
                                                                            1.1
                                                                            0.4
                                                                            0.7
                                                                            0.8
                                                                            1.0
Trailer Tire Rolling Resistance
Baseline tires
                                                                            15%
                                                                             5%
                                                                             5%
                                                                             5%
                                                                            15%
                                                                             5%
                                                                             5%
                                                                             5%
Level 1 tires
                                                                            85%
                                                                            95%
                                                                              -
                                                                              -
                                                                            85%
                                                                            95%
                                                                               
                                                                               
Level 2 tires
                                                                            95%
                                                                            95%
                                                                            95%
                                                                            95%
Average CRR (kg/ton) [a]
                                                                            5.2
                                                                            5.1
                                                                            4.8
                                                                            4.8
                                                                            5.2
                                                                            5.1
                                                                            4.8
                                                                            4.8
Tire Inflation System
ATI
                                                                            85%
                                                                            95%
                                                                            95%
                                                                            95%
                                                                            85%
                                                                            95%
                                                                            95%
                                                                            95%
Average ATI Reduction (%) [a]
                                                                           1.3%
                                                                           1.4%
                                                                           1.4%
                                                                           1.4%
                                                                           1.3%
                                                                           1.4%
                                                                           1.4%
                                                                           1.4%
Weight Reduction (pounds)
Weight  b
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Notes: 
 A blank cell indicates a zero value
[a]: Combines projected adoption rates with performance levels shown in Table IV-8
[b]: This set of proposed adoption rates did not apply any assumed weight reduction to meet the proposed standards for these trailers

Table IV-14: Projected Adoption Rates and Average Performance Parameters for Short Box Trailers
TECHNOLOGY
                                   SHORT BOX
                                   DRY VANS
                                   SHORT BOX
                               REFRIGERATED VANS
Model Year
                                     2018
                                     2021
                                     2024
                                     2027
                                     2018
                                     2021
                                     2024
                                     2027
Aerodynamic Technologies [a]
Bin I
                                                                           100%
                                                                             5%
                                                                               
                                                                               
                                                                           100%
                                                                             5%
                                                                               
                                                                               
Bin II
                                                                               
                                                                            95%
                                                                            70%
                                                                            30%
                                                                               
                                                                            95%
                                                                            70%
                                                                            55%
Bin III
                                                                               
                                                                               
                                                                            30%
                                                                            60%
                                                                               
                                                                               
                                                                            30%
                                                                            40%
Bin IV
                                                                               
                                                                               
                                                                               
                                                                            10%
                                                                               
                                                                               
                                                                               
                                                                             5%
Bin V
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Bin VI
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Bin VII
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Bin VIII
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Average Delta CDA (m[2]) [b]
                                                                            0.4
                                                                            0.7
                                                                            0.8
                                                                            1.1
                                                                            0.4
                                                                            0.7
                                                                            0.8
                                                                            1.0
Trailer Tire Rolling Resistance
Baseline tires
                                                                            15%
                                                                             5%
                                                                             5%
                                                                             5%
                                                                            15%
                                                                             5%
                                                                             5%
                                                                             5%
Level 1 tires
                                                                            85%
                                                                            95%
                                                                               
                                                                               
                                                                            85%
                                                                            95%
                                                                               
                                                                               
Level 2 tires
                                                                            95%
                                                                            95%
                                                                            95%
                                                                            95%
Average CRR (kg/ton) [b]
                                                                            5.2
                                                                            5.1
                                                                            4.8
                                                                            4.8
                                                                            5.2
                                                                            5.1
                                                                            4.8
                                                                            4.8
Tire Inflation System
ATI
                                                                            85%
                                                                            95%
                                                                            95%
                                                                            95%
                                                                            85%
                                                                            95%
                                                                            95%
                                                                            95%
Average ATI Reduction (%) [c]
                                                                           1.3%
                                                                           1.4%
                                                                           1.4%
                                                                           1.4%
                                                                           1.3%
                                                                           1.4%
                                                                           1.4%
                                                                           1.4%
Weight Reduction (pounds)
Weight [b]
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Notes: 
A blank cell indicates a zero value
[a]:  The majority of short box trailers are 28 feet in length.  We recognize that they are often operated in tandem, which limits the technologies that can be applied (for example, boat tails). We propose standards assuming these shorter trailers were run solo, but projected smaller aerodynamic improvements compared to improvements to long box trailers with similar technologies to reflect their frequent tandem operation.
[b]: Combines projected adoption rates with performance levels shown in Table IV-8
[c]: This set of proposed adoption rates did not apply any assumed weight reduction to meet the proposed standards for these trailers
Non-aero box trailers, with two or more work-related special components, and non-box trailers are not shown in the tables above.  We are proposing that manufacturers of these trailers meet design-based (i.e., technology-based) standards, instead of performance-based standards that would apply to other trailers.  That is, manufacturers of these trailers would not need to use aerodynamic technologies, but they would need to use appropriate lower rolling resistance tires and ATI systems, based on our assessments of the typical CO2 and fuel consumptions performance of this equipment (See Section IV.2.c).  Thus, we are projecting 100 percent adoption rates of these technologies at each stage of the program.  Compared to manufacturers that needed aerodynamic technologies to comply, the approach for non-aero box trailers and non-box trailers would result in a significantly lower compliance burden for manufacturers by reducing the amount of tracking and eliminating the need to run GEM (see Section  IV. F. ) The agencies are proposing these design standards in two stages.  In 2018, the proposed standards would require manufacturers to use tires meeting a rolling resistance of Level 1 or better and to install ATI systems on all non-box and non-aero box trailers.  In 2024, the proposed standards would require manufacturers to use LRR tires at a Level 2 or better, and to still install ATI systems.  We seek comment on all aspects of this design-based standards concept.   We also seek comment on providing manufacturers with the option of adopting Level 2 tires in the early years of the program (MY 2018-2023) and avoiding the use of ATI systems if they chose.  
Table IV-15:  Projected Adoption Rates and Average Performance Parameters for Non-Aero Box and Non-Box Trailers
TECHNOLOGY
                                 NON-AERO BOX
                            & NON-BOX TRAILERS
Model Year
                                     2018
                                     2021
                                     2024
                                     2027
Aerodynamic Technologies
Bin I
                                                                           100%
                                                                           100%
                                                                           100%
                                                                           100%
Bin II
                                                                               
                                                                               
                                                                               
                                                                               
Bin III
                                                                               
                                                                               
                                                                               
                                                                               
Bin IV
                                                                               
                                                                               
                                                                               
                                                                               
Bin V
                                                                               
                                                                               
                                                                               
                                                                               
Bin VI
                                                                               
                                                                               
                                                                               
                                                                               
Bin VII
                                                                               
                                                                               
                                                                               
                                                                               
Bin VIII
                                                                               
                                                                               
                                                                               
                                                                               
Average Delta CDA (m[2]) [a]
                                                                            0.0
                                                                            0.0
                                                                            0.0
                                                                            0.0
Trailer Tire Rolling Resistance
Baseline tires
                                                                               
                                                                               
                                                                               
                                                                               
Level 1 tires
                                                                           100%
                                                                           100%
                                                                               
                                                                               
Level 2 tires
                                                                           100%
                                                                           100%
Average CRR (kg/ton) [a]
                                                                            5.1
                                                                            5.1
                                                                            4.7
                                                                            4.7
Tire Inflation System
ATI
                                                                           100%
                                                                           100%
                                                                           100%
                                                                           100%
Average ATI Reduction (%) [a]
                                                                           1.5%
                                                                           1.5%
                                                                           1.5%
                                                                           1.5%
Weight Reduction (pounds)
Weight [b]
                                                                               
                                                                               
                                                                               
                                                                               
             Notes: 
             A blank cell indicates a zero value
             [a]: Combines projected adoption rates with performance levels shown in Table IV-8
             [b]: This set of adoption rates did not apply weight reduction to meet the proposed standards for these trailers

We request comment and any data related to our projections of technology adoption rates. The following section (d) explains how the agencies combined these adoption rates with the performance values shown previously to calculate the proposed standards.  
Derivation of the Proposed Standards
  The average performance parameters from Table IV-14, and Table IV-15 were applied as input values to the GEM vehicle simulation to derive the proposed HD Phase 2 fuel consumption and CO2 emissions standards for each subcategory of trailers. The proposed standards are shown in Table IV-16.   The proposed standards for partial-aero trailers, which are not explicitly shown in Table IV-16, would be the same as their full-aero counterparts through MY 2026.  In MY 2027 and later, partial aero trailers would continue to meet the MY 2024 standards.
Over the four stages of the proposed rule, box trailers longer than 50 feet would, on average, reduce their CO2 emissions and fuel consumption by two percent, four percent, seven percent and eight percent compared to their reference cases.  Box trailers 50-foot and shorter would achieve reductions of two percent, three percent and four percent compared to their reference cases.  The tire technologies used on non-box and non-aero box trailers would provide reductions of two percent in the first two stages and achieve three percent by 2027.
Table IV-16:  Proposed Standards for Box Trailers
MODEL 
YEAR
SUBCATEGORY
                                    DRY VAN
                               REFRIGERATED VAN
LENGTH
                                     LONG
                                     SHORT
                                     LONG
                                     SHORT
2018 - 2020
EPA Standard 
                                      83
                                      144
                                      84
                                      147

(CO2 Grams per Ton-Mile)





Voluntary NHTSA Standard
                                    8.1532
                                    14.1454
                                    8.2515
                                    14.4401

(Gallons per 1,000 Ton-Mile)




2021 - 2023
EPA Standard
                                      81
                                      143
                                      82
                                      146

(CO2 Grams per Ton-Mile)





NHTSA Standard
                                    7.9568
                                    14.0472
                                    8.0550
                                    14.3418

(Gallons per 1,000 Ton-Mile)




2024 - 2026
EPA Standard
                                      79
                                      141
                                      81
                                      144

(CO2 Grams per Ton-Mile)





NHTSA Standard
                                    7.7603
                                    13.8507
                                    7.9568
                                    14.1454

(Gallons per 1,000 Ton-Mile)




2027 +
EPA Standard
                                      77
                                      140
                                      80
                                      144

(CO2 Grams per Ton-Mile)





NHTSA Standard
                                    7.5639
                                    13.7535
                                    7.8585
                                    14.1454

(Gallons per 1,000 Ton-Mile)





It should be noted that the proposed standards are based on highway cruise cycles that include road grade to better reflect real world driving and to help recognize engine and driveline technologies.  See Section III.E.  The agencies have evaluated some alternate road grade profiles recommended by the National Renewable Energy Laboratory (NREL) and have prepared possible alternative trailer vehicle standards based on these profiles.  The agencies request comment on this analysis, which is available in a memorandum to the docket.
Technology Costs for the Proposed Standards
The agencies evaluated the technology costs for 53-foot dry and refrigerated vans and 28-foot dry vans, which we believe are representative of the majority of trailers in the 50-foot and longer and shorter than 50-foot categories, respectively.  We identified costs for each technology package evaluated and projected the costs for each year of the program.  A summary of the technology costs is included in Table IV-17 through Table IV-20 for MYs 2018 through 2027, with additional details available in the draft RIA Chapter 2.12. Costs shown in the following tables are for the specific model year indicated and are incremental to the average reference case costs, which includes some level of adoption of these technologies as shown in Table IV-13.  Therefore, the technology costs in the following tables reflect the average cost expected for each of the indicated trailer classes.  Note that these costs do not represent actual costs for the individual components because some fraction of the component costs has been subtracted to reflect some use of these components in the reference case.  For more on the estimated technology costs exclusive of adoption rates, refer to Chapter 2.12 of the draft RIA.  These costs include indirect costs via markups and reflect lower costs over time due to learning impacts.  For a description of the markups and learning impacts considered in this analysis and how technology costs for other years are thereby affected, refer to Chapter 7 of the draft RIA.
Table IV-17:  Trailer Technology Incremental Costs in the 2018 Model Year (2012$) 

                                    53-foot
                                    Dry Van
                                    53-foot
                               Refrigerated Van
                                    28-foot
                                    Dry Van
                                   Non-Aero 
                                & Non-Box 
Aerodynamics
                                                                           $285
                                                                           $285
                                                                             $0
                                                                             $0
Tires
                                                                            $65
                                                                            $65
                                                                            $78
                                                                           $185
Tire inflation system
                                                                           $239
                                                                           $239
                                                                           $435
                                                                           $683
Total
                                                                           $588
                                                                           $588
                                                                           $514
                                                                           $868

Table IV-18:  Trailer Technology Incremental Costs in the 2021 Model Year (2012$)

                                    53-foot
                                    Dry Van
                                    53-foot
                               Refrigerated Van
                                    28-foot
                                    Dry Van
                                   Non-Aero 
                                & Non-Box 
Aerodynamics
                                                                           $602
                                                                           $602
                                                                           $468
                                                                             $0
Tires
                                                                            $65
                                                                            $65
                                                                            $79
                                                                           $175
Tire inflation system
                                                                           $234
                                                                           $234
                                                                           $426
                                                                           $632
Total
                                                                           $901
                                                                           $901
                                                                           $974
                                                                           $807

Table IV-19: Trailer Technology Incremental Costs in the 2024 Model Year (2012$)

                                    53-foot
                                    Dry Van
                                    53-foot
                               Refrigerated Van
                                    28-foot
                                    Dry Van
                                   Non-Aero 
                                & Non-Box 
Aerodynamics
                                                                           $836
                                                                           $836
                                                                           $608
                                                                             $0
Tires
                                                                            $61
                                                                            $61
                                                                            $76
                                                                           $160
Tire inflation system
                                                                           $220
                                                                           $220
                                                                           $412
                                                                           $578
Total
                                                                         $1,116
                                                                         $1,116
                                                                         $1,097
                                                                           $739

Table IV-20:  Trailer Technology Incremental Costs in the 2027 Model Year (2012$)

                                    53-foot
                                    Dry Van
                                    53-foot
                               Refrigerated Van
                                    28-foot
                                    Dry Van
                                   Non-Aero 
                                & Non-Box 
Aerodynamics
                                                                         $1,163
                                                                         $1,034
                                                                           $788
                                                                             $0
Tires
                                                                            $54
                                                                            $54
                                                                            $74
                                                                           $155
Tire inflation system
                                                                           $192
                                                                           $192
                                                                           $391
                                                                           $549
Total
                                                                         $1,409
                                                                         $1,280
                                                                         $1,253
                                                                           $704

Reasonableness of the Proposed Standards
The agencies' proposed decisions on the stringency and timing of the proposed standards focused not only on available technology and the consequent emission reductions and fuel efficiency improvements associated with use of the technology, but also carefully considered issues of cost and lead time, taking into account the circumstances of the trailer manufacturing sector.  Trailer manufacturers would be subject to first-time emission control and fuel consumption regulation under the proposed standards.  These manufacturers are in many cases small businesses, with limited resources to master the mechanics of regulatory compliance.  Thus, the agencies' proposal seeks to provide a reasonable time for trailer manufacturers to become familiar with the requirements and the proposed new compliance regime, given the unique circumstances of the industry and the compliance flexibilities and optional compliance mechanisms specially adapted for this industry segment that we are proposing.
The stringency of the standard is predicated on more widespread deployment of aerodynamic and tire technologies that are already in commercial use.  The availability, feasibility, and level of effectiveness of these technologies are well-documented.  Thus the agencies do not believe that there is any issue of technical feasibility of the proposed standards.  Rather, the key issues reflected in the agencies' proposal are considerations of cost and sufficiency of lead-time  -  including lead-time not only to deploy technological improvements, but also this industry sector to assimilate for the first time the compliance mechanisms of the proposed rule.   
The highest cost shown in Table IV-20 is associated with the long dry vans. We project that the average cost per trailer to meet the proposed MY 2027 standards for these trailers would be about $1,400, which is less than 10 percent of the cost of a new dry van trailer (estimated to be about $20,000).  Other trailer types have lower projected technology costs, and many have higher purchase prices.  As a result, we project that the per-trailer costs for all trailers covered in this regulation will be less than 10 percent of the cost of a new trailer.  This trend is consistent with the expected average control costs for Phase 2 tractors, which are also less than 10 percent of typical tractor costs (see Section III). 
The agencies believe these technologies can be adopted at the rates the standards are predicated on within the proposed lead-time, as discussed above in Section IV.C.(3).  Moreover, we project that most owners would rapidly recover the initial cost of these technologies due to the associated fuel savings, usually in less than two years, as shown in the payback analysis in Section IX.  This payback period is generally considered reasonable in the trailer industry for investments that reduce fuel consumption.
Overall, as discussed above in IV.D.3.c in the context of our assumed technology adoption rates, the gradual increase in stringency of the proposed trailer program over the phase-in period recognizes two important factors that the agencies carefully considered in developing this proposed rule.  One factor is that assumed adoption of technologies many of the aerodynamic technologies that box trailer manufacturers would likely choose are available today and clearly technologically feasible throughout the phase-period.  At the same time, we recognize that the adoption of these technologies across the industry scale envisioned by the proposed program would likely take time.  The standards we are proposing in the interim years represent steady and yet reasonable improvement in average aerodynamic performance toward the final MY 2027 standards.  
Alternative Standards and Feasibility Considered 
As discussed in Section X, the agencies evaluated several different regulatory alternatives representing different levels of stringency for the Phase 2 program.  The results of the analysis of these proposed alternatives are discussed below in Section X of the preamble.  The agencies believe each alternative is feasible from a technical standpoint.  However, each successive alternative increases costs and complexity of compliance for the manufacturers, which can be a prohibitive burden on the large number of small businesses in the industry.  Table IV-21 provides a summary of the alternatives considered in this proposal.
Table IV-21:  Summary of Alternatives Considered for the Proposed Rulemaking
Alternative 1
No action alternative
Alternative 2
Expand the use of aerodynamic and tire technologies at SmartWay levels to all 53-foot box trailers
Alternative 3 
(Proposed Alternative)
Adoption of advanced aerodynamic and tire technologies on all box trailers
Adoption of tire technologies on non-box trailers
Alternative 4
Same technology and application assumptions as Alternative 3 with an accelerated introduction schedule
Alternative 5
Aggressive adoption of advance aerodynamic and tire technologies for all box trailers 
Adoption of aerodynamic and tire technologies for some tank, flatbed, and container chassis trailers
Adoption of tire technologies for the remaining non-box trailers
While we welcome comment on any of these alternatives, we are specifically requesting comment on Alternative 4 for the trailer program identified as Alternative 4 above and in Section X.  The same general technology effectiveness values were considered and much of the feasibility analysis was the same in this alternative and in the proposed alternative, but Alternative 4 applies the adoption rates of higher-performing aerodynamic technologies from Alternative 3 at earlier stages for box trailers.  This accelerated alternative achieves the same final fuel consumption and CO2 reductions as our proposed alternative three years in advance.  The following sections detail the adoption rates, reductions and costs projected for this alternative.
Effectiveness, Adoption Rates, and Technology Costs for Alternative 4
Alternative 4 includes the same trailer subcategories and same trailer technologies as the proposed alternative.  Therefore, the zero-technology baseline trailers (Table IV-7), reference case trailers (Table IV-10) and performance levels (Table IV-8) described in Section IV. D. apply for this analysis as well.  The following sections describe the adoption rates of this accelerated alternative and the associated benefits and costs.  
Projected Technology Adoption Rates for Alternative 4
The adoption rates and average performance parameters projected by the agencies for Alternative 4 are shown in Table IV-22 and Table IV-23.  Adoption rates for non-aero box and non-box trailers remain unchanged from the proposed standards and they are not repeated in this section.  From the tables, it can be seen that the 2018 MY aerodynamic technology adoption rates and the tire technology adoption rates for all model years are identical to those presented previously for the proposed standards.  The aerodynamic projections for MY 2021 and MY 2024 in this accelerated alternative are the same as those projected for MY 2024 and MY 2027 of the proposed standards, but are applied three years earlier.  In this alternative, the 2021 MY adoption rates would continue to apply for the partial-aero box trailers in 2024 and later model years.  
Table IV-22:  Adoption Rates and Average Performance Parameters for the Long Box Trailers in
 Alternative 4
TECHNOLOGY
                                   LONG BOX
                                   DRY VANS
                                   LONG BOX
                               REFRIGERATED VANS
Model Year
                                     2018
                                     2021
                                     2024
                                     2018
                                     2021
                                     2024
Aerodynamic Technologies [a]
Bin I
                                                                             5%
                                                                               
                                                                               
                                                                             5%
                                                                               
                                                                               
Bin II
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Bin III
                                                                            30%
                                                                               
                                                                               
                                                                            30%
                                                                               
                                                                               
Bin IV
                                                                            60%
                                                                            25%
                                                                               
                                                                            60%
                                                                            25%
                                                                               
Bin V
                                                                             5%
                                                                            10%
                                                                            10%
                                                                             5%
                                                                            10%
                                                                            20%
Bin VI
                                                                               
                                                                            65%
                                                                            50%
                                                                               
                                                                            65%
                                                                            60%
Bin VII
                                                                               
                                                                               
                                                                            40%
                                                                               
                                                                               
                                                                            20%
Bin VIII
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Average Delta CDA (m[2]) [a]
                                                                            0.4
                                                                            0.8
                                                                            1.1
                                                                            0.4
                                                                            0.8
                                                                            1.0
Trailer Tire Rolling Resistance
Baseline tires
                                                                            15%
                                                                             5%
                                                                             5%
                                                                            15%
                                                                             5%
                                                                             5%
Level 1 tires
                                                                            85%
                                                                            95%
                                                                               
                                                                            85%
                                                                            95%
                                                                               
Level 2 tires
                                                                            95%
                                                                            95%
Average CRR (kg/ton) [a]
                                                                            5.2
                                                                            5.1
                                                                            4.8
                                                                            5.2
                                                                            5.1
                                                                            4.8
Tire Inflation System
ATI
                                                                            85%
                                                                            95%
                                                                            95%
                                                                            85%
                                                                            95%
                                                                            95%
Average ATI Reduction (%) [a]
                                                                           1.3%
                                                                           1.4%
                                                                           1.4%
                                                                           1.3%
                                                                           1.4%
                                                                           1.4%
Weight Reduction (pounds)
Weight [b]
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
      Notes: 
      A blank cell indicates a zero value
      [a]: Combines adoption rates with performance levels shown in Table IV-8
      [b]: This set of adoption rates did not apply weight reduction to meet the proposed standards for these trailers

Table IV-23: Adoption Rates and Average Performance Parameters for the Short Box Trailers in
 Alternative 4
TECHNOLOGY
                                   SHORT BOX
                                   DRY VANS
                                   SHORT BOX
                               REFRIGERATED VANS
Model Year
                                     2018
                                     2021
                                     2024
                                     2018
                                     2021
                                     2024
Aerodynamic Technologies [a]
Bin I
                                                                           100%
                                                                               
                                                                               
                                                                           100%
                                                                               
                                                                               
Bin II
                                                                               
                                                                            70%
                                                                            30%
                                                                               
                                                                            70%
                                                                            55%
Bin III
                                                                               
                                                                            30%
                                                                            60%
                                                                               
                                                                            30%
                                                                            40%
Bin IV
                                                                               
                                                                               
                                                                            10%
                                                                               
                                                                               
                                                                             5%
Bin V
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Bin VI
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Bin VII
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Bin VIII
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
Average Delta CDA (m[2]) [b]
                                                                            0.4
                                                                            0.8
                                                                            1.1
                                                                            0.4
                                                                            0.8
                                                                            1.0
Trailer Tire Rolling Resistance
Baseline tires
                                                                            15%
                                                                             5%
                                                                             5%
                                                                            15%
                                                                             5%
                                                                             5%
Level 1 tires
                                                                            85%
                                                                            95%
                                                                               
                                                                            85%
                                                                            95%
                                                                               
Level 2 tires
                                                                            95%
                                                                            95%
Average CRR (kg/ton) [b]
                                                                            5.2
                                                                            5.1
                                                                            4.8
                                                                            5.2
                                                                            5.1
                                                                            4.8
Tire Inflation System
ATI
                                                                            85%
                                                                            95%
                                                                            95%
                                                                            85%
                                                                            95%
                                                                            95%
Average ATI Reduction (%) [b]
                                                                           1.3%
                                                                           1.4%
                                                                           1.4%
                                                                           1.3%
                                                                           1.4%
                                                                           1.4%
Weight Reduction (pounds)
Weight [c]
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
     Notes: 
     A blank cell indicates a zero value
     [a]: The majority of short box trailers are 28 feet in length.  We recognize that they are often operated in tandem, which limits the technologies that can be applied (for example, boat tails). We established standards assuming these shorter trailers were run solo, but projected reduced aerodynamic improvements compared to the longer trailers with similar technologies to reflect their frequent tandem operation.
     [b]: Combines adoption rates with performance levels shown in Table IV-8
     [c]: This set of adoption rates did not apply weight reduction to meet the proposed standards for these trailers
Derivation of the Standards for Alternative 4
Similar to the proposed standards of Section IV. D. (3) (d), the agencies applied the technology performance values from Table IV-22 and Table IV-23 as GEM inputs to derive the proposed standards for each subcategory.  
Table IV-24 shows the resulting standards for Alternative 4.  Over the three phases of the alternative, box trailers longer than 50 feet would, on average, reduce their CO2 emissions and fuel consumption by two percent, six percent and eight percent.  Box trailers 50-foot and shorter would achieve reductions of two percent, three percent, and four percent compared to the reference case.  Partial-aero box trailers would continue to be subject to the 2021 MY standards for MY 2024 and later.  The non-aero box and non-box trailers would meet the same standards as shown in the proposed Alternative 3 and achieve the same two and three percent benefits as shown in the proposed alternative.  
Table IV-24:  Trailer CO2 and Fuel Consumption Standards for Box Trailers in Alternative 4
MODEL
YEAR
SUBCATEGORY
                                    DRY VAN
                               REFRIGERATED VAN
LENGTH
                                     LONG
                                     SHORT
                                     LONG
                                     SHORT
2018 - 2020
EPA Standard 
                                      83
                                      144
                                      84
                                      147

(CO2 Grams per Ton-Mile)





Voluntary NHTSA Standard
                                    8.1532
                                    14.1454
                                    8.2515
                                    14.4401

(Gallons per 1,000 Ton-Mile)




2021 - 2023
EPA Standard
                                      80
                                      142
                                      81
                                      145

(CO2 Grams per Ton-Mile)





NHTSA Standard
                                    7.8585
                                    13.9489
                                    7.9568
                                    14.2436

(Gallons per 1,000 Ton-Mile)




2024+
EPA Standard
                                      77
                                      140
                                      80
                                      144

(CO2 Grams per Ton-Mile)





NHTSA Standard
                                    7.5639
                                    13.7525
                                    7.8585
                                    14.1454

(Gallons per 1,000 Ton-Mile)





Costs Associated with Alternative 4
A summary of the technology costs is included in Table IV-25 to Table IV-27for MYs 2018, 2021 and 2024, with additional details available in the draft RIA Chapter 2.12. Costs shown in the following tables are for the specific model year indicated and are incremental to the average reference case costs, which includes some level of adoption of these technologies as shown in Table IV-10.  Therefore, the technology costs in the following tables reflect the average cost expected for each of the indicated trailer classes.  Note that these costs do not represent actual costs for the individual components because some fraction of the component costs has been subtracted to reflect some use of these components in the reference case.  For more on the estimated technology costs exclusive of adoption rates, refer to Chapter 2.12 of the draft RIA.  These costs include indirect costs via markups and reflect lower costs over time due to learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to the draft RIA.
Table IV-25:  Trailer Technology Incremental Costs in the 2018 Model Year for Alternative 4 (2012$) 

                                    53-foot
                                    Dry Van
                                    53-foot
                               Refrigerated Van
                                    28-foot
                                    Dry Van
                                   Non-Aero 
                                & Non-Box 
Aerodynamics
                                                                           $285
                                                                           $285
                                                                             $0
                                                                             $0
Tires
                                                                            $65
                                                                            $65
                                                                            $78
                                                                           $185
Tire inflation system
                                                                           $239
                                                                           $239
                                                                           $435
                                                                           $683
Total
                                                                           $588
                                                                           $588
                                                                           $514
                                                                           $868

Table IV-26:  Trailer Technology Incremental Costs in the 2021 Model Year for Alternative 4 (2012$)

                                    53-foot
                                    Dry Van
                                    53-foot
                               Refrigerated Van
                                    28-foot
                                    Dry Van
                                   Non-Aero 
                                & Non-Box 
Aerodynamics
                                                                           $908
                                                                           $908
                                                                           $641
                                                                             $0
Tires
                                                                            $65
                                                                            $65
                                                                            $79
                                                                           $175
Tire inflation system
                                                                           $234
                                                                           $234
                                                                           $426
                                                                           $632
Total
                                                                         $1,207
                                                                         $1,207
                                                                         $1,146
                                                                           $807

Table IV-27: Trailer Technology Incremental Costs in the 2024 Model Year for Alternative 4 (2012$)

                                    53-foot
                                    Dry Van
                                    53-foot
                               Refrigerated Van
                                    28-foot
                                    Dry Van
                                   Non-Aero 
                                & Non-Box 
Aerodynamics
                                                                         $1,223
                                                                         $1,090
                                                                           $816
                                                                             $0
Tires
                                                                            $61
                                                                            $61
                                                                            $76
                                                                           $160
Tire inflation system
                                                                           $220
                                                                           $220
                                                                           $412
                                                                           $578
Total
                                                                         $1,504
                                                                         $1,371
                                                                         $1,304
                                                                           $739

The agencies believe that although the Alternative 4 costs and emission/fuel consumption reductions would be similar to those of Alternative 3, we have concerns about the adequacy of the significantly shorter lead-time for compliance with Alternative 4.  As discussed earlier, the ability for manufacturers in this industry to broadly take the necessary technical steps while becoming familiar with first-time regulatory responsibilities would be significantly limited with three fewer years of lead-time.  As reinforced in the SBAR Panel Report, this challenge would not be equal across the industry, often falling more heavily on smaller trailer manufacturers.    
The agencies request comment on the feasibility and costs for trailer manufacturers to achieve the Alternative 4 standards by applying advanced aerodynamic technologies with three years less lead-time than Alternative 3 would provide.  The agencies also request comment on particular burdens that these aggressive adoption rates could have on small business trailer manufacturers.  

Trailer Standards: Compliance and Flexibilities 
Under the proposed structure, trailer manufacturers would be required to obtain a certificate of conformity from EPA before introducing into commerce new trailers subject to the proposed new trailer CO2 and fuel consumption standards.  See CAA section 206(a).  The certification process the agencies are proposing for trailer manufacturers is very similar in its basic structure to the process for the tractor program.  This structure involves pre-certification activities, the certification application and its approval, and end-of-year reporting.
In this section, the agencies first describe the GEM vehicle simulation tool and the general certification process, followed by a discussion of the proposed test procedures for measuring the performance of tires and aerodynamic technologies and how manufacturers would apply test results toward compliance and certification.  The section closes with discussions of several other proposed certification and compliance provisions as well as proposed provisions to provide manufacturers with compliance flexibility.   
Role of the Greenhouse Gas Emission Model (GEM) Simulation Tool in Trailer Compliance 
The agencies are committed to introducing a compliance program for trailer manufacturers that is straightforward, technically robust, transparent, and that minimizes new administrative burdens on the industry.  GEM is a customized vehicle simulation model that EPA developed for the Phase 1 program for demonstrating heavy-duty vehicle compliance. This approach allows characteristics of the vehicle to be measured directly and used as inputs to the simulation tool instead of performing full-vehicle testing.  For this proposed rulemaking, we are proposing that compliance with the trailer standards be demonstrated using the GEM simulation tool as a means of reducing the testing burden on trailer manufacturers.  
For the proposed trailer program, the characteristics that a manufacturer would supply to the model are aerodynamic improvements (i.e., a change in the aerodynamic drag area, delta CDA), tire rolling resistance (i.e., coefficient of rolling resistance, CRR), the presence of an automatic tire inflation (ATI) system, and the use of pre-determined light-weight components.  The model quantifies the overall performance of the trailer in terms of CO2 emissions and fuel consumption on a per ton-mile basis.    
General Certification Process
Under the proposed process for certification, trailer manufacturers would be required to apply to EPA for certification and would provide performance test data (see 40 CFR 1037.205) in their applications.  A staff member from EPA's Compliance Division (in the Office of Transportation and Air Quality) would be assigned to each trailer manufacturer to help them through the compliance process.  Although not required, we recommend that manufacturers arrange to meet with the agencies to discuss compliance plans and obtain any preliminary approvals (e.g., appropriate test methods) before applying for certification.   
Trailer manufacturers would submit their applications through the EPA VERIFY electronic database, and EPA would issue certificates based on the information provided.  At the end of the model year, trailer manufacturers would submit an end-of-year report to the agencies to complete their annual obligations.
The proposed EPA certification provisions also contain provisions for applying to the NHTSA program.  EPA and NHTSA would coordinate on any enforcement action required.  
Preliminary Considerations for Compliance
Prior to submitting an application for a certificate, a manufacturer would choose the technologies they plan to offer their customers, obtain performance information for these technologies, and identify any trailers in their production line that qualify for exclusion from the program.  Manufacturers that choose to perform aerodynamic or tire testing would obtain approval of test methods and perform preliminary testing as needed.  During this time, the manufacturer would also decide the strategy they intend to use for compliance by identifying "families" for the trailers they produce.  A family is a grouping of similar products that would all be subject to the same standard and covered by a single certificate.  
At its simplest, the program would allow all products in each of the trailer subcategories to be certified as separate families.  That is, long box dry vans, short box dry vans, long refrigerated vans, short refrigerated vans, non-box trailers, partial-aero trailers (long and short box, dry and refrigerated van), and non-aero trailers, could each be certified as separate trailer families.  If a manufacturer chooses this approach, all products within a family would need to meet or do better than the standards for that trailer subcategory.  This is not to say that, for example, every long box dry van model would need to have identical technologies like skirts, tires, and tire inflation systems, but that every model in that family would need to have a combination of technologies that had performance representative of testing demonstrated for that family.  (Because the manufacturer would not be using averaging provisions, a trailer that "over-complied" could not offset a trailer that did not meet that family's emission limit).    
If a trailer manufacturer wishes to take advantage of the proposed averaging provisions, it could divide the trailer models in each of the standard box trailer categories (i.e., not including the non-box trailer or non-aero box trailer categories) into subfamilies.  Each subfamily could be a grouping of trailers that have with similar performance levels, even if they use different technologies.  We call the performance levels for each subfamily as "Family Emission Limits" (FELs).  A long box dry van manufacturer could choose, for example, to create two or more subfamilies in its long box dry van family.  Trailers in one or more of these subfamilies could be allowed to under-comply with the standard (e.g., if the manufacturer chose not to apply ATI or chose tires with higher rolling resistance levels) as long as the performance of the other subfamilies over-comply with the standard (e.g., if the manufacturer applied higher-performing skirts) such that the average of all of the subfamilies' FELs met or did better than the stringency for that family on a production-weighted basis.  Section IV.F.6.a below further discusses how the proposed averaging program would function for any such trailer subfamilies.  
Submitting a Certification Application and Request for a Certificate to EPA
Once the preliminary steps are completed, the manufacturer can prepare and submit applications to EPA for certificate of conformity for each of its trailer families.  The contents of the application are specified in 40 CFR 1037.205, though not all items listed in the regulation are applicable to each trailer manufacturer.  
For the early years of the program (i.e., 2018 through 2020), the application must specify whether the trailer manufacturer is opting into the NHTSA voluntary program to ensure the information is transferred between the agencies.  It must also include a description of the emission controls that a manufacturer intends to offer.  These emission controls could include aerodynamic features, tire models, tire inflation systems or components that qualify for weight reduction.  Basic information about labeling, warranty, and recommended maintenance should also be included the application (see Section IV.F.5 for more information).
The manufacturer would also provide a summary of the plans to comply with the standard.  This information would include a description of the trailer family and subfamilies (if applicable) covered by the certificate and projected sales of its products.  Manufacturers that do not participate in averaging would include information on the lowest level of CO2 and fuel consumption performance offered in the trailer family.  Manufacturers who choose to average within their families would include performance information for the projected highest production trailer configuration, as well as the lowest and the highest performing configurations within that trailer family.
End-of-Year Obligations
After the end of each year, all manufacturers would need to submit a report to the agencies presenting production-related data for that year (see 40 CFR 1037.250 and 49 CFR 535.8).  In addition, manufacturers participating in the averaging program would submit an end-of-year report containing both emissions and fuel consumption information for both agencies.  This report would include the year's final compliance data (such as GEM results) and actual sales in order to demonstrate that the trailers either met the standards for that year or that the manufacturer generated a deficit to be reconciled within the next three years under the averaging provisions (see 40 CFR 1037.250 and 49 CFR 535.7).  All certifying manufacturers would need to maintain records of all the data and information required to be supplied to EPA and NHTSA for eight years.  
Trailer Certification Test Protocols
The Clean Air Act specifies that compliance with emission standards for motor vehicles be demonstrated using emission test data (see CAA section 206(a) and (b)).  The Act does not require the use of specific technologies or designs.  Similar to the tractor and vocational vehicle programs, the agencies are proposing that, for the long term, the GEM simulation tool function as the official "test procedure" for quantifying CO2 and fuel consumption performance for trailer compliance and certification.  The model requires performance information from the trailer technologies applied in order to calculate their impact on overall trailer performance.  The agencies are proposing to assign performance levels to ATI systems and specific weight reduction values to pre-determined component substitutions.  Aerodynamic and tire rolling resistance performance would be obtained by the trailer manufacturers.  The following sections describe the approved performance tests for tire rolling resistance and aerodynamic drag.  Non-box and non-aero box trailers have tire requirements only.  Manufacturers of these trailers will only need to obtain results from the tire performance tests.  Long and short box trailers are expected to use aerodynamic and tire technologies to meet the proposed standards and will need to obtain test results from both procedures.  See generally proposed 40 CFR part 1037, subpart F for full description of the proposed performance tests, and see in particular proposed sections 1037.520(a)(1)(i)-(iii), (b)(4), and (c).  
Trailer Tire Performance Testing
Under Phase 1, tractor and vocational chassis manufacturers are required to input the tire rolling resistance coefficient into GEM and the agencies adopted the provisions in ISO 28580:2009(E) to determine the rolling resistance of tires.  As described in 40 CFR 1037.520(c), this measured value, expressed as CRR, is required to be the result of at least three repeat measurements of three different tires of a given design, giving a total of at least nine data points.  Manufacturers specify a CRR value that for GEM that may not be lower than the average of these nine results.  Tire rolling resistance may be determined by either the vehicle or tire manufacturer. In the latter case, the tire manufacturer would provide a signed statement confirming that it conducted testing in accordance with this part.
Similar to the tractor program, we propose to extend the Phase 1 testing provisions for tire rolling resistance to apply to the Phase 2 trailer program.  The average rolling resistance value obtained from this test would be used to specify the tire rolling resistance level (TRRL) for the trailer tires in the GEM simulation.  Based on the current practice for tractors, we expect the trailer manufacturers to obtain these data from tire manufacturers.  We welcome comments regarding the proposed tire testing provisions as they relate to the proposed trailer program.
Trailer Aerodynamic Performance Testing
Our proposed trailer aerodynamic test procedures are based on the current and proposed tractor procedures for testing aerodynamic control devices, including coastdown, constant speed, wind tunnel, and computational fluid dynamics (CFD) modeling.  The purpose of the tests is to establish an estimate of the aerodynamic drag experienced by a tractor-trailer vehicle in real-world operation. In the tractor program, the resulting CdA value represents the aerodynamic drag of a tested tractor assumed to be pulling a specified standard trailer.  In the proposed trailer program, the CDA value modeled in GEM would represent the tested trailer pulled by a standard tractor.  
Details of the test procedures can be found in 40 CFR 1037.521 and a discussion of EPA's aerodynamic testing program as it relates to the proposed trailer program are provided in the draft RIA Chapter 3.2.  The following sections outline the testing requirements proposed for the long term trailer program, as well as simpler testing provisions that would apply in the nearer term.  
A to B Testing for Trailer Aerodynamic Performance 
A key difference between the proposed tractor and trailer programs is that while the tractor procedures provide a direct measurement of an absolute CDA value for each tractor model, the agencies expect a majority of the aerodynamic improvements for trailers will be accomplished by adding bolt-on technologies.  As a result, we are proposing to evaluate the aerodynamic improvements for trailers by measuring a change in CDA (delta CDA) relative to a baseline.   Specifically, we propose that the trailer tests be performed as "A to B" tests, comparing the aerodynamic performance of a tractor-trailer without a trailer aerodynamic device to one with the device installed.  See Draft RIA Chapter 2.10 for more information on this approach.  
The agencies note that it was relatively straightforward in Phase 1 to establish a standard trailer with enough specificity to ensure consistent testing of tractors, since there are relatively small differences in aerodynamic performance of base-model dry van trailers.  However, as discussed in Chapter 2.10 of the draft RIA, small differences in tractor design can have a significant impact on overall tractor-trailer aerodynamic performance.  An advantage of an A to B test approach for trailers is that many of the differences in tractor design are canceled-out, which allows a variety of standard tractors to be used in testing without compromising the evaluation of the trailer aerodynamic technology.  Thus, the relative approach does not require the agencies to precisely specify a standard tractor, nor does it require trailer manufacturers to purchase, modify or retain a specific tractor model in order to evaluate their trailers.  
 In essence, an A to B test is a set of tests: one test of a baseline tractor-trailer with zero trailer aerodynamic technologies (A), and one test that includes the aerodynamic devices to be tested (B).  However, because an A test would relate to a B test only with respect to the test method and the test trailer length, one A test could be used for many different B tests.  This type of testing would result in a delta CDA value instead of an absolute CDA value.  For the trailer program, the vehicle configuration in the A test would include a standard tractor that meets specified characteristics, and a manufacturer's baseline trailer with no aerodynamic improvements.  The entity conducting the testing (e.g., the trailer manufacturer or the trailer aerodynamic device manufacturer, as discussed below) would perform the test for this configuration according to the procedures in 40 CFR 1037.521 and repeat the test for the B configuration, which includes the trailer aerodynamic package/device(s) being tested.  The delta CDA value for that trailer with that device would be the difference between the CDA values obtained in the A and B tests.  
In the event that a trailer manufacturer makes major changes to the aerodynamic design of its trailer in lieu of installing add-on devices, trailer manufacturers would use the same baseline trailer for the A configuration as would be used for bolt-on features.  In both cases, the baseline trailer would be a manufacturer's standard box trailer.   Thus, the manufacturer of a redesigned trailer would get full credit for any aerodynamic improvements it made.  
The agencies are proposing to determine the delta CDA for trailer aerodynamics using the zero-yaw (or head-on wind) values.  The agencies are not proposing a reference method (i.e., the coastdown procedure in the tractor program).  Instead, we are proposing to allow manufacturers to perform any of the proposed test procedures to establish a delta CDA.  Since the proposed coastdown and constant speed procedures include wind restrictions, we are proposing to only accept the zero-yaw values from aerodynamic evaluation techniques that are capable of measuring drag at multiple yaw angles (e.g., wind tunnels and CFD) to allow cross-method comparison and certification.  The agencies welcome comment on the pros and cons of exclusive use of zero-yaw data from trailer aerodynamic compliance testing.  We recognize that the benefits of aerodynamic devices can be higher when measured considering wind from other yaw angles.  We request comment on the possibility of allowing manufacturers to use wind-averaged results for compliance if they choose to test using procedures that provide wind-averaged values.  Chapter 2.10 of the draft RIA compares zero-yaw and wind-averaged results from EPA's wind tunnel testing.  We request that commenters provide test data to support any preference for compliance test results. We also request comments on strategies that could be used to maintain consistency with other methods that cannot provide wind-averaged results.  
Standard Tractor for Aerodynamic Testing in the Proposed Trailer Program 
The final test procedure for trailer compliance will be to use EPA's GEM vehicle simulation tool.  Our discussion of the feasibility of our proposed standards (Section IV. D. (3) (a)) includes a description of the tractor-trailer vehicle used in that model.  We recognize the impact of the tractor and want to maintain consistency with GEM, but it is not necessary to address all aspects (e.g., the engine) of the tractor, because, as explained above, the impact of many of its features will be canceled-out with the use of an A to B test strategy.  However, some aerodynamic design features of the tractor can influence the performance of trailer aerodynamic technologies and we want to ensure a level of consistency between tests of different trailer manufacturers.  
The agencies believe the A to B test strategy would reduce the degree of precision with which the standard tractor needs to be specified.  Instead of identifying a specific make and model of a tractor to be used over the entire duration of the program, the agencies would instead identify key characteristics of a standard tractor.  EPA's trailer testing program investigated the impact of tractor aerodynamics on the performance of trailer aerodynamic technologies, as mentioned in Chapter 2.10 of the draft RIA.  In order to maintain a minimal level of performance, we are proposing that tractors used in trailer aerodynamic tests meet Phase 2 Bin III or better tractor requirements (See Section III.D.).  We believe the majority of tractors in the U.S. trucking fleet will be Bin III or better in the timeframe of this rulemaking, and trailer manufacturers have the option to choose higher-performing tractors in later years as tractor technology improves.  The standard tractor for long-box trailers is a Class 8 high-roof sleeper cab.  The standard tractor for short box trailers is a Class 8 high roof day cab.  Trailer manufacturers are free to choose any standard tractor that meets these criteria in their aerodynamic performance testing.  See 40 CFR 1037.501.
Bins for Aerodynamic Performance
As mentioned in Section IV. D. (1) (a), the agencies are proposing aerodynamic bins for manufacturers to account for testing variability and to provide consistency in the model parameters provided to GEM.  These bins were developed in terms of delta CDA ranges, and designed to be broad enough to cover the range of uncertainty seen in our aerodynamic testing program in terms of test-to-test variability as well as variability due to differences in test method, tractor models, trailer models and device models.    
Table IV-28:  Aerodynamic Bins Used to Determine GEM Inputs for Trailer Certification
                         DELTA CDA MEASURED IN TESTING
                                      BIN
                                   AVERAGE 
                                  DELTA CDA 
                                 INPUT FOR GEM
                                     0.09
                                     Bin I
                                      0.0
                                  0.10 - 0.19
                                    Bin II
                                      0.1
                                  0.20 - 0.39
                                    Bin III
                                      0.3
                                  0.40 - 0.59
                                    Bin IV
                                      0.5
                                  0.60 - 0.79
                                     Bin V
                                      0.7
                                  0.80 - 1.19
                                    Bin VI
                                      1.0
                                  1.20 - 1.59
                                    Bin VII
                                      1.4
                                   > 1.6
                                   Bin VIII
                                      1.8
A manufacturer that wished to perform testing would first identify a standard tractor (according to 40 CFR 1037.521) and a representative baseline trailer with no aerodynamic features, then perform the A to B tests with and without aerodynamic devices and obtain a delta CDA value.  The manufacturer would use Table IV-28 to determine the appropriate bin based on their delta CDA.  Each bin has a corresponding average delta CDA value which is the value manufacturers apply in GEM for compliance.
Aerodynamic Device Testing Alternative
The agencies recognize that much of the trailer manufacturing industry may have little experience with aerodynamic performance testing.  As such, we are proposing an alternative compliance option that we believe will minimize the testing burden for trailer manufacturers, meet the requirements of the Clean Air Act and of EISA, and provide reasonable assurance that the anticipated CO2 and fuel consumption benefits of the program will be realized in real-world operation.   
The agencies are proposing to allow trailer aerodynamic device manufacturers to seek preliminary approval of their devices (or combinations of devices) based on the same performance tests described previously in Section IV. F. (3) (b)(i).  Device manufacturers would perform the required A to B testing of their device(s) on a trailer that meets the requirements specified in 40 CFR 1037.211 and 1037.521(b)(3) and submit the performance results, in terms of delta CDA, directly to EPA.  Trailer manufacturers could then choose to adopt approved devices and apply their performance levels in the certification application for their trailer families.  This approach would provide an opportunity for trailer manufacturers to choose EPA pre-approved technologies for installation on their new trailers and obtain the performance values needed for certification with GEM without performing their own aerodynamic testing.  We note that this proposed testing alternative is consistent with recommendations of the SBAR Panel.  The Panel Report is summarized below in Section XV.D.    
If trailer manufacturers wish to use multiple devices that were individually pre-approved for Phase 2, the proposed program provides a process for combining the effects of multiple devices to determine an appropriate delta CDA value for compliance.   More specifically, such manufacturers would fully count the technology with largest delta CDA value, discount the second by 10 percent, and discount each of the remaining additional technologies by 20 percent.  This discounting would acknowledge the complex interactions among individual aerodynamic devices and would provide a conservative value for the impact of the combined devices.  For example, a manufacturer applying three separately tested devices with delta CDA values of 0.40, 0.30, and 0.10 would calculate the combined delta CDA as:  
Delta CDA = 0.40 + 0.90*0.30 + 0.80*0.10 = 0.75 m[2]
In addition, the agencies believe that discounting the delta CDA values of individually-tested devices used as a combination would provide a modest incentive for trailer or device manufacturers to test and get EPA pre-approval of the combination as an aerodynamic system for compliance.  We propose that device manufacturers be allowed to test and receive EPA pre-approval for combinations of devices, and that trailer manufacturers that wish to use those specific combinations be allowed to use the results from the tests of the combined devices.
The agencies propose that this alternative testing approach  -  whereby device manufacturers rather than trailer manufacturers do aerodynamic testing  -  be an interim measure, although we are not proposing an end date at this time.  Rather we would monitor use of this option and make changes in the future as necessary.  The agencies note that many of the largest box trailer manufacturers are already performing aerodynamic test procedures to some extent, and the agencies expect other box trailer manufacturers will increasingly be capable of performing these tests as the program progresses.  
The proposed alternative testing approach is intended to allow trailer manufacturers to focus on and become familiar with the certification process in the early years of the program and, if they wish, begin to perform testing in the later years, when it may be more appropriate for their individual companies.  This approach would not preclude trailer manufacturers from performing their own testing at any time, even if the technologies they wish to install are already pre-approved.  For example, a manufacturer that believed a specific trailer actually performed in a more synergistic manner with a given device than the device's pre-approved delta CDA value suggested could perform its own testing and submit the results to EPA for certification.  The process to obtain approval is outlined in the proposed 40 CFR 1037.150(n) and 1037.211.
Use of GEM for Trailer Compliance
The agencies are proposing standards for non-box and non-aero box trailers based on the use of tires with rolling resistance levels at or below a threshold, and on ATI systems.  As part of their certification application, manufacturers of these trailers would submit their tire rolling resistance levels and a description of their ATI system(s) to EPA.  As long as the trailer manufacturer certifies that they will install the appropriate tires and ATI systems on all of their trailers, the agencies do not believe it is necessary to require these trailer manufacturers to use GEM and report the results of the model to the agencies to demonstrate compliance.  We are not proposing to recognize weight reduction options for these trailers in this proposal as a means of reducing the compliance burden on these manufacturers.  We seek comment on this decision and welcome suggestions that would allow non-box and non-aero box trailers to adopt weight reduction strategies without the potential added burden of using averaging or using GEM to adequately demonstrate performance.
Box trailer manufacturers who apply more than tire technologies to meet the standards would use GEM to combine the effects of these technologies and quantify the overall performance of the vehicle to demonstrate compliance.  Trailer manufacturers would obtain delta CDA and tire rolling resistance values from testing (either from their own testing or testing performed by another entity as described previously) and note if they installed a qualifying automatic tire inflation system or made a component substitution that qualifies for weight reduction.  Manufacturers would directly apply the delta CDA and TRRL values into the model.  By selecting "yes" to an ATI system, GEM would apply a 1.5 percent reduction in CO2 and fuel consumption.  Qualifying components for weight reduction can be found in 40 CFR 1037.520(e).  Manufacturers that substitute one or more of these components on their box trailers would sum the weight reductions assigned to each component and enter that total into the GEM input file.  GEM will assign one-third of that reduced weight to increase the payload and the remaining reduces the overall weight of the simulated vehicle. 
For this proposal, we are requiring that GEM be used to take advantage of the agencies' proposed averaging provisions.  Prior to submitting a certificate application, manufacturers would decide which technologies to make available for their customers and use GEM to determine the range performance of the packages they will offer.  Manufacturers would supply these GEM results in their certificate application and those manufacturers that wish to perform averaging would continue to run GEM throughout the model year and keep records of the results for each trailer package sold.  As described in Section IV.F.2.c above, at the end of the year, manufacturers would submit two reports.  One report would include their production volumes for each configuration.  The second report, required for manufacturers using averaging, would summarize the families and subfamilies, and CO2 emissions and fuel consumption results from GEM for all of the trailer configurations they build.
Box trailer manufacturers who do not participate in averaging would also use GEM to ensure that all of the trailer configurations they offer will meet the standard for the given model year.  These GEM runs could be performed by the manufacturer prior to submitting a certificate application, but it is not necessary for the manufacturer to use GEM throughout the model year unless a new technology package is offered.  These manufacturers would submit a single end-of-year report that would include their production volumes and confirmation that all of their trailers applied the technology packages outlined in their application.    
Proposed Design-Based Certification Option
We are proposing interim provisions for MY 2018 through MY 2023 that would allow trailer manufacturers to forgo the use of GEM by using an optional "design-based" certification approach.  (This approach would be an optional means of complying with the standards; it is not related to the proposed "design-based standards" discussed in IV.D.3.d above)  That is, manufacturers that choose this option would need to meet certain technical characteristics.  Specifically, for those trailers, manufacturers would need to apply ATI systems and meet minimum performance thresholds for tire rolling resistance and delta CDA, where applicable (Table IV-29).  Averaging provisions would not apply under this option.  Although the SBAR Panel did not specifically consider this approach, we believe that small manufacturers of trailers would likely find this simplifying technique to be especially useful. 
Several aerodynamic technology options and tire models are available that meet the minimum requirements in the table, and trailer manufacturers would continue to have a choice in ATI systems.  The agencies believe that although these provisions would somewhat reduce a trailer manufacturer's flexibility compared to the primary program, the provisions would still provide trailer manufacturers multiple means of achieving the requirements.  The added benefit of these provisions would be a significantly lower compliance burden in the early years of the program.  
The agencies request comment on this proposed design-based certification option.  We are particularly interested in comments related to extending this option beyond 2023, including whether a design-based certification strategy would be feasible in the later years of the program when manufacturers would be required to apply technologies in the highest bins for 100 percent of the trailers in each family.
Table IV-29:  Minimum Requirements for Trailer Manufacturers Opting into the Proposed Design-Based Certification Provisions
TECHNOLOGY
                                   LONG BOX
                                   TRAILERS
                                   SHORT BOX
                                   TRAILERS
Model Year
                                   2018-2020
                                   2021-2023
                                   2018-2020
                                   2021-2023
Aerodynamic Technologies
Bin I
                                                                               
                                                                               
                                                                           100%
                                                                               
Bin II
                                                                               
                                                                               
                                                                               
                                                                           100%
Bin III
                                                                               
                                                                               
                                                                               
                                                                               
Bin IV
                                                                           100%
                                                                               
                                                                               
                                                                               
Bin V
                                                                               
                                                                           100%
                                                                               
                                                                               
Bin VI
                                                                               
                                                                               
                                                                               
                                                                               
Bin VII
                                                                               
                                                                               
                                                                               
                                                                               
Bin VIII
                                                                               
                                                                               
                                                                               
                                                                               
Average Delta CDA (m[2])
                                                                            0.5
                                                                            0.7
                                                                            0.0
                                                                            0.1
Trailer Tire Rolling Resistance
Baseline tires
                                                                               
                                                                               
                                                                               
                                                                               
Level 1 tires
                                                                           100%
                                                                           100%
                                                                           100%
                                                                           100%
Level 2 tires
                                                           AVERAGE CRR (KG/TON)
                                                                            5.1
                                                                            5.1
                                                                            5.1
                                                                            5.1
Tire Inflation System
ATI
                                                                           100%
                                                                           100%
                                                                           100%
                                                                           100%
Average ATI Reduction (%)
                                                                           1.5%
                                                                           1.5%
                                                                           1.5%
                                                                           1.5%
Weight Reduction (pounds)
Weight
                                                                             NA
                                                                             NA
                                                                             NA
                                                                             NA
     Note:  A blank cell indicates a zero value
     
Additional Certification and Compliance Provisions
Trailer Useful Life 
Section 202(a)(1) of the CAA specifies that EPA is to propose emission standards that are applicable for the "useful life" of the vehicle.  Based on our own research and discussions with trailer manufacturers, EPA and NHTSA are proposing a regulatory useful life value for trailers of 10 years.  This useful life represents the average duration of the initial use of trailers, before they are moved into less rigorous (e.g., limited use or storage) duty.  We note that the useful life value is 10 years for other heavy-duty vehicles.  However, unlike the other vehicles, we are not proposing to set a mile value for trailers because we do not require odometers for trailers.
Thus, we propose that trailer manufacturers be responsible for meeting the CO2 emissions and fuel consumption standards for 10 years after the trailer is produced.  We believe that manufacturers would be able to demonstrate at certification that their trailers will comply for the useful life of the trailers without durability testing.  The aerodynamic technologies that we expect manufacturers to use to comply with the proposed standards, including side skirts and boat tails, are designed to continue to provide their full potential benefit indefinitely as long as no serious damage occurs.  (See also Section IV.C.6 above describing why we are not proposing separate in-use standards). 
Regarding trailer tires, we recognize that the original lower rolling resistance tires will wear over time and will be replaced several times during the useful life of a trailer, either with new or retreaded tires.  As with the Phase 1 tractor program, to help ensure that trailer owners have sufficient knowledge of which replacement tires to purchase in order to retain the as-certified emission and fuel consumption performance of their trailer for its useful life, we are proposing to require that trailer manufacturers supply adequate information in the owner's manual to allow the trailer owner to purchase replacement tires meeting or exceeding the rolling resistance performance of the original equipment tires.  We believe that the favorable fuel consumption benefit of continued use of LRR tires would generally result in proper replacements throughout the 10-year useful life.  Finally, we are requiring that ATI systems remain effective for at least the 10 year useful life, although some servicing may be necessary.  (See the maintenance discussion in Section IV.D.4.e).  
Emission Control Labels
Historically, EPA-certified vehicles are required to have a permanent emission control label affixed to the vehicle.  The label facilitates the identification of the vehicle as a certified vehicle.  For the trailer program, EPA proposes that the labels include the same basic information as we are proposing to require for tractor labels.  For trailers, this information would include the manufacturer, a trailer identifier such as the Vehicle Identification Number, the trailer family and regulatory subcategory, the date of manufacture, and compliance statements.  Although the proposed Phase 2 label for tractors would not include emission control system identifiers (as previously required for tractors in the Phase 1 program in 40 CFR 1037.135(b) (6)), we are proposing that these identifiers be included in the trailer labels.  As for tractors, we would require manufacturers to maintain records that would allow us to verify that an individual trailer was in its certified configuration.
Warranty
Section 207 of the CAA requires manufacturers to warrant their products to be free from defects that would otherwise cause non-compliance with emission standards.  For purposes of the proposed trailer program, EPA would require trailer manufacturers to warrant all components that form the basis of the certification to the CO2 emission standards.  The emission-related warranty would cover all aerodynamic devices, lower rolling resistance tires, automatic tire inflation systems, and other components that may be included in the certification application.  
The trailer manufacturer would need to warrant that these components and systems are designed to remain functional for the warranty period.  Based on the historical practice of requiring emissions warranties to apply for half of the useful life, we propose that the warranty period for trailers be 5 years for everything except tires.  For trailer tires, we propose to apply a warranty period of 1 year.  Manufacturers could offer a more generous warranty if they chose; however the emissions related warranty may not be shorter than any other warranty offered without charge for the vehicle.  If aftermarket components were installed (unrelated to emissions performance) that offer a longer warranty, this would not impact emission related warranty obligations of the vehicle manufacturer. NHTSA is not proposing any warranty requirements relating to its trailer fuel consumption program.  
At the time of certification, manufacturers would need to supply a copy of the warranty statement that they would supply to the end customer.  This document would outline what is covered under the GHG emissions related warranty as well as the duration of coverage.  Customers would also have clear access to the terms of the warranty, the repair network, and the process for obtaining warranty service.
Maintenance
In general, EPA requires that vehicle manufacturers specify maintenance schedules to keep their product in compliance with emission standards throughout the useful life of the vehicle (CAA section 207).  For trailers, such maintenance could include fairing adjustments or service to ATI systems.  However, EPA believes that any such maintenance is likely to be performed by operators to maintain the fuel savings of the components, and we are not proposing  that trailer manufacturers be required submit a maintenance schedule for these components as part of its application for certification. 
Since low rolling resistance tires are key emission control components under this program, and will likely require replacement at multiple points within the life of a vehicle, it is important to clarify how tires would fit into the emission-related maintenance requirements.  Although the agencies encourage the exclusive use of LRR tires throughout the life of trailers vehicles, we do not proposed to hold trailer manufacturers responsible for the actions of operators.  We do not see this as problematic because we believe that trailer operators have a genuine financial motivation for ensuring their vehicles are as fuel efficient as possible, which includes purchasing LRR replacement tires.  Therefore, as mentioned in Section IV.F.5.a above, to help ensure that trailer owners have sufficient knowledge of which replacement tires to purchase in order to retain the as-certified emission and fuel consumption performance of their trailer, we are proposing to require that trailer manufacturers supply adequate information in the owner's manual to allow the trailer owner to purchase tires meeting or exceeding the rolling resistance performance of the original equipment tires. We would require that these instructions would be submitted to EPA as part of the application for certification.
Flexibilities
The trailer program that the agencies are proposing incorporates a number of provisions that would have the effect of providing flexibility and easing the compliance burden on trailer manufacturers while maintaining the expected CO2 and fuel consumption benefits of the program.  Among these is the basic approach we used in setting the proposed standards, including the staged phase-in of the standards, which would gradually increase the CO2 and fuel consumption reductions that manufacturers would need to achieve over time as they also increase their experience with the program.  As described in the general certification discussion above (Section IV.F.2), another proposed provision would allow trailer manufacturers to designate broad trailer families that would aggregate several models with similar technologies or performance, thus potentially limiting the number of families and the associated family-level compliance requirements.  
In addition to these provisions inherent to the proposed trailer program, the agencies are proposing additional options for certification that we believe would be very valuable to many trailer manufacturers.  One of these is the proposed process for component manufacturers to submit test data directly to EPA for review by the agencies in advance of formal certification, allowing a trailer manufacturer to reduce the amount of testing needed to demonstrate compliance or avoid it altogether.  (See Section IV.F.4 above).
Proposed Averaging Provisions
The agencies are also proposing a limited averaging program as a part of the trailer compliance process for box trailers.  This program would be similar to the Phase 1 averaging program for other sectors, but would be narrower in scope to reflect the unique competitive aspects of the trailer market.  The trailer manufacturing industry is very competitive, and manufacturers must be highly responsive to their customers' diverse demands.  Compared to other industry sectors, this reality can limit the value of the flexibility that averaging could provide to trailer manufacturers, since they can have little control over what kinds of trailer models their customers demand and thus limited ability to manage the mix and volume of different products.  In addition, the majority of trailer manufacturers have very few basic trailer models to offer, potentially putting them at a competitive disadvantage to the small number of larger companies that would be in a position to meet market demands that the smaller companies could not.  For example, one of the larger, more diverse manufacturers could potentially supply a customer with trailers that had few if any aerodynamic features, while offsetting this part of their business with over-complying trailers that they were able to sell to another customer; many smaller companies with limited product offerings might not be able to compete for those customers.  
Although we recognize that there might be potential negative impacts on at least some trailer manufacturers of an average program, we believe that there may be overall value to such a program.  We propose that full-aero box trailer manufacturers may optionally comply with their standards on average for a trailer family in any given model year.  We are not proposing to allow partial-aero box trailers to average.  Instead, all trailers in partial-aero families would need to meet the standard for that subcategory.  We are proposing to allow a trailer manufacturer to combine partial-aero box trailers with the corresponding full-aero trailer family and reduce the number of certification applications required.  We expect this to be particularly beneficial to manufacturers in the early years of the program, when these two trailer categories have identical standards.  Although this option should reduce the compliance paperwork, the partial-aero trailers would not be able to adopt enough technologies to meet the full-aero standards in the later years, and manufacturers would have the option of creating a separate family for these trailers.  Additionally, we are proposing to allow refrigerated trailers to combine with the dry vans of the same length and meet the dry van standards and to allow short box vans to combine with their long box counterparts to meet the long box standards.  
Unlike averaging programs in other sectors, including those in this Phase 2 program, we propose that averaging be limited to a single model year, and manufacturer not be allowed to "bank" credits generated from over-compliance in one year for use in a future year.  In other words, a manufacturer that produces some trailers in a family that perform better than required by the applicable standard would be allowed to produce a number of trailers that do not meet the standards, provided the average of the trailers it produces in any given model year is at or below the standards.  A trailer family performing better than the standard would not be allowed to bank credits for a future model year.  However, as a temporary recourse for unexpected challenges in a given model year, we propose that manufacturers be allowed to generate a deficit that would be resolved within the next three model years, and to allow the manufacturer to use credits they generate from over-compliance in subsequent years to address deficits from prior model years.  As discussed below, we are not proposing this allowance for non-box trailers or non-aero trailers.
We recognize that at each stage of the program, there may be a small fraction of trailer applications for which the trailer manufacturers cannot easily apply all of the aerodynamic and tire technologies.  Thus the proposed dry and refrigerated van standards are designed in the form of family average performance, meaning that each trailer manufacturer would comply on average across the trailer families it produces within each subcategory category (or family).  The proposed program would allow a manufacturer, for example, to comply without full adoption of aerodynamic devices across 100 percent of its box trailer production in a trailer family, as long as it also produced a sufficient number of trailers within that family that performed better than the standard, such that the overall production-weighted GEM results of the trailer models in that family complied with the appropriate standard.  
In addition to the flexibility created by averaging, the proposed box trailer standards themselves are not predicated on a set adoption rate of any one technology.  Manufacturers would be free under the proposed averaging program to choose to apply the appropriate number and type of technologies that met their customers' needs and the level of performance required within a particular trailer family.  The proposed rules in general do not mandate inclusion of any particular technology or other means of emission control.  The agencies believe that, ordinarily, averaging would create an incentive for manufacturers to promote high-performing technologies for some customers, beyond the requirements for that given year, in order to provide other customers with trailers with fewer aerodynamic technologies.
The agencies also recognize, however, that an averaging program would inherently require a higher degree of data management, record keeping, and reporting than one without averaging.  Recognizing that this could impose burdens, especially on small business manufacturers, the agencies are proposing that the averaging provisions be optional; a box trailer manufacturer could choose whether to use averaging for any or all of its standard box trailer subcategories (families), or to forego averaging and simply meet the standards with 100 percent of the production within each family.  Also, unlike some other regulated motor vehicle sectors, we are not proposing that credits from over-compliance be able to be "banked" for use in a later model year, or to be "traded" among trailer manufacturers, since they would exacerbate the competitive issues, especially for small manufacturers, as discussed immediately below.  However, we are proposing to apply to trailers the provisions of Phase 1 for tractors that allow for the generation of a compliance deficit that could be resolved over several years.  Thus, a manufacturer that chose to use averaging, but by the end of the production year found that a trailer family's CO2 and fuel consumption values did not reach that year's standards, could carry a "deficit" that would need to be resolved by the third year following. 
The availability of averaging options also has the potential to be a disadvantage to some companies in a competitive market that is highly customer-driven.  During the SBREFA process, several manufacturers expressed concern about their ability to manage their credit balances in a highly competitive market.  Many believe that they would have little ability to essentially force their customers to purchase the technology, especially if other manufacturers that had credits were able to sell trailers without the technology.  We see this as especially problematic for non-box trailers, which are much more likely to be produced by small businesses, and for which customers may have less interest in fuel savings technologies since they are less often used long-haul applications than are box trailers.  For these reasons, we are proposing averaging only for dry and refrigerated vans. 
The agencies understand that averaging is unfamiliar to many trailer manufacturers and other stakeholders.  We have drafted a supplementary document that includes example scenarios to illustrate the concept of averaging for a hypothetical box trailer manufacturer.   Example adoption rates are provided for a standard compliance program (no averaging), an averaging program, and one that takes advantage of the design-based certification option.
One value of averaging that the agencies have historically cited in several other motor vehicle regulatory programs is that the availability of averaging provisions made it possible for the agencies to propose and enact more stringent standards than would otherwise have been appropriate, recognizing that the expected flexibility of averaging provisions would ease the path to compliance by the more challenged members of the industry.  In the case of trailer manufacturers, however, our decisions on the proposed stringency of the standards is essentially independent of the presence or absence of averaging, since, as discussed above, averaging provisions may have relatively less value to manufacturers in this customer-driven industry and we did not speculate about much or how little it might be used.
We also request comment on whether the burden of managing an averaging program could be more trouble than the flexibility is worth.  In the event that averaging were not allowed, the agencies would need to require that all trailers meeting specified characteristics meet a minimum stringency level without averaging.  If we were to finalize such non-averaging standards, manufacturers would still be allowed to select the appropriate technology package that best achieved their emission performance level, but they would not have the ability to accommodate customers that may request trailers that perform less well on an individual trailer basis.
It is also worth noting that the agencies are not proposing to allow any generation of early credits before MY 2018.  It is clear to us that small businesses would be less prepared to begin complying early than larger businesses, and that allowing large manufacturers to generate early credits that could be used later could put small businesses at a competitive disadvantage.  It does not appear to us that there would be a sufficient broader programmatic benefit from early credits to justify such an adverse impact on small businesses.
We request comment on this proposed averaging option, including whether the program should allow credit and deficit banking and credit trading, as well as on any other potential provisions that could provide compliance flexibility for trailer manufacturers while achieving the goals of the overall program.  Comments supporting averaging, banking, or trading should explain how these provisions would be valuable for trailer manufactures across the industry, including how the provisions would maintain a "level playing field."      
Proposed SmartWay-Based Certification
Since many manufacturers have some experience with the SmartWay program, the agencies are proposing a gradual transition to the proposed approach that recognizes the parallel SmartWay Technology Program.  The agencies expect aerodynamic device manufacturers to continue to submit test data to SmartWay for verification.  Device manufacturers that also wish to have their technology available for trailer manufacturers to use in the Phase 2 program could, in parallel, submit their test data to EPA for pre-approval for Phase 2 (see Section IV.F.4).  The information obtained by EPA from the device manufacturers would include the technology name, a description of its proper installation procedure, and its corresponding delta CDA derived from the approved test procedures.  Any manufacturers that attained SmartWay verification prior to January 1, 2018 would be eligible to submit their previous data to EPA's Compliance Division for pre-approval, provided their test results come from SmartWay's 2014 test protocols that measure a delta CDA.  The protocols for coastdown, wind tunnel, and computational fluid dynamics analyses result in a CDA value.  Note that SmartWay's 2014 protocols allow SAE J1321 Type 2 track testing, which generates fuel consumption results, not CDA values.  The agencies request comment on whether we should pre-approve devices tested using SAE J1321 and also seek comment on an appropriate means of converting from the fuel consumption results of that test to the delta CDA values required for trailer compliance.     
Beginning on January 1, 2018, EPA would require that device manufacturers that wish to seek approval of new technologies for trailer certification use one of the approved test methods for Phase 2 (i.e., coastdown, constant speed, wind tunnel or CFD) and the test procedures found in 40 CFR 1037.521.  Technologies that were pre-approved using SmartWay's 2014 Protocols would maintain their approved status until CY 2021.  After January 1, 2021, we are proposing that all pre-approved aerodynamic trailer technologies be tested using the Phase 2 test procedures.  
Off-Cycle Technologies
The Phase 1 and proposed Phase 2 programs for tractors include provisions for manufacturers to request the use of off cycle technologies that are not recognized in GEM or were not in common use before MY 2010.  In the case of trailers, the agencies believe that any technologies that could improve CO2 and fuel consumption performance should be captured in the test protocols as proposed.  We are therefore not proposing a process to evaluate off-cycle trailer technologies.  
Small Business Regulatory Flexibility Provisions
As a part of our small business obligations under the Regulatory Flexibility Act, EPA and NHTSA have considered additional flexibility provisions aimed at this segment of the trailer manufacturing industry.  EPA convened a Small Business Advocacy Review (SBAR) Panel as required by the Small Business Regulatory Enforcement Fairness Act (SBREFA), and much of the information gained and recommendations provided by this process form the basis of the flexibilities proposed.  As in previous rulemakings, our justification for including provisions specific to small businesses is that these entities generally have a greater degree of difficulty in complying with the standards compared to other entities.  Thus, as discussed below, we are proposing several regulatory flexibility provisions for small trailer manufacturers that we believe would reduce the burden on them while achieving the goals of the program.
We believe that the small business regulatory flexibilities discussed below and in Section XV.C could provide these entities with reduced compliance requirements and/or additional time to accumulate capital internally or to secure capital financing from lenders, and to acquire additional engineering and testing resources. 
The agencies designed many of the proposed program elements and flexibility provisions available to all trailer manufacturers with the large fraction of small business trailer manufacturers in mind.  We believe the option to choose pre-approved aerodynamic devices would significantly reduce the compliance burden and eliminate the requirement for all manufacturers to perform testing.  Additionally, the proposed design-based certification provisions for non-box and non-aero box trailers would further reduce the compliance burden by providing manufacturers the option to certify without the use of GEM. 
As noted above, the small trailer manufacturers raised concerns that their businesses could be harmed by provisions allowing averaging, banking, and trading of emissions and fuel consumption performance, since they would not be able to generate the same volume of credits as large manufacturers.  The agencies are proposing not to include banking and trading provisions in any part of the program, and are limiting the option to average to manufacturers of dry and refrigerated box trailers.  Since a majority of non-box trailer manufacturers are small businesses, we believe a requirement of tire technologies for all non-box trailers creates the most uniformity in requirements between manufacturers and reduces the compliance burden by eliminating the use of GEM. 
In addition to the provisions offered to trailer manufacturers of all sizes, the agencies are proposing or requesting comment on several additional provisions designed specifically to ease compliance burdens on small trailer manufacturers.  For all small business trailer manufacturers, the agencies propose a one-year delay in the beginning of implementation of the program, until MY 2019.  We believe (subject to consideration of public comment) that this will allow small businesses additional needed lead-time to make the proper staffing adjustments and process changes, and possibly add new infrastructure to meet the requirements.  We also request comment about where there may be circumstances in later stages of the program, when the stringency of the standards increase in MY 2021 and 2024, when a similar 1-year delay in implementation could be warranted for small trailer manufacturers.
As mentioned previously, we are proposing to offer averaging provisions for manufacturers of dry and refrigerated box trailers only.  We recognize that the small box trailer manufacturers may not be able to fully take advantage of averaging and may be at a competitive disadvantage with larger manufacturers with larger sales volumes and more diverse product lines.  We request comment on additional provisions that could ease the potential harm to and/or incentivize small business participation in an averaging program. 
For small business manufacturers of box trailers, the agencies propose that if the proposed provisions allowing EPA pre-approval of aerodynamic devices (which is proposed as an interim program) were to end, small business trailer manufacturers could continue to use pre-approved devices and avoid independent testing.  Furthermore, we are proposing to end the interim design-based certification option after MY 2023.  We request comment on whether this option should be extended beyond MY 2023 for small manufacturers.  
The agencies also request comment on provisions for small manufacturers that might face a situation where the technologies needed for compliance are unavailable.  This could be a particular concern for small business non-box and non-aero box trailers that require the use of LRR tires and ATI systems.  We request that trailer manufacturers as well as tire and aerodynamic technology manufacturers provide information regarding the current projected availability of the technologies that trailer manufacturers can use to meet our proposed standards.


Class 2b-8 Vocational Vehicles
Summary of Phase 1 Vocational Vehicle Standards
Class 2b-8 vocational vehicles include a wide variety of vehicle types, and serve a vast range of functions. Some examples include service for urban delivery, refuse hauling, utility service, dump, concrete mixing, transit service, shuttle service, school bus, emergency, motor homes, and tow trucks.  In the HD Phase 1 Program, the agencies defined Class 2b-8 vocational vehicles as all heavy-duty vehicles that are not included in the Heavy-duty Pickup Truck and Van or the Class 7 and 8 Tractor categories.  In effect, the rules classify everything that is not a combination tractor or a pickup truck or van as a vocational vehicle. Class 2b-8 vocational vehicles and their engines emit approximately 20 percent of the GHG emissions and burn approximately 21 percent of the fuel consumed by today's heavy-duty truck sector. 
Most vocational vehicles are produced in a two-stage build process, though some are built from the "ground up" by a single entity.  In the two-stage process, the first stage sometimes is completed by a chassis manufacturer that also builds its own proprietary components such as engines or transmissions.  This is known as a vertically integrated manufacturer. The first stage can also be completed by a chassis manufacturer who procures all components, including the engine and transmission, from separate suppliers.  The product completed at the first stage is generally either a stripped chassis, a cowled chassis, or a cab chassis. A stripped chassis may include a steering column, a cowled chassis may include a hood and dashboard, and a cab chassis may include an enclosed driver compartment.  Many of the same companies that build Class 7 and 8 tractors also sell vocational chassis in the medium heavy- and heavy heavy-duty weight classes. Similarly, some of the companies that build Class 2b and 3 pickups and vans also sell vocational chassis in the light heavy-duty weight classes. 
The second stage is typically completed by a final stage manufacturer or body builder, which installs the primary load carrying device or other work-related equipment, such as a dump bed, delivery box, or utility boom.  There are over 200 final stage manufacturers in the U.S., most of which are small businesses.  Even the large final stage manufacturers are specialized, producing a narrow range of vehicle body types. These businesses also tend to be small volume producers. In 2011, the top four producers of truck bodies sold a total of 64,000 units, which is about 31 percent of sales in that year.  In that same year, 74 percent of final stage manufacturers produced less than 500 units.
The businesses that act both as the chassis manufacturer and the final stage manufacturer are those that build the vehicles from the "ground up." These entities generally produce custom products that are sold in lower volumes than those produced in large commercial processes. Examples of vehicles produced with this build process would include fire apparatus and transit buses.  
  The diversity in the vocational vehicle segment can be primarily attributed to the variety of customer needs for specialized vehicle bodies and added equipment, rather than to the chassis.  For example, a body builder can build either a Class 6 bucket truck or a Class 6 delivery truck from the same Class 6 chassis.  The aerodynamic difference between these two vehicles due to their bodies would lead to different in-use fuel consumption and GHG emissions.  However, the baseline fuel consumption and emissions due to the components included in the common chassis (such as the engine, drivetrain, frame, and tires) would be the same between these two types of vehicles.  
Owners of vocational vehicles that are upfitted with high-priced bodies that are purpose-built for particular applications tend to keep them longer, on average, than owners of vehicles such as pickups, vans, and tractors, which are traded in broad markets that include many potential secondary markets.  The fact that vocational vehicles also generally accumulate far fewer annual miles than tractors further contributes to lengthy trade cycles among owners of these vehicles.  To the extent vocational vehicle owners may be similar to owners of tractors in terms of business profiles, they would be more likely to resemble private fleets or owner-operators than for-hire fleets.  A 2013 survey conducted by NACFE found that the trade cycle of private tractor fleets ranged from seven to 12 years.      
The Phase 1 standards for this vocational vehicle category generally apply at the chassis manufacturer level. For the same reasons given in Phase 1, the agencies propose to apply the Phase 2 vocational vehicle standards at the chassis manufacturer level.
The Phase 1 regulations prohibit the introduction into commerce of any heavy-duty vehicle without a valid certificate or exemption.  Title 40 CFR §1037.620 allows for a temporary exemption for the chassis manufacturer if it produces the chassis for a secondary manufacturer that holds a certificate.  Further discussion of temporary exemptions and possible obligations of secondary manufacturers can be found in Section V. E. 
In Phase 1, the agencies adopted two equivalent sets of standards for Class 2b-8 vocational vehicles.  For vehicle-level (chassis) emissions, EPA adopted CO2 standards expressed in grams per ton-mile. For fuel efficiency, NHTSA adopted fuel consumption standards expressed in gallons per 1,000 ton-miles.  The Phase 1 engine-based standards vary based on the expected weight class and usage of the vehicle into which the engine will be installed.  We adopted Phase 1 vehicle-based standards that vary according to one key attribute, GVWR, based on the same groupings of vehicle weight classes used for the engine standards -- light heavy-duty (LHD, Class 2b-5), medium heavy-duty (MHD, Class 6-7), and heavy heavy-duty (HHD, Class 8). 
In Phase 1, the agencies defined a special regulatory category called vocational tractor, which generally operate more like vocational vehicles than line haul tractors.  As described above in Section III.C.3, under the Phase 1 rules, a vocational tractor is certified under standards for vocational vehicles, not those for tractors.  In Phase 2, the agencies propose to retain the vocational tractor definition, and to allow vocational tractors to certify over any of the proposed vocational vehicle duty cycles, following the same decision-tree as other vocational chassis.  Vocational tractors would continue to satisfy the proposed engine standard and vocational vehicle GEM-based standard, rather than the proposed tractor standard.
Manufacturers are required to use GEM to determine compliance with the Phase 1 vocational vehicle standards, where the primary vocational vehicle manufacturer-generated input is the measure of tire rolling resistance.  The GEM assumes the use of a typical representative, compliant engine in the simulation, resulting in one overall value for CO2 emissions and one for fuel consumption.  The manufacturers of engines intended for use in vocational vehicles are subject to separate Phase 1 engine-based standards. Manufacturers also may demonstrate compliance with the CO2 standards in whole or in part using credits reflecting CO2 reductions resulting from technologies not reflected in the GEM testing regime.  See 40 CFR Section 1037.610.
In Phase 1, EPA and NHTSA also adopted provisions designed to give manufacturers a degree of flexibility in complying with the standards.  Most significantly, we adopted an ABT program to allow manufacturers within the same averaging set to comply on average. See 40 CFR Section 1037 subpart H. These provisions enabled the agencies to adopt overall standards that are more stringent than we could have considered with a less flexible program.  
Proposed Phase 2 Standards for Vocational Vehicles
The agencies have held dozens of meetings with manufacturers, suppliers, non-governmental organizations (NGOs), and other stakeholders to identify and understand the opportunities and challenges involved with regulating vocational vehicles.  These meetings have helped us to better understand the performance demands of the customers, the fuel-saving and GHG reducing technologies that are being investigated, as well as some challenges that are being encountered.  In addition, we updated our industry characterization to better understand the vocational vehicle manufacturing process, including the component suppliers and body builders.  We believe these information exchanges have enabled us to develop this proposal with an appropriate balance of reasonably achievable goals and a reasonably small risk of unintended consequences.
Proposed Subcategories and Test Cycles
The proposed Phase 2 vocational vehicle standards are based on the performance of a wider array of control technologies than the Phase 1 rules.  In particular, the agencies are proposing to recognize detailed characteristics of powertrains and drivelines in the proposed Phase 2 vocational vehicle standards. As described below, driveline improvements present a significant opportunity for reducing fuel consumption and CO2 emissions from vocational vehicles.  However, there is no single package of driveline technologies that would be equally suitable for the majority of vocational vehicles, because there is an extremely broad range of driveline configurations available in the market.  This is due in part to the variety in build processes, ranging from a purpose built custom chassis to a commercial chassis that may be intended as a multi-purpose stock vehicle.  Further, the wide range of applications and driving patterns of these vehicles leads manufacturers to offer a variety of drivelines, as each performs differently in use.  For example, depending on whether the transmission has an overdrive gear, drive axle ratios for Class 7 and 8 tractors can be found in the range of 2.5:1 to 4.1:1.  By contrast, across all types of vocational vehicles, drive axle ratios can be as low as 3.1:1 (delivery vehicle) and as high as 9.8:1 (transit bus).  Other components of the driveline also have a broader range of product in vocational vehicles than in tractors, including transmission gears, tire sizes, and engine speeds.  Each of these design features affects the GHG emission rate and fuel consumption of the vehicle.  It therefore is reasonable to define more than one baseline configuration of vocational vehicle, to encompass a range of drivelines and recognize that the agencies cannot use a one-size-fits-all approach.  A detailed list of the technologies the agencies project could be adopted to meet the proposed vocational vehicle standards is described in Section V.C, and in the draft RIA Chapter 2.  The agencies have determined that these technologies perform differently depending on the drivelines and driving patterns, further supporting the need to subcategorize this segment.
For these reasons, the agencies are proposing to create additional subcategories of vocational vehicles in Phase 2.  By creating additional subcategories we would essentially be setting separate baselines and separate numerical performance standards for different groups of vocational vehicle chassis over different test cycles.  This would enable the technologies that perform best at highway speeds and those that perform best in urban driving to each to be fully recognized over appropriate test cycles, while avoiding the unintended consequence of forcing vocational vehicles that are designed to serve in a wide variety of applications to be measured against a single baseline.  The attributes we believe could define these chassis groups are described below.
The agencies are proposing to split groups of chassis into subcategories based generally on vehicle use patterns in which the CO2 emissions and fuel consumption standards vary as a consequence.  Compliance with these standards would be demonstrated through test cycles reflecting these use patterns, to best assure that actual in-use benefits occur.  An ideal test cycle is one in which the performance improvements achieved by the adopted technologies are recognized over the cycle. As described in Section V.C and in the draft RIA Chapter 2.9, the agencies have found that most of the technologies considered do perform differently under different driving conditions.  For example, the effectiveness of lower tire rolling resistance is different depending on the degree of highway or transient driving, but the differences are very small compared to the difference in effectiveness for a hybrid drivetrain under different driving conditions.  The agencies have found that the measurable changes in performance of a majority of the technologies are significant enough to merit creation of different subcategories with different test cycles. 
Idle reduction technology is one type of technology that is particularly duty-cycle dependent. The composite test cycle for vocational vehicles in Phase 1 includes a 42 percent weighting on the ARB Transient test cycle, which comprises nearly 17 percent of idle time.  However, no single idle event in this test cycle is longer than 36 seconds, which may not be enough time to adequately recognize the benefits of some idle reduction technologies. For Phase 2, the agencies propose to recognize this important fuel saving technology by evaluating workday idle reduction technologies through a new idle-only cycle as described in the draft RIA Chapter 3.  
The agencies are proposing three different composite test cycles for vocational vehicles in Phase 2: Regional, Multi-Purpose, and Urban.  The agencies believe these three cycles balance the competing pressures to recognize the varying performance of technologies, serve the varying needs of customers, and maintain reasonable regulatory simplicity.  Table V-1 below presents the nine proposed subcategories of vocational vehicles: three weight class groupings, each with three composite duty cycles.  Each of these proposed composite duty cycles has a different weighting of the new idle cycle, the highway cruise cycles, and the ARB Transient cycle, as shown in Table V-2.  The CALSTART HD Truck Fuel Economy Task Group met in June 2013 to discuss vocational vehicle segmentation, and suggested an approach very similar to this.  The task group generally supported a limited number of duty cycles that would be sufficient to cover the basic applications while allowing new technology to demonstrate its worth.  They recognized that a few meaningful duty cycles could "bound" how vocational vehicles are generally used, while recognizing that this approach would not perfectly match how every vocational vehicle is actually used.  Their recommendations included three vocational vehicle duty-cycle-based subcategories: Urban, Regional, and Work Site.  A detailed discussion of the CALSTART recommendations, as well as reasoning why the agencies selected the proposed composite cycle weightings can be found in the draft RIA Chapter 2.  Continuing the averaging scheme from Phase 1, each manufacturer would be able to average within each vehicle weight class.  
Table V-1: Proposed Regulatory Subcategories for Vocational Vehicles
Weight Class
Light Heavy-Duty 
                                  Class 2b-5
                          Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
                                    Class 8
Duty Cycle
Regional
Regional
Regional

Multi-Purpose
Multi-Purpose
Multi-Purpose

Urban
Urban
Urban

Table V-2: Proposed Composite Test Cycle Weightings (in Percent) for Vocational Vehicles

                                 ARB Transient
                       55 mph Cruise with Road Grade[a]
                       65 mph Cruise with Road Grade[a]
                                     Idle
Regional
50
28
22
10
Multi-Purpose
82
15
3
15
Urban
94
6
0
20
Note:
a As described in Section III.E.2.b, the agencies are proposing to add road grade to the highway cruise test cycles.
The agencies are proposing criteria for determining the applicability of these subcategories.  This is not as straightforward an exercise as with tractors, where attributes such as cab type are obvious physical properties that indicate reasonably well how a vehicle is intended to be used.  The agencies have identified the final drive ratio of a vocational vehicle as a possible attribute that may indicate how the vehicle is intended to be used.  As described in Section V. E. (1) (d), we expect that most vocational chassis could be assigned to a duty cycle by estimating the percent of maximum engine test speed that is achieved over highway cruise cycles, by use of an equation that relates engine speed to vehicle speed.  To simplify this assignment process, the agencies propose that a vocational chassis would be presumed to certify using the Multi-Purpose duty cycle unless some criteria were met that indicated either the Regional or Urban cycle would be more appropriate.  Those criteria could include the objective calculation described in Section V.E., or a mix of physical attributes and knowledge of intended use.  The agencies are also proposing that chassis manufacturers would be able to request a different duty cycle.  
We understand that even within certain vocational vehicle types, vehicle use varies significantly.  By employing the agencies' recommended assignment process, it is our expectation that a delivery truck and a dump truck could both be certified over the same duty cycle while still yielding accurate technology effectiveness, if they had similar chassis and driveline characteristics.  Further, while intended service class may help a manufacturer decide how to classify some vehicles, we do not believe that intended service class would be a sufficient indicator by itself.  An example of this is the refuse service class.  A neighborhood collection refuse truck would not need to be assigned to the same subcategory as a roll-off refuse straight/dump truck that makes daily highway trips to a landfill.
The agencies request comment on the method for assigning vocational chassis to regulatory subcategories. We believe the proposed approach is aligned with the objective to allow manufacturers to certify their chassis over appropriate duty cycles, while maintaining the ability of the market to offer a variety of products to meet customer demand. 
Alternative Approach to Subcategorization
The U.S. Department of Energy and EPA are partnering to support a project aimed at evaluating, refining and/or developing duty cycles for tractors and vocational vehicles to be used in the certification of heavy-duty vehicles to GHG emission standards.  This project is underway at the National Renewable Energy Laboratory (NREL) and includes a task to develop alternative subcategorization options for vocational vehicles, along with new drive cycles and/or cycle composite weightings. NREL is continuing to collate available vehicle activity data and vehicle characteristics, and the public is invited to submit information to the docket in support of this work to identify possible alternative GEM test cycles and segmentation options for vocational vehicles.  Preliminary work under this project indicates that two or three test cycles may adequately represent most vocational vehicles.  Preliminary work also indicates that in-use drive cycles may include more idle operation for all types of vocational vehicles than is represented by the currently proposed GEM test cycles.  Depending on comments and additional information received during the comment period, it may be within the agencies' discretion to adopt one or more alternative vocational vehicle test cycles, or re-weight the current test cycles, to better represent real world driving and better reflect performance of the technology packages.    
Proposed GHG and Fuel Consumption Standards for Vocational Vehicles
EPA is proposing CO2 standards and NHTSA is proposing fuel consumption standards for manufacturers of chassis for new vocational vehicles.  As described in Sections II.C.1 and II.D.1 above, the agencies are proposing test procedures so that engine performance would be evaluated within the GEM simulation tool.  These test procedures include corrections for the test fuel, enabling vocational vehicles to be certified with many different types of CI and SI engines. In addition, EPA is proposing to establish HFC leakage standards for air conditioning systems in vocational vehicles, as described below and in the draft RIA Chapters 2 and 5.
This section describes the standards and implementation dates that the agencies are proposing for the nine subcategories of vocational vehicles.  The agencies have performed a technology analysis to determine the level of standards that we believe would be available at reasonable cost, and would be cost-effective, technically feasible, and appropriate in the lead time provided.  More details of this analysis are described in the draft RIA Chapter 2. This analysis considered the following for each of the proposed regulatory subcategories:
the level of technology that is incorporated in current new vehicles, 
forecasts of manufacturers' product redesign schedules,
the available data on CO2 emissions and fuel consumption for these vehicles, 
technologies that would reduce CO2 emissions and fuel consumption and that are judged to be feasible and appropriate for these vehicles through the 2027 model year, 
the effectiveness and cost of these technologies, 
a projection of the technologically feasible application rates of these technologies, in this time frame, and
projections of future U.S. sales for different types of vehicles and engines. 

The proposal described here and throughout the rulemaking documents is the preferred alternative, referred to as Alternative 3 in Section X and the draft RIA Chapter 11.  However, the agencies are seriously considering another alternative for all segments, including vocational vehicles, referred to as Alternative 4.  The agencies believe that Alternative 4 has the potential to be the maximum feasible and reasonable alternative.  However, based on the evidence currently before the agencies, EPA and NHTSA have outstanding questions regarding relative risks and benefits of Alternative 4 due to the time frame envisioned by that alternative.   Alternative 4 is predicated on the same general market adoption rates of the same technologies as the proposal, but would provide three years less lead time than the proposal.  Details of Alternative 4 are presented in Section V.D, Section X, and in the draft RIA Chapter 11.  
The agencies seek comment on the feasibility of Alternative 4 for vocational vehicles, including empirical data on its appropriateness, cost-effectiveness, and technological feasibility.  It would be helpful if comments addressed these issues separately for each type of technology.  
Additional information and feedback could further inform our assumptions and, by extension, our analysis of feasibility.  The agencies believe it is possible that it could be within the agencies' discretion to determine in the final rules that Alternative 4 could be maximum feasible and appropriate under CAA section 202 (a)(1) and (2).  If the agencies receive relevant information supporting the feasibility of Alternative 4, or regarding technology pathways different than those in Alternatives 3 and 4, the agencies may consider establishing final fuel consumption and GHG emissions standards at levels that provide more overall reductions than what we are proposing if we deem them to be maximum feasible and reasonable for NHTSA and EPA, respectively.
    Proposed Fuel Consumption and CO2 Standards
The agencies are proposing standards that would phase in over a period of seven years, beginning in the 2021 model year, consistent with the requirement in EISA that NHTSA's standards provide four full model years of regulatory lead time and three full model years of regulatory stability, and provide sufficient time "to permit the development and application of the requisite technology" for purposes of CAA section 202 (a)(2).  The proposed Phase 2 program would progress in three-year stages with an intermediate set of standards in MY 2024 and would continue to reduce fuel consumption and CO2 emissions well beyond the full implementation year of MY 2027.  The agencies have identified a technology path for each of these levels of improvement, as described below. 
Combining engine and vehicle technologies, vocational vehicles powered by CI engines would be projected to achieve improvements of 16 percent in MY 2027 over the MY 2017 baseline, as described below and in the draft RIA Chapter 2.  The agencies project up to 13 percent improvement in fuel consumption and CO2 emissions in MY 2027 from SI-powered vocational vehicles, as shown in Table V-3.  The incremental Phase 2 vocational vehicle standards would ensure steady progress toward the MY2027 standards, with improvements in MY 2021 of up to seven percent and improvements in MY 2024 of up to 11 percent over the MY 2017 baseline vehicles, as shown in Table V-3. 
 The agencies' analyses, as discussed in this preamble and in the draft RIA Chapter 2, show that the proposed standards would be appropriate under each agency's respective statutory authority. 
Table V-3: Projected Vocational Vehicle CO2 and Fuel Use Reductions (in Percent) from 2017 Baseline
Model Year
 Engine Type
Heavy Heavy-Duty Class 8
Medium Heavy-Duty Class 6-7
Light Heavy-Duty Class 2b-5
2021
CI Engine
7
7
6

SI Engine
5
5
4
2024
CI Engine
11
11
10

SI Engine
7
7
7
2027
CI Engine
16
16
16

SI Engine
12
13
12

Based on our analysis and research, the agencies believe that the improvements in vocational vehicle fuel consumption and CO2 emissions can be achieved through deployment and utilization of a greater set of technologies than formed the technology basis for the Phase 1 standards.  In developing the proposed standards, the agencies have evaluated the current levels of fuel consumption and emissions, the kinds of technologies that could be utilized by manufacturers to reduce fuel consumption and emissions, the associated lead time, the associated costs for the industry, fuel savings for the owner/operator, and the magnitude of the CO2 reductions and fuel savings that may be achieved.  After examining the possibilities of vehicle improvements, the agencies are basing the proposed standards on the performance of workday idle reduction technologies, improved transmissions including hybrid powertrains, axle technologies, weight reduction, and further tire rolling resistance improvements.  The EPA-only air conditioning standard is based on leakage improvements.
The agencies' evaluation indicates that some of the above vehicle technologies are commercially available today, though often in limited volumes.  Other technologies would need additional time for development.  Those that we believe are available today and may be adopted to a limited extent in some vehicles include improved tire rolling resistance, weight reduction, some types of conventional transmission improvements, neutral idle, and air conditioning leakage improvements.  However, EPA is not proposing standards predicated on performance of these technologies until MY 2021.  The agencies consider any potential benefits that could be achieved by implementing rules requiring some technologies on vocational vehicles earlier than MY 2021 to be outweighed by several disadvantages.  For one, manufacturers would need lead time to develop compliance tracking tools.  Also, if the Phase 2 vocational vehicle standards began in a different year than the tractor standards, this could create unnecessary added complexity, and could strongly detract from the fuel savings and GHG emission reductions that could otherwise be achieved.  Therefore we anticipate that the Phase 1 standards will continue to apply in model years 2018 to 2020.
Vehicle technologies that we believe will become available in the near term include improved axle lubrication and 6x2 axles.  Vehicle technologies that we understand would benefit from even more development time include stop-start idle reduction and hybrid powertrains.  The agencies have analyzed the technical feasibility of achieving the fuel consumption and CO2 standards, based on projections of what actions manufacturers would be expected to take to reduce fuel consumption and emissions to achieve the standards, and believe that the standards would be technologically feasible throughout the regulatory useful life of the program.  EPA and NHTSA estimated vehicle package costs are found in Section V. C. (2) .
Table V-4 and Table V-5 present EPA's proposed CO2 standards and NHTSA's proposed fuel consumption standards, respectively, for chassis manufacturers of Class 2b through Class 8 vocational vehicles for the beginning model year of the program, MY 2021.  As in Phase 1, the standards would be in the form of the mass of emissions, or gallons of fuel, associated with carrying a ton of cargo over a fixed distance.  The EPA standards would be measured in units of grams CO2 per ton-mile and the NHTSA standards would be in gallons of fuel per 1,000 ton-miles. With the mass of freight in the denominator of this term, the program is designed to measure improved efficiency in terms of freight efficiency. As in Phase 1, the Phase 2 program would assign a fixed default payload in GEM for each vehicle weight class group (heavy heavy-duty, medium heavy-duty, and light heavy-duty).  Even though this simplification does not allow individual vehicle freight efficiencies to be recognized, the general capacity for larger vehicles to carry more payload is represented in the numerical values of the proposed standards for each weight class group.
EPA's proposed vocational vehicle CO2 standards and NHTSA's proposed fuel consumption standards for the MY 2024 stage of the program are presented in Table V-6 and Table V-7, respectively.  These reflect broader adoption rates of vehicle technologies already considered in the technology basis for the MY 2021 standards.  The standards for vehicles powered by CI engines also reflect that in MY 2024, the separate engine standard would be more stringent, so the vehicle standard keeps pace with the engine standard.   
EPA's proposed vocational vehicle CO2 standards and NHTSA's proposed fuel consumption standards for the full implementation year of MY 2027 are presented in Table V-8 and Table V-9, respectively.  These reflect even greater adoption rates of the same vehicle technologies considered in the basis for the previous stages of the Phase 2 standards.   The proposed MY 2027 standards for vocational vehicles powered by CI engines reflect additional engine technologies consistent with those on which the separate proposed MY 2027 CI engine standard is based.  The proposed MY 2027 standards for vocational vehicles powered by SI engines reflect improvements due to additional engine friction reduction technology, which is not among the technologies on which the separate SI engine standard is based.
The proposed standards are based on highway cruise cycles that include road grade, to better reflect real world driving and to help recognize engine and driveline technologies.  See Section III.E.  The agencies have evaluated some alternate road grade profiles, including several recommended by NREL and two developed independently by the agencies, and have prepared possible alternative vocational vehicle standards based on these profiles.  The agencies request comment on this analysis, which is available in a memorandum to the docket.
  As described in Section I, the agencies are proposing to continue the Phase 1 approach to averaging, banking and trading (ABT), allowing ABT within vehicle weight classes.  For Phase 2, continuing this approach means allowing averaging between CI-powered vehicles and SI-powered vehicles that belong to the same weight class group and have the same regulatory useful life.
Table V-4: Proposed EPA CO2 Standards for MY2021 Class 2b-8 Vocational Vehicles 
EPA Standard for Vehicle with CI Engine Effective MY2021 (gram CO2/ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
296
188
198
Multi-Purpose
305
190
200
Regional
318
186
189
EPA Standard for Vehicle with SI Engine Effective MY2021 (gram CO2/ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
320
203
214
Multi-Purpose
329
205
216
Regional
343
201
204

Table V-5: Proposed NHTSA Fuel Consumption Standards for MY2021 Class 2b-8 Vocational Vehicles 
NHTSA Standard for Vehicle with CI Engine Effective MY 2021 (Fuel Consumption gallon per 1,000 ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
29.0766
18.4676
19.4499
Multi-Purpose
29.9607
18.6640
19.6464
Regional
31.2377
18.2711
18.5658
NHTSA Standard for Vehicle with SI Engine Effective MY 2021 (Fuel Consumption gallon per 1,000 ton-mile) 
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
36.0077
22.8424
24.0801
Multi-Purpose
37.0204
23.0674
24.3052
Regional
38.5957
22.6173
22.9549
Table V-6: Proposed EPA CO2 Standards for MY2024 Class 2b-8 Vocational Vehicles
EPA Standard for Vehicle with CI Engine Effective MY2024 (gram CO2/ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
284
179
190
Multi-Purpose
292
181
192
Regional
304
178
182
EPA Standard for Vehicle with SI Engine Effective MY2024 (gram CO2/ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
312
197
208
Multi-Purpose
321
199
210
Regional
334
196
199

Table V-7: Proposed NHTSA Fuel Consumption Standards for MY2024 Class 2b-8 Vocational Vehicles
NHTSA Standard for Vehicle with CI Engine Effective MY 2024 (Fuel Consumption gallon per 1,000 ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
27.8978
17.5835
18.6640
Multi-Purpose
28.6837
17.7800
18.8605
Regional
29.8625
17.4853
17.8782
NHTSA Standard for Vehicle with SI Engine Effective MY 2024 (Fuel Consumption gallon per 1,000 ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
35.1075
22.1672
23.4050
Multi-Purpose
36.1202
22.3923
23.6300
Regional
37.5830
22.0547
22.3923

Table V-8: Proposed EPA CO2 Standards for MY2027 Class 2b-8 Vocational Vehicles
EPA Standard for Vehicle with CI Engine Effective MY2027 (gram CO2/ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
272
172
182
Multi-Purpose
280
174
183
Regional
292
170
174
EPA Standard for Vehicle with SI Engine Effective MY2027 (gram CO2/ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
299
189
196
Multi-Purpose
308
191
198
Regional
321
187
188

Table V-9: Proposed NHTSA Fuel Consumption Standards for MY2027 Class 2b-8 Vocational Vehicles
NHTSA Standard for Vehicle with CI Engine Effective MY 2027 (Fuel Consumption gallon per 1,000 ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
26.7191
16.8959
17.8782
Multi-Purpose
27.5049
17.0923
17.9764
Regional
28.6837
16.6994
17.0923
NHTSA Standard for Vehicle with SI Engine Effective MY 2027 (Fuel Consumption gallon per 1,000 ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
33.6446
21.2670
22.0547
Multi-Purpose
34.6574
21.4921
22.2797
Regional
36.1202
21.0420
21.1545
As with the other regulatory categories of heavy-duty vehicles, NHTSA and EPA are proposing standards that apply to Class 2b-8 vocational vehicles at the time of production, and EPA is proposing standards for a specified period of time in use (e.g., throughout the regulatory useful life of the vehicle).  The derivation of the standards for these vehicles, as well as details about the proposed provisions for certification and implementation of these standards, are discussed in more detail later in this notice and in the draft RIA.
    Proposed HFC Leakage Standards
The Phase 1 GHG standards do not include standards to control direct HFC emissions from air conditioning systems on vocational vehicles.  EPA deferred such standards due to "the complexity in the build process and the potential for different entities besides the chassis manufacturer to be involved in the air conditioning system production and installation".  76 FR 57194/3.  During our stakeholder outreach conducted for Phase 2, we learned that the majority of vocational vehicles are sold as cab-completes with the dashboard-mounted air conditioning systems installed by the chassis manufacturer.  For those vehicles that have A/C systems installed by a second stage manufacturer, EPA is proposing revisions to our regulations that would resolve the issues identified in Phase 1, in what we believe is a practical and feasible manner, as described below in Section V.E. 
For the above reasons, in Phase 2, EPA now believes that it is reasonable to propose A/C refrigerant leakage standards for Class 2b-8 vocational vehicles, beginning with the 2021 model year.  Chassis sold as cab-completes typically have air conditioning systems installed by the chassis manufacturer.  For these configurations, the process for certifying that low leakage components are used would follow the system in place currently for comparable systems in tractors.  In the case where a chassis manufacturer would rely on a second stage manufacturer to install a compliant air conditioning system, the chassis manufacturer must follow the proposed delegated assembly provisions described below in Section V.E.
Proposed Exemptions and Exclusions
    Proposed Standards for Emergency Vehicles 
Emergency vehicles are covered by the Phase 1 program at the same level of stringency as any other vocational vehicle.  In discussions with representatives of the Fire Apparatus Manufacturers Association, the agencies have learned that chassis manufacturers of fire apparatus are currently able to obtain compliant engines and tires with the coefficient of rolling resistance allowing compliance with the Phase 1 standards. The agencies are proposing in Phase 2 to allow emergency vehicles to meet less stringent standards than other vocational vehicles.  There are two reasons for doing so.  First, as the level of complexity of Phase 2 would increase with the need for additional technologies aimed to improve driveline efficiency, the compliance burden would be disproportionately high for a company that manufactures small volumes of specialized chassis. The ability of such a company to benefit from averaging would be limited, as would be the ability to spread compliance costs across many vehicles. The second and more important reason is that emergency vehicles, which are necessarily built for high levels of performance and reliability, would likely sacrifice some levels of function to attain the proposed Phase 2 standards.  For example, vehicles with large engines, high-torque powertrains, and tires designed with deep tread would likely be deficit-producing vehicles if manufacturers needed to certify an emergency vehicle family to the primary proposed standards.
In the MY 2017-2025 light-duty rule, the agencies adopted an exclusion for emergency and police vehicles from GHG and fuel economy standards.  As described in that rule, the unique features of purpose-built emergency vehicles, such as high rolling resistance tires, reinforced suspensions, and special calibrations of engines and transmissions, have the effect of raising their GHG emissions.  The agencies determined in that rule that an exemption was appropriate because the technical feasibility issues for emergency vehicles went beyond those of other high-performance vehicles, and vehicles with these performance characteristics must continue to be made available in the market.  The agencies do not believe that non-emergency vocational vehicles are designed for the severe duty cycles that are experienced by emergency vehicles, and therefore do not face the same potential constraints in terms of vehicle design and the application of technology.
In conducting an independent technical feasibility assessment for heavy-duty emergency vehicles, the agencies believe that some GHG and fuel saving technologies could reasonably be applied without compromising vehicle utility.  However, these vehicles are designed, built, and operated so differently than other vocational vehicles that we believe keeping them in the same averaging sets as other vocational vehicles in Phase 2 would not be appropriate and thus a separate standard (evaluated from a baseline specific to these vehicles) is warranted.    
Our feasibility analysis and the available tire data indicate that emergency vehicle manufacturers can reasonably continue to apply tires with the Phase 1 level tire CRR performance, in the Phase 2 program.  We have also learned that a variety of vehicle-level technologies are being developed specifically for emergency vehicles, to maintain on-board electronics without excessive idling.  Modern fire apparatus and ambulances typically have multiple computers and other electronic devices on-board, each of which requires power and continues to draw electricity when the vehicle is parked and the crew is responding to an emergency, which could take several hours.  Most on-board batteries and alternators are not capable of sustaining these power demands for any length of time, so emergency vehicles must either operate in a high-idle mode or adopt one of several possible technologies that can assist with electrical load management.  Some of these technologies can enable an emergency vehicle to shut down the main engine and drastically reduce idle emissions.  NHTSA and EPA have not based the proposed emergency vehicle standards on use of idle reduction technologies because we do not believe the regular neutral idle and stop-start technologies we project for other vocational vehicles could apply equally to emergency vehicles, and we do not have enough information about this subset of idle reduction technologies that is designed for extended electrical load management to either estimate an effectiveness value or determine an appropriate market adoption rate.  The agencies request comment on whether we should include any market adoption rate of idle reduction technologies for emergency vehicles, as part of the basis for the Phase 2 emergency vocational vehicle standard.
To address both the technical feasibility and the compliance burden, the agencies are proposing less stringent standards that also have a simplified compliance method.  Because the potential trade-offs between performance and fuel efficiency apply equally to any emergency vehicle manufacturer, the agencies propose that these less stringent standards would apply for commercial chassis manufacturers of emergency vehicles, as well as for custom chassis manufacturers.  The standard for vehicles identified at the time of certification as being intended for emergency service would be predicated solely on the continued use of lower rolling resistance tires, at the Phase 2 baseline level (i.e. compliant with Phase 1).  
With respect to standards for engines used in these emergency vehicles, based on what we have learned from discussions with engine manufacturers, we understand that engines designed for heavy-duty emergency vehicles are generally higher-emitting than other engines. However, if we maintain a separate engine standard and regulatory flexibility such as ABT, fire apparatus manufacturers would be able to obtain engines that, on average, meet the proposed Phase 2 engine standards.  The agencies further recognize that the proposed engine map inputs to GEM in the primary program would pose a difficulty for emergency vehicle manufacturers.  If we required engine-specific inputs then these manufacturers would have to apply extra vehicle technologies to compensate for the necessary but higher-emitting engine.  The agencies are therefore not proposing to recognize engine performance as part of the vehicle standard for emergency vehicles.  Manufacturers of these vehicles would be expected to install an engine that is certified to the applicable separate Phase 2 engine standard.  However, under the simplified compliance method we are proposing, emergency vehicle manufacturers would not follow the otherwise applicable Phase 2 proposed approach of entering an engine map in GEM.  Instead a Phase 1 style GEM interface would be made available, where an EPA default engine specified by rule would be simulated in GEM. 
This approach is consistent with the approach recommended by the Small Business Advocacy Review Panel, which believed it would be feasible for small emergency vehicle manufacturers to install a Phase 2-compliant engine, but recommended a simplified certification approach to reduce the number of required GEM inputs.  Consistent with the recommendations of this panel, the agencies are asking for comments on whether there would be enough fuel consumption and CO2 emissions benefits achieved by use of LRR tires in emergency vehicles to justify requiring small business emergency chassis manufacturers to adopt them. 
We expect some commercial chassis manufacturers that serve the emergency vehicle market may have the ability to meet the proposed Phase 2 standards of our primary program when including emergency vehicles in their averaging sets.  Even so, we are proposing that they have the option to comply with the less stringent standards, because there are fewer opportunities to improve fuel efficiency on emergency vehicles, which (as noted) are designed for high levels of performance and severe duty.  The agencies expect that this compliance path would be most needed by custom chassis manufacturers who serve the emergency vehicle market.  Custom chassis manufacturers typically offer a narrow range of products with low sales volumes. Therefore, fleet averaging would provide a lower level of compliance flexibility, and there would be less opportunity to spread the costs of developing advanced technologies across a large number of vehicles.  Further, many custom chassis manufacturers do not qualify as small entities under the SBA regulations.  Thus, the agencies believe that existence of program-wide ABT does not vitiate the need to propose alternative, less stringent standards for emergency vehicles. 
Table V-10 below presents the proposed numerical standards to which an emergency vehicle chassis would be certified under this provision.  Emergency vehicles certified to these proposed emergency vehicle standards would be ineligible to generate credits.  The proposed standards shown below were derived by building a model of three baseline vehicles (LHD, MHD, HHD) using attributes similar to those developed for the primary program as assigned to the Urban drive cycle subcategories.  By modeling a 2021-compliant engine and tires with CRR of 7.7, the MY 2021 standards were derived using GEM.  Details of these configurations are provided in the draft RIA Chapter 2.
Table V-10: Proposed Standards for Class 2b-8 Emergency Vehicles for MY 2021 and Later 
Proposed EPA Emergency Vehicle Standard (gram CO2/ton-mile)
Implementation Year
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
MY2021 
312
195
215
Proposed NHTSA Emergency Vehicle Standard (Fuel Consumption gallon per 1,000 ton-mile)
Implementation Year
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
MY2021 
30.6483
19.1552
21.1198
The agencies have estimated the costs of vocational vehicle technology packages, as presented below in Table V-20 to Table V-22.  The technologies on which the proposed emergency vehicle standards are based include engines, LRR tires, and leak-tight air conditioning systems.  Using the estimated costs of those technologies as presented, the agencies estimate that the average cost for a heavy heavy-duty or medium-heavy-duty emergency vehicle to meet the proposed emergency vehicle standards would be approximately $463 in MY 2027, and the average cost for a light heavy-duty emergency vehicle would be approximately $497 in MY 2027.  To derive these estimates, the agencies have combined the $7 cost of LRR tires that is presented in Table V-20 with the engine and air conditioning costs presented in Table V-22.  The agencies are not aware of any emergency vehicle manufacturer that produces engines, thus most of these costs would be borne by engine manufacturers.  While some of the added engine costs may be passed on to emergency vehicle manufacturers and vehicle owners/operators, the overall costs of these technologies are on the order of the Phase 1 vocational vehicle program costs, which are highly cost-effective.
To ensure that only emergency vehicle chassis would be able to certify to these less stringent standards, the agencies propose that manufacturers identify vehicles using the definition at 40 CFR 86.1803-01, which for Phase 2 purposes would be an ambulance or a fire truck. Manufacturers have informed us that it is feasible to identify such vehicles using sales codes or the presence of specialty attributes.  The agencies request comment on the merits and drawbacks of aligning the definition of emergency vehicle for purposes of the Phase 2 program with the definition of emergency vehicle for purposes of the light-duty GHG provisions under 40 CFR 86.1818, which includes additional vehicles such as those used by law enforcement.
According to the International Council on Clean Transportation (ICCT), less than one percent of all new heavy-duty truck registrations from 2003 to 2007 were emergency vehicles. On average, the ICCT's data suggest that approximately 5,700 new emergency vehicles are sold in the U.S. each year; about 0.8 percent of the 3.4 million new heavy-duty trucks registered between 2003 and 2007.  According to the Fire Apparatus Manufacturers Association, the annual VMT of the newest emergency vehicles ranges from approximately 2,000 to 8,000 miles, as documented in their 2004 Fire Apparatus Duty Cycle White Paper.  Because there are relatively few of these vehicles and they travel a relatively small number of miles, the agencies believe that setting less stringent GHG and fuel consumptions standards for these vehicles would not detract from the greater benefits of this rulemaking, and such separate standards are warranted in any case.
    Possible Standards for Other Custom Chassis Manufacturers
The agencies request comment on extending the above simplified compliance procedure and less stringent Phase 2 standards to other custom chassis manufacturers  -  those who offer such a narrow range of products that averaging is not of practical value as a compliance flexibility, and for whom there are not large sales volumes over which to distribute technology development costs. Custom chassis manufacturers that are not small businesses must comply with the Phase 1 standards and are generally doing so, by installing tires with the required coefficient of rolling resistance.  We are aware of a handful of U.S. chassis manufacturers serving the recreational vehicle and bus markets who we believe would have a disproportionate compliance burden, should we require compliance with the primary proposed Phase 2 standards. 
According to the MOVES model forecast, there will be approximately 1,000 commercial intercity coach buses, 5,000 transit buses, 40,000 school buses, and 90,000 recreational vehicles manufactured new for MY 2018.  In each of these markets, specialty chassis manufacturers compete with large vertically integrated manufacturers. We request comment on the merits of offering less stringent standards to small volume chassis manufacturers, and seek comment as well as to other factors the agencies should consider to ensure this approach would not have unintended consequences for businesses competing in the vocational vehicle market.
If the agencies were to adopt less stringent standards for custom non-emergency chassis manufacturers, we would expect to limit this by setting a maximum number of eligible vocational chassis annually for each such manufacturer.  The agencies request comment on an appropriate sales volume to qualify for these possible standards, and also request comment as to whether the sales volume thresholds should be different for different markets. We further request comment on whether it would adversely affect business competitiveness if custom chassis manufacturers were held to a different standard than commercial chassis manufacturers, and whether the agencies should consider allowing commercial chassis manufacturers competing in these markets to sell a limited number of chassis certified to a less stringent standard. 
As an alternative approach, the agencies request comment on providing custom chassis manufacturers with additional lead time to comply.  For example, we could offer such manufacturers an additional one or two years to meet each level of the primary proposed vocational vehicle standards.  
If the agencies pursued the approach of less stringent standards, we would offer a simplified compliance procedure similar to the one proposed for emergency vehicles.  Custom chassis manufacturers would not follow the otherwise applicable Phase 2 proposed approach of entering an engine map in GEM.  Instead, a Phase 1 style GEM interface would be made available, where an EPA default engine specified by rule would be simulated in GEM.  The vehicle-level standard would be predicated on a simpler set of technologies than the primary proposed Phase 2 standard, most likely lower rolling resistance tires and idle reduction.  Because these would not be emergency vehicles, we believe the performance of these vehicles would not be compromised by requiring improvement in tire CRR beyond that of the Phase 1 level. The agencies request comment on whether we should develop separate standards for different vehicle types such as recreational vehicles and buses. 
The Small Business Advocacy Review Panel recommended that EPA seek comment on how to design a small business vocational vehicle exemption by means of a custom chassis volume exemption and what sales volume would be an appropriate threshold.  The agencies seek comments on all aspects of an approach for custom vocational vehicle chassis manufacturers that would enable us to adopt a final Phase 2 program that would be consistent with the recommendations of the panel.
    Off-Road and Low-Speed Vocational Vehicle Exemptions
The agencies are proposing to continue the exemptions in Phase 1 for off-road and low-speed vocational vehicles, with revision. See generally 76 FR 57175.  These provisions currently apply for vehicles that are defined as "motor vehicles" per 40 CFR 85.1703, but may conduct most of their operations off-road, such as drill rigs, mobile cranes and yard hostlers.  Vehicles qualifying under these provisions must be built with engines certified to meet the applicable engine standard, but need not comply with a vehicle-level GHG or fuel consumption standard.  In Phase 1, this typically means not needing to install tires with a lower coefficient of rolling resistance.  Because manufacturers choosing to exempt vehicles (but not engines) based on the criteria for heavy-duty off road vehicles at 40 CFR §1037.631 and 49 CFR §523.2 will for the first time provide a description to the agencies of how they meet the qualifications for this exemption in their end-of-the year reports in the spring of 2015, we do not have information beyond what we knew at the time of the Phase 1 rules regarding how broadly this provision is being used.  Nonetheless, we are proposing to discontinue the criterion for exemption based solely on use of tires with maximum speed rating at or below 55 mph.  The agencies are concerned that tires are so easily replaced that this would be an unreliable way to identify vehicles that truly need special consideration.  We are proposing to retain the qualifying criteria related to design and use of the vehicle.  We invite comments on the proposed revisions to the qualifying criteria in the regulations, including whether the rated speed of the tires should be retained, and whether vehicles intended to be covered by this provision have characteristics that are captured by the proposed criteria.
Feasibility of the Proposed Vocational Vehicle Standards
This section describes the agencies' technical feasibility and cost analysis in greater detail.  Further detail on all of these technologies can be found in the draft RIA Chapter 2.4 and Chapter 2.9.  The variation in the design and use of vocational vehicles has led the agencies to project different technology solutions for each regulatory subcategory.  Manufacturers may also find additional means to reduce emissions and lower fuel consumption than the technologies identified by the agencies, and of course may adopt any compliance path they deem most advantageous.  The focus of this section is on the feasibility of the proposed standards for non-emergency vocational vehicles.  Further, the agencies project that these technology packages would also be feasible for vocational tractors.  With typical driving patterns having limited operation at highway speeds, vocational tractors would appropriately be classified as vocational vehicles, with proposed standards that would not be predicated on the performance of aerodynamic devices.  The agencies propose to allow vocational tractors to follow the same subcategory assignment process as other vocational vehicles.  For example, a beverage tractor intended for local delivery routes may have a driving pattern that is reasonably represented by the proposed Urban test cycle.  The agencies request comment on whether vocational tractors would be deficit-generating vehicles if certified as vocational vehicles, where performance would be measured against the proposed vocational vehicle baseline configurations.  For example, if a tractor were designed with a higher power engine to carry a heavier payload than presumed in the GEM baseline for that subcategory, would GEM return a value that poorly represents the real world performance of that vehicle, and if so, would that merit a different certification approach for vocational tractors?
NHTSA and EPA collected information on the cost and effectiveness of fuel consumption and CO2 emission reducing technologies from several sources.  The primary sources of information were the Southwest Research Institute evaluation of heavy-duty vehicle fuel efficiency and costs for NHTSA,  the 2010 National Academy of Sciences report of Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles, TIAX's assessment of technologies to support the NAS panel report,  the technology cost analysis conducted by ICF for EPA, and the 2009 report from Argonne National Laboratory on Evaluation of Fuel Consumption Potential of Medium and Heavy Duty Vehicles through Modeling and Simulation.    
What Technologies Are the Agencies Considering to Reduce the CO2 Emissions and Fuel Consumption of vocational vehicles?
In assessing the feasibility of the proposed Phase 2 vocational vehicle standards, the agencies evaluated a suite of technologies, including workday idle reduction, improved tire rolling resistance, improved transmissions, improved axles, and weight reduction, as well as their impact on reducing fuel consumption and GHG emissions.  The agencies also evaluated aerodynamic technologies and full electric vehicles. 
As discussed above, vocational vehicles may be powered by either SI or CI engines. The technologies and feasibility of the proposed engine standards are discussed in Section II.  At the vehicle level, the agencies have considered the same suite of technologies and have applied the same reasoning for including or rejecting these vehicle-level technologies as part of the basis for the proposed standards, regardless of whether the vehicle is powered by a CI or SI engine. With the exception of the MY 2027 proposed standards, the analysis below does not distinguish between vehicles with different types of engines.  The resulting proposed vehicle standards do reflect the differences arising from the performance of different types of engines over the GEM cycles.
    Vehicle Technologies Considered in Standard-Setting
 The agencies note that the effectiveness values estimated for the technologies may represent average values, and do not reflect the potentially-limitless combination of possible values that could result from adding the technology to different vehicles.  For example, while the agencies have estimated an effectiveness of 0.5 percent for low friction axle lubricants, each vehicle could have a unique effectiveness estimate depending on the baseline axle's oil viscosity rating.  For purposes of this proposed rulemaking, NHTSA and EPA believe that employing average values for technology effectiveness estimates is an appropriate way of recognizing the potential variation in the specific benefits that individual manufacturers (and individual vehicles) might obtain from adding a given technology. There may be real world effectiveness that exceeds or falls short of the average, but on-balance the agencies believe this is the most practicable approach for determining the wide ranging effectiveness of technologies in the diverse vocational vehicle arena.    
Transmissions
Transmission improvements present a significant opportunity for reducing fuel consumption and CO2 emissions from vocational vehicles.  Transmission efficiency is important for many vocational vehicles as their duty cycles involve high percentages of driving under transient operation.  The three categories of transmission improvements the agencies considered for Phase 2 are driveline optimization, architectural improvements, and hybrid powertrain systems.
The agencies believe an effective way to derive efficiency improvements from a transmission is by optimizing it with the engine and other driveline components to balance both performance needs and fuel savings.  However, many vocational vehicles today are not operating with such optimized systems.  Because customers are able to specify their preferred components in a highly customized build process, many vocational vehicles are assembled with components that were designed more for compatibility than for optimization.  To some extent, vertically integrated manufacturers are able to optimize their drivelines.  However, this is not widespread in the vocational vehicle sector, resulting primarily, from the multi-stage manufacture process.  The agencies project transmission and driveline optimization will yield a substantial proportion of vocational vehicle fuel efficiency and GHG emissions reduction improvements for Phase 2.  On average, we anticipate that efficiency improvements of about five percent can be achieved from optimization, or deep integration of drivelines.  However, we are not assigning a fixed level of improvement; rather we have developed a test procedure, the powertrain test, for manufacturers to use to obtain improvement factors representative of their systems. See Section V.E and the draft RIA Chapter 3 for a discussion of this proposed test procedure.  Depending on the test cycle and level of integration, the agencies believe improvement factors greater than ten percent above the baseline vehicle performance could be achieved.  To obtain such benefits across more of the vocational vehicle fleet, the agencies believe there is opportunity for manufacturers to form strategic partnerships and explore commercial pathways to deeper driveline integration.  For example, one partnership of an engine manufacturer and a transmission manufacturer has led to development of driveline components that deliver improved fuel efficiency based on optimization that could not be realized without sharing of critical data. 
The agencies project other related transmission technologies would be recognized over the powertrain test along with driveline optimization. These include improved mechanical gear efficiency, more sophisticated shift strategies, more aggressive torque converter lockups, transmission friction reduction, and reduced parasitic losses, as described in the 2009 TIAX report at 4.5.2.  Each of these attributes would be simulated in GEM using default values, unless the powertrain test were employed.  The draft RIA Chapter 4 explains each parameter that would be set as a fixed value in GEM.  The expected benefits of improved gear efficiency, shift logic, and torque converter lockup are included in the total projected effectiveness of optimized conventional transmissions using the powertrain test.
Transmission efficiency could also be improved in the time frame of the proposed rules by changes in the architecture of conventional transmissions.  Most vocational vehicles currently use torque converter automatic transmissions (AT), especially in Classes 2b-6.  According to the 2009 TIAX report, approximately 70 percent of Class 3-6 box and bucket trucks use AT, and all refuse trucks, urban buses, and motor coaches use AT. Automatic transmissions offer acceleration benefits over drive cycles with frequent stops, which can enhance productivity.  However, with the diversity of vocational vehicles and drive cycles, other kinds of transmission architectures can meet customer needs, including automated manual transmissions (AMT) and even some manual transmissions (MT).  
One type of architectural improvement the agencies project will be developed by manufacturers of all transmission architectures is increased number of gears. The benefit of adding more gears varies depending on whether the gears are added in the range where most operation occurs.  The TIAX 2009 report projected that 8-speed transmissions could incrementally reduce fuel consumption by 2 to 3 percent over a 6-speed automatic transmission, for Class 3-6 box and bucket trucks, refuse haulers, and transit buses.  Although the agencies estimate the improvement could on average be about two percent for the adding of two gears in the range where significant vehicle operation occurs, we are not assigning a fixed improvement based solely on number of transmission gears.  Manufacturers would enter the number of gears and gear ratios into GEM and the model would simulate the efficiency benefit over the applicable test cycle.  Because a public version of proposed GEM is being released with these proposed rules, stakeholders are free to use this tool to explore the effectiveness of different numbers of gears and gear ratios over the proposed test cycles.  The agencies request comment on all aspects of the GEM tool, including how it models transmissions and shifting strategies.  More details on GEM are available in the draft RIA Chapter 4.
Other architectural changes that the agencies project will offer efficiency improvements include improved automated manual transmissions (AMT) and introduction of dual clutch transmissions (DCT).  Newer versions of AMT are showing significant improvements in reliability, such that the current generation of transmissions with this architecture is more likely to retain resale value and win customer acceptance than early models.  The agencies believe AMT generally compare favorably to manual transmissions in fuel efficiency, and while the degree of improvement is highly driver-dependent, it can be two percent or greater, depending on the drive cycle. See Section III for additional discussion of AMT.  The agencies are not assigning fixed average performance levels to compare an AMT with a traditional automatic transmission. Although the lack of a torque converter offers AMT an efficiency advantage in one respect, the lag in power during shifts is a disadvantage.  For Phase 2, the agencies have developed validated models of both AMT and AT, as described in the draft RIA Chapter 4. Manufacturers installing AMT or AT would enter the relevant inputs to GEM and the simulation would calculate the performance.  Dual clutch transmissions (DCT) designed for medium heavy-duty vocational vehicles are already in production, and could reasonably be expected to be adapted for other weight classes of vocational vehicles during the time frame of Phase 2.  Based on supplier conversations, manufacturers intend to match varying DCT designs with the diverse needs of the heavy-duty market.  The agencies do not yet have a validated DCT model in GEM, and we are not assigning a fixed performance level for DCT, though we expect the per-vehicle fuel efficiency improvement due to switching from automatic to DCT to be in the range of three percent over the GEM vocational vehicle test cycles.  Selection of transmission architecture type (Manual, AMT, AT, DCT) would be made by manufacturers at the time of certification, and GEM would either use this input information to simulate that transmission using algorithms as described in the draft RIA Chapter 4, or fixed improvements may be assigned.  The agencies are assigning fixed levels of improvement that vary by test cycle in GEM for AMT when replacing a manual, which for vocational vehicles would be in the HHD Regional subcategory.  If a manufacturer elected not to conduct powertrain testing to obtain specific improvements for use of a DCT, GEM would simulate a DCT as if it were an AMT, with no fixed assigned benefit. The draft RIA at Chapter 2.9 describes the projected effectiveness of each type of transmission improvement for each vocational vehicle test cycle. 
Hybrid powertrain systems are included under transmission technologies because, depending on the design and degree of hybridization, they may either replace a conventional transmission or be deeply integrated with a conventional transmission. Further, these systems are often manufactured by companies that also manufacture conventional transmissions.
The agencies are including hybrid powertrains as a technology on which some of the proposed vocational vehicle standards are predicated.  We project a variety of mild and strong hybrid systems, with a wide range of effectiveness.  Mild hybrid systems that offer an engine stop-start feature are discussed below under workday idle reduction.  For hybrid powertrains, we are estimating a 22 to 25 percent fuel efficiency improvement over the powertrain test, depending on the duty cycle in GEM for the applicable subcategory. The agencies obtained these estimates by projecting a 27 percent effectiveness over the ARB Transient cycle, and zero percent over the constant-speed highway cruise cycles.  With the proposed cycle weightings, this calculates to a 25 percent improvement over the Urban cycle, and 22 percent over the Multi-Purpose cycle. According to the NREL Final Evaluation of UPS Diesel Hybrid-Electric Delivery Vans, the improvement of a hybrid over a conventional diesel in gallons per ton-mile on a chassis dynamometer over the NYC Composite test cycle was 28 percent.  NREL characterizes the NYC Composite cycle as more aggressive than most of the observed field data points from the study, and may represent an ideal hybrid cycle in terms of low average speed, high stops per mile, and high kinetic intensity.  NREL noted that most of the observed field data points were reasonably represented by the HTUF4 cycle, over which the chassis dynamometer results showed a 31 percent improvement in gallons per ton-mile.  In units of grams CO2 per mile, NREL reported these test results as 22 percent improvement over the NYC Composite cycle and 26 percent improvement over the HTUF4 cycle.  Based on these results, and the fact that any improvement from strong hybrids in Phase 2 would not be simulated in GEM, but rather would be evaluated using the powertrain test, the agencies deemed it reasonable to estimate a conservative 27 percent effectiveness over the ARB Transient in setting the stringency of the proposed standards.
The Phase 1 standards were not predicated on any adoption of hybrid powertrains in the vocational vehicle sector.  Because the first implementation year of Phase 1 came just three years after promulgation, there was insufficient lead time for development and deployment of the technology.  In addition, our proposed Phase 2 vocational vehicle GEM test cycles are expected to better recognize hybrid technology effectiveness than the Phase 1 hybrid test cycle, especially in the Urban subcategory.  Further, our Phase 2 cost analysis shows that hybrid systems designed for LHD and MHD vocational vehicles would cost less than the costs we were projecting in Phase 1.  The agencies believe the Phase 2 rulemaking timeframes would offer sufficient lead time to develop, demonstrate, and conduct reliability testing for technologies that are still maturing, including these hybrid technologies.
Several types of vocational vehicles are well suited for hybrid powertrains, and tend to be early adopters of this technology.  Vehicles such as utility or bucket trucks, delivery vehicles, refuse haulers, and buses have operational usage patterns with either a significant amount of stop-and-go activity or spend a large portion of their operating hours idling the main engine to operate a PTO unit.  
The industry is currently developing many variations of hybrid powertrain systems. There are a few hybrid systems in the market today and several more under development.  In addition, energy storage systems are improving.  Heavy-duty customers are getting used to these systems with the number of demonstration products on the road.  Even so, some manufacturers may be uncertain how much investment to make in this technology without clear signals about future market demand.  A list of hybrid manufacturers and their products intended for the vocational market is provided in the draft RIA Chapter 2.9.  
Some low cost products on the simple end of the hybrid spectrum are available that minimize battery demand through the use of ultracapacitors or only provide power assist at low speeds.  Our regulations define a hybrid system as one that has the capacity for energy storage.  In the light-duty GHG program a mild hybrid is defined as including an integrated starter generator, a high-voltage battery (above 12v), and a capacity to recover at least 15 percent of the braking energy.  In such systems some accessories are usually electrified.  Strong hybrids are typically referred to as those that have larger energy recovery and storage capacity, defined at 65 percent braking energy recovery in the light-duty GHG program.  Although integration of a strong hybrid system may enable installation of a downsized engine in some cases, the agencies have not projected any vocational engine downsizing for any hybrid systems as part of our Phase 2 technology assessment.  Depending on the drive cycle and units of measurement, strong hybrids developed to date have seen fuel consumption and CO2 emissions reductions between 20 and 50 percent in the field. 
The agencies are working to reduce barriers related to hybrid vehicle certification.  In Phase 1, there is a significant test burden associated with demonstrating the GHG and fuel efficiency performance of vehicles with hybrid powertrain systems.  Manufacturers must obtain a conventional vehicle that is identical to the hybrid vehicle in every way except the transmission, test both, and compare the results.  In Phase 2, the agencies are proposing that manufacturers would conduct powertrain testing on the hybrid system, and the results of that testing would become inputs to GEM for simulation of the non-powertrain features of the hybrid vehicle, removing a significant test burden.  
In discussions with manufacturers during the development of Phase 2, the agencies have learned that meeting the on-board diagnostic requirements for criteria pollutant engine certification continues to be a potential impediment to adoption of hybrid systems.  See Section XIV.A.1 for a discussion of regulatory changes proposed to reduce the non-GHG certification burden for engines paired with hybrid powertrain systems. 
Axles
The agencies are considering two axle technologies for the vocational vehicle sector. The first is advanced low friction axle lubricants. SwRI tested improved driveline lubrication and found measurable improvements by switching from current mainstream products to newer formulations focusing on modified viscometric effects.  Synthetic lubricant formulations can offer superior thermal and oxidative stability compared to petroleum or mineral based lubricants. The agencies believe that a 0.5 percent improvement in vocational vehicle efficiency (as for tractors) is achievable through the application of low friction axle lubricants, and have included that value as a fixed value in GEM.  Beyond the use of different lubricant formulations, some axle manufacturers are offering products that achieve efficiency improvements by varying the lubrication levels with vehicle speed, reducing churning losses.  The agencies request comment on whether we could accept these systems as qualifying for a fixed GEM improvement value.  If a manufacturer wishes to demonstrate the benefit of a specific axle technology, an off-cycle technology credit would be necessary.  To support such an application, manufacturers could conduct a rear axle efficiency test, as described in the draft RIA Chapter 3.8.  Proposed regulations for this test procedure can be found at 40 CFR 1037.515.   Our estimated axle lubricating costs do not include operational costs such as refreshing lubricants on a periodic basis.  Based on supplier information, it is likely that some advanced lubricants may have a longer drain interval than traditional lubricants.  We are estimating the axle lubricating costs for HHD to be the same as for tractors since those vehicles likewise typically have three axles.  However, for LHD and MHD vocational vehicles, we scaled down the cost of this technology to reflect the presence of a single rear axle.
The second axle technology the agencies are considering is a design that enables one of the rear axles to disconnect or otherwise behave as if it's a non-driven axle, on vehicles with two rear (drive) axles, commonly referred to as a 6x2 configuration.  The agencies have considered two types of 6x2 configurations for vocational vehicles:  those that are engaged full time on a vehicle, and those that may be engaged only during some types of vehicle operation, such as only when operating at highway cruise speeds.  Some early versions of 6x2 technology offered by manufacturers were not accepted by vehicle owners.  When the second drive axle is no longer powered, traction may be sacrificed in some cases.  Vehicles with earlier versions of this technology have seen reduced residual values in the secondary market.  Over the model years covered by the Phase 2 rules, the agencies expect the market to offer significantly improved versions of this technology, with traction control maintained at lower speeds and efficiency gains at highway cruise speeds.  Further information about this technology is provided in the feasibility of the tractor standards, Section III, as well as in draft RIA Chapter 2.4.  
The efficiency benefit of a 6x2 axle configuration can be duty-cycle dependent.  In many instances, vocational vehicles need to operate off-highway, such as at a construction site delivering materials or dumping at a refuse collection facility.  In these cases, vehicles with two drive axles may need the full tractive benefit of both drive axles.  The part-time 6x2 axle technology is not expected to measurably improve a vehicle's efficiency for vehicles whose normal duty cycle involves performing significant off-highway work, but the agencies do expect this technology to be recognized over a highway cruise cycle.
Some vocational vehicles in the HHD Regional subcategory may see a 6x2 axle configuration as a reasonable option for improving fuel efficiency.  As in Phase 1, our vehicle simulation model assumes that only HHD vehicles have two rear axles, so only these could be recognized for adopting this technology.  Further, the agencies don't believe the Multipurpose and Urban subcategories include a significant enough highway cycle weighting in the composite cycle for vehicles that operate in this manner to experience a benefit from adopting this technology.  The agencies project this can achieve 2 percent benefit at highway cruise, thus we propose to assign a fixed value in GEM for part-time 6x2 technology of 2.5 percent over the highway cruise cycles, where the specific improvement would be calculated according to the composite weighting of the applicable vocational vehicle test cycle.  We request comment on the best way to recognize this technology in Phase 2, either through a GEM calculation or a fixed assigned value, for vocational vehicles.
Lower Rolling Resistance Tires
Tires are the second largest contributor to energy losses of vocational vehicles, as found in the energy audit conducted by Argonne National Lab.  There is a wide range of rolling resistance of tires used on vocational vehicles today.  This is in part due to the fact that the competitive pressure to improve rolling resistance of vocational vehicle tires has been less than that found in the line haul tire market.  In addition, the drive cycles typical for these applications often lead vocational vehicle buyers to value tire traction and durability more heavily than rolling resistance.  The agencies acknowledge there can be tradeoffs when designing a tire for reduced rolling resistance.  These tradeoffs can include characteristics such as wear resistance, cost and scuff resistance.  However, based on input from tire suppliers, the agencies expect that the LRR tires that will be available in the Phase 2 timeframe will not compromise performance parameters such as traction, handling, wear, retreadability, or structural durability. 
After the Phase 1 rules were promulgated, NHTSA and EPA conducted supplemental tire testing.  Other data that have become available to the agencies since Phase 1 include pre-certification data provided to manufacturers by tire suppliers in preparation for MY 2014 vehicle certification.   The agencies categorized the data by tire position and vehicle application, so that we have a representation of the variety of LRR vocational vehicle tires that are available in the market for the drive position, steer and all-position tires, as well as wide base singles in all positions.  Based on our data set that includes results from multiple laboratories, drive tires that are intended for vocational vehicles have an average CRR of 7.8, and steer and all-position tires that are intended for vocational vehicles have an average CRR of 6.7.  The results also indicate that there are a variety of wide based single tires that are intended for vocational vehicles, with an average CRR of 6.6.  Each of these data sets shows several models of commercial tires are available at levels of CRR ranging generally from 20 percent worse than average to 20 percent better than average.  Further details are presented in the draft RIA Chapter 2.
According to the 2014 SwRI report, vocational vehicles are likely to see the most benefits from reduced tire rolling resistance when they are driving at 55 mph.  This report also found an influence of vehicle weight on the benefits of LRR tires. The study found that both vocational vehicles tested had greater benefits of LRR tires at 100 percent payload than when empty.  Also, the T270 delivery box truck that was 4,000 pounds heavier when fully loaded saw slightly greater efficiency gains from LRR tires than the F650 flatbed tow truck over the same cycles.  At higher speeds, aerodynamic drag grows, which reduces the rolling resistance share of total vehicle power demand.  In highly transient cycles, the power required to accelerate the vehicle inertia overshadows the rolling resistance power demand.  In simulation, GEM represents vocational vehicles with fixed vehicle weights, payloads and aerodynamic coefficients.  Thus, the benefit of LRR tires will be reflected in GEM differently for vehicles of different weight classes.  There will also be further differences arising from the different test cycles.  Based on preliminary simulations, it appears the vehicles in GEM most likely to see the greatest fuel efficiency gains from use of LRR tires are those in the MHD weight classes tested over the Regional or Multipurpose duty cycles, where one percent efficiency improvement could be achieved by reducing CRR by four to five percent.  Those seeing the least benefit from LRR tires would likely be Class 8 vehicles tested over the Urban or Multipurpose cycles, where one percent efficiency improvement could be achieved by reducing CRR by seven to eight percent.
The agencies propose to continue the light truck (LT) tire CRR adjustment factor that was adopted in Phase 1.  See generally 76 FR 57172-74.  In Phase 1, the agencies developed this adjustment factor by dividing the overall vocational test average CRR of 7.7 by the LT vocational average CRR of 8.9. This yielded an adjustment factor of 0.87.  After promulgation of the Phase 1 rules, the agencies conducted additional tire CRR testing on a variety of LT tires, most of which were designated as all-position tires.  In addition, manufacturers have submitted to the agencies pre-certification data that include CRR values provided by tire suppliers.  For the small subset of newer test tires that were designated as steer tires, the average CRR was 7.8 kg/ton.  For the subset of newer test tires that were designated as drive tires, the average CRR was 8.6 kg/ton. However all-position tires had an average CRR of 8.9 kg/ton.  Therefore, for LT vocational vehicle tires, we propose to continue allowing the measured CRR values to be multiplied by a 0.87 adjustment factor before entering the values in the GEM for compliance, because this additional testing has not revealed compelling information that a change is needed.  We request comment on whether the adjustment factor should be retained, as well as data on which to base a possible update of its numerical value. 
As described above in V. B. (4) (c), the agencies are proposing to continue the Phase 1 off-road and low speed exemptions in Phase 2, with the proposed revision of discontinuing the option to qualify for this exemption solely if the vehicle is fitted with tires that have a maximum speed rating at or below 55 mph.  The agencies welcome comments on this revision.
Workday Idle Reduction
The Phase 2 idle reduction technologies considered for vocational vehicles are those that reduce workday idling, unlike the overnight idling of combination tractors.  There are many potential technologies.  The agencies in particular evaluated neutral idle and stop-start technologies, and the proposed standards are predicated on projected amounts of penetrations of these technologies, described in Section V. C. (2) .  While neutral idle is necessarily a transmission technology, stop-start could range from an engine technology to one that would be installed by a secondary manufacturer under a delegated assembly agreement. 
The agencies are aware that for a vocational vehicle's engine to turn off during workday driving conditions, there must be a reserve source of energy to maintain functions such as power steering, cabin heat, and transmission pressure, among others. Stop-start systems can be viewed as having a place on the low-cost end of the hybridization continuum. As described in Section V. C. (2)  and in the draft RIA Chapter 2.9, the agencies are including the cost of energy storage sufficient to maintain critical onboard systems and restart the engine as part of the cost of vocational vehicle stop-start packages.  The technologies to capture this energy could include a system of photovoltaic cells on the roof of a box truck, or regenerative braking. The technologies to store the captured energy could include a battery or a hydraulic pressure bladder.  More discussion of stop-start technologies is found in the draft RIA Chapter 2.4.
The agencies intend for the technologies that would qualify to be recognized in GEM as stop-start to be broadly defined, including those that may be installed at different stages in the manufacturing process. The agencies request comment on an appropriate definition of stop-start technologies for vocational vehicles. 
The agencies are also proposing a certification test cycle that measures the amount of fuel saved and CO2 reduced by these two primary types of idle reduction technologies:  neutral idle and stop-start. Vocational vehicles frequently also idle while cargo is loaded or unloaded, and while operating a PTO such as compacting garbage or operating a bucket.  In these rules, the agencies are proposing that the Regional duty cycle have ten percent idle, the Multi-purpose cycle have 15 percent idle, and the Urban cycle have 20 percent idle. These estimates are based on publically available data published by NREL.  To bolster this information, EPA entered into an interagency agreement with NREL to characterize workday idle among vocational vehicles. One task of this agreement is to estimate the nationally representative fraction of idle operation for vocational vehicles for each proposed regulatory subcategory including a distinction between idling while driving or stopping in gear, and idling while parked.  The preliminary range of total idle operation indicated by this work is from 15 percent to 70 percent.  The agencies request comment regarding the nature of vocational workday idle operation, including how much of it is in traffic and how much is while the vehicle is parked.  Depending on comments and additional information received during the comment period, it may be within the agencies' discretion to adopt different final test cycles, or re-weight the current test cycles, to better represent real world driving and better reflect performance of the technology packages.
Based on GEM simulations using the currently proposed vocational vehicle test cycles, the agencies estimate neutral idle for automatic transmissions to provide fuel efficiency improvements ranging from one percent to nearly four percent, depending on the regulatory subcategory.  The agencies estimate stop-start to provide fuel efficiency improvements ranging from 0.5 percent to nearly seven percent, depending on the regulatory subcategory.  Because of the higher idle weighting factor in the Urban test cycle, vehicles certified in these subcategories would derive the greatest benefit from applying idle reduction technologies.
Although the primary program would not simulate vocational vehicles over a test cycle that includes PTO operation, the agencies are proposing to continue, with revisions, the hybrid-PTO test option that was in Phase 1. See 40 CFR 1037.525 and 76 FR 57247.  Recall that we are proposing to regulate vocational vehicles at the incomplete stage when a chassis manufacturer may not know at the time of certification whether a PTO will be installed or how the vehicle will be used.  Based on stakeholder input, chassis manufacturers are expected to know whether a vehicle's transmission is PTO-enabled.  However, that is very different from knowing whether a PTO will actually be installed and how it will be used.  Chassis manufacturers may rarely know whether the PTO-enabled vehicle will use this capability to maneuver a lift gate on a delivery vehicle, to operate a utility boom, or merely to keep it as a reserve item to add value in the secondary market.  In cases where a manufacturer can certify that a PTO with an idle-reduction technology will be installed either by the chassis manufacturer or by a second stage manufacturer, the hybrid-PTO test cycle may be utilized by the certifying manufacturer to measure an improvement factor over the GEM duty cycle that would otherwise apply to that vehicle.  In addition, the delegated assembly provisions would apply.  See Section V.E for a description of the delegated assembly provisions.  See draft RIA Chapter 3 for a discussion of the proposed revisions to the PTO test cycle. 
The agencies have reason to believe there may be a NOX co-benefit to stop-start idle reduction technologies, e-PTO, and possibly also to neutral idle.  For this to be true, the benefits of reduced fuel consumption and retained aftertreatment temperature would have to outweigh any extra emissions due to re-starts.  In the draft RIA Chapter 5, there is a more detailed discussion of the relationship between idle reduction and NOX co-benefits.  The agencies request comments and relevant test data that can help inform this issue.
Weight Reduction
The agencies believe there is opportunity for weight reduction in some vocational vehicles. According to the 2009 TIAX report, there are freight-efficiency benefits to reducing weight on vocational vehicles that carry heavy cargo, and tax savings potentially available to vocational vehicles that remain below excise tax weight thresholds.  This report also estimates that the cost effectiveness of weight reduction over urban drive cycles is potentially greater than the cost effectiveness of weight reduction for long haul tractors and trailers.  On a city duty cycle, 89 percent of the vehicle's road load is weight dependent, compared to 38 percent on a steady-state 55 mph duty cycle.  The 2014 SwRI report found that weight reduction provides a greater fuel efficiency benefit for vehicles driving under transient conditions than for those operating under constant speeds.  In simulation, the study found that the two Class 6 trucks improved fuel efficiency by over two percent on the ARB transient cycle by removing 1,100 lbs. Further, SwRI observed that the improvements due to weight reduction behaved linearly.  The proposed menu of components available for a vocational vehicle weight credit in GEM is presented in Section V.E and in the draft RIA Chapter 2.9.  It includes fewer options than for tractors, but the agencies believe there are a number of feasible material substitution choices at the chassis level, which could add up to weight savings on the order of a few hundred pounds. The agencies project that refuse trucks, construction vehicles, and weight-limited regional delivery vehicles could reasonably apply material substitution for weight reduction.  We do not expect this to be broadly applicable across many types of vocational vehicles.  Based on the assumed payload in GEM, and depending on the vocational vehicle subcategory, the agencies believe a reduction of 200 pounds may offer a fuel efficiency improvement of approximately 1 to 2 percent.
Without more specific data on which to base our assumptions, the agencies are proposing to allocate 50 percent of any mass reduction to increased payload, and 50 percent to reduce the chassis weight. We considered the data on which the tractor weight allocation (1/3:2/3) is based, but determined this would not be valid for vocational vehicles, as the underlying data pertained only to long haul tractor-trailers.  The agencies propose that 50 percent of weight removed from vocational vehicle chassis would be added back as additional payload in GEM. This suggests an equal likelihood that a vehicle would be reducing weight for benefits of being lighter, or reducing weight to carry more payload.  The agencies welcome data that could better inform the fraction of weight reduced for vocational vehicles that is added back as payload.
The agencies request comment on whether the HD Phase 2 program should recognize that weight reduction of rotating components provides an enhanced fuel efficiency benefit over weight reduction on static components.  In theory, as components such as brake rotors, brake drums, wheels, tires, crankshafts, camshafts, and piston assemblies become lighter, the power consumption to rotate the masses would be directly proportional to the mass decrease.  Using physical properties of a rotating component such as a wheel, it is relatively straightforward to calculate an equivalent mass.  However, we do not have enough information to derive industry average values for equivalent mass, nor have we evaluated the best way for GEM to account for this.
HFC Refrigerant from Cabin Air Conditioning (A/C) Systems
Manufacturers can reduce direct A/C leakage emissions by utilizing leak-tight components. EPA's proposed HFC direct emission leakage standard would be independent of the CO2 vehicle standard.  Manufacturers could choose components from a menu of leak-reducing technologies sufficient to comply with the standard, as opposed to using a test to measure performance.  See 76 FR 57194/3.
In Phase 1, EPA adopted a HFC leakage standard to assure that high-quality, low-leakage components are used in each air conditioning system installed in HD pickup trucks, vans, and combination tractors (see 40 CFR 1037.115(c)).  We did not adopt a HFC leakage standard in Phase 1 for systems installed in vocational vehicles.  EPA is proposing in Phase 2 to extend the HFC leakage standard that exists due to Phase 1 requirements to all vocational vehicles.  Beginning in the 2021 model year, EPA proposes that vocational vehicle air conditioning systems with a refrigerant capacity of greater than 733 grams meet a leakage rate of 1.50 percent leakage per year and systems with a refrigerant capacity of 733 grams or lower meet a leakage standard of 11.0 grams per year.  EPA believes this proposed approach of having a leak rate standard for lower capacity systems and a percent leakage per year standard for higher capacity systems would result in reduced refrigerant emissions from all air conditioning systems, while still allowing manufacturers the ability to produce low-leak, lower capacity systems in vehicles which require them.
EPA believes that reducing A/C system leakage is both highly cost-effective and technologically feasible.  The availability of low leakage components is being driven by the air conditioning program in the light-duty GHG rule which began in the 2012 model year and the HD Phase 1 rule that began in the 2014 model year.  The cooperative industry and government Improved Mobile Air Conditioning program has demonstrated that new-vehicle leakage emissions can be reduced by 50 percent by reducing the number and improving the quality of the components, fittings, seals, and hoses of the A/C system.  All of these technologies are already in commercial use and exist on some of today's systems, and EPA does not anticipate any significant improvements in sealing technologies for model years beyond 2021. However, EPA has recognized some manufacturers utilize an improved manufacturing process for air conditioning systems, where a helium leak test is performed on 100 percent of all o-ring fittings and connections after final assembly. By leak testing each fitting, the manufacturer or supplier is verifying the o-ring is not damaged during assembly (which is the primary source of leakage from o-ring fittings), and when calculating the yearly leak rate for a system, EPA will allow a relative emission value equivalent to a `seal washer' can be used in place of the value normally used for an o-ring fitting, when 100 percent helium leak testing is performed on those fittings.  The agencies request comment on other possible improvements in the design of air conditioning systems that EPA could recognize for the purposes of compliance with this proposed standard.  For example, should the agency recognize electrified compressors as having a zero leak rate, and should we allow vehicles fitted with electrified compressors to use a simplified version of the compliance reporting form?  Please see Section I.F.1 (b) of this preamble for a description of proposed program-wide revisions to EPA's HFC leakage standards that would address air conditioning systems designed for alternative refrigerants.
The HFC control costs presented in the draft RIA Chapter 2.9 and 2.12 are applied to all heavy-duty vocational vehicles.  EPA views these costs as minimal and the reductions of potent GHGs to be easily feasible and reasonable in the lead times provided by the proposed rule. 
    Engine Technologies Considered in Vehicle Standard-Setting
Section II explains the technical basis for the agencies' proposed separate engine standards.  The agencies are not proposing to predicate the vocational vehicle standards on different diesel engine technology packages than those presumed for compliance with the separate diesel engine standards.  However, for the proposed MY 2027 vocational vehicle standards, the agencies are predicating the SI-powered vocational vehicle standards on a gasoline engine technology package that includes additional friction reduction beyond that presumed for compliance with the MY 2016 gasoline engine standard.  Chapter 2 of the draft RIA provides more details on each of the technologies that can be applied to both gasoline and diesel engines. 
The vehicle-level standards would vary depending on whether the engines powering those vehicles are compression-ignition or spark-ignition.  In Phase 1, this was not the case because GEM used a default engine that was the same for every vehicle configuration, regardless of the actual engine being installed.  As described above in Section II, the Phase 2 vehicle certification tool, GEM, would require manufacturers to enter specific engine performance data, where emissions and fuel consumption profiles would differ significantly depending on the engine's architecture.
As explained in Section II.A.2, engines would continue to be certified over the FTP test cycle.  The FTP test cycle that is applicable for bare vocational engines is very different than the proposed test cycles for vocational vehicles in GEM.  That test is a very demanding transient cycle that exercises the engine over its full range of capabilities.  In contrast, the cycles evaluated by GEM measure emissions over more frequently used engine operating ranges.  The ARB Transient vehicle cycle represents city driving, and the highway cruise cycles measure engine operation that is closer to steady state.  Each of these cycles is described in the draft RIA Chapter 3.  A consequence of recognizing engine performance at the vehicle level would be that further engine improvements (i.e. improvements measureable by duty cycles that more precisely represent driving patterns for specific subcategories of vocational vehicles) could be evaluated as possible components of a technical basis for a vocational vehicle standard.  For this reason, the agencies considered whether any different engine technologies should be included in the feasibility analysis for the vehicle standards (and potentially, in the proposed standard stringency). 
One CI engine technology that might be recognized over a vehicle highway cruise cycle would be waste heat recovery (WHR).  However, the agencies do not consider this to be a feasible technology for vocational engines.  As described in Section II of this preamble and Chapter 2.3 of the draft RIA, there currently are no commercially available WHR systems for diesel engines, although most engine manufacturers are exploring this technology.  While it would be possible to capture excess heat from a vocational engine operating at highway speeds, many vocational vehicles spend insufficient time at highway speeds to generate enough excess heat to make this technology worthwhile.  As explained in Section II.D, the agencies are projecting a very small adoption rate of WHR even in the tractor engine market.  Because the research is currently being conducted to apply this technology for tractors, it is logical that future research may reveal ways to adapt this technology for those vocational engines that are intended for on-highway applications.  The agencies do not believe this technology will be developed to the point of commercial readiness for vocational vehicles in the time frame of these proposed rules.
The agencies assessed three SI engine technologies for possible inclusion in the vocational vehicle technology packages:  cylinder deactivation, variable valve timing, and advanced friction reduction.  These might be recognized over the proposed vocational vehicle test cycles in GEM through use of the proposed engine mapping procedures.  To the extent either cylinder deactivation or variable valve timing would be adopted for complete heavy-duty pickups and vans, they would be recognized over the complete chassis test specified for that segment and possibly over the GEM highway cruise cycles, however the aggressive bare engine FTP test is unlikely to put the engine into operating modes that activate either of those technologies.  Based on stakeholder input, the agencies project that the SI engines certified over the FTP and fitted into vocational vehicles would most likely be designed as overhead valve engines, for which the only kind of VVT available is dual cam phasing.  Dual cam phasing is already included at 100 percent adoption rate in the feasibility and stringency of the MY 2016 bare engine standard.  If manufacturers choose to fit vocational vehicles with coaxial camshaft SI engines, additional VVT options would be feasible and could be recognized over the vocational vehicle test cycles.  Based on stakeholder input, the agencies project that some SI engines certified over the FTP and fitted into vocational vehicles may be designed with cylinder deactivation by MY 2021.  However, the agencies do not have enough information at this time to quantify the potential fuel efficiency improvements over the vocational vehicle test cycles for engines with cylinder deactivation or various designs implementing VVT.  Therefore we are not proposing to predicate the SI-powered vocational vehicle standards on use of these technologies. 
In Section II.D, the agencies explain why we are not proposing a more stringent separate SI vocational engine standard in Phase 2 based on additional engine technologies beyond those assumed for the Phase 1 MY 2016 standard.  The agencies are instead proposing to include adoption and performance of advanced engine friction reduction technology as a basis for the proposed SI-powered vocational vehicle standards.  Based on Volpe model results, the agencies project that manufacturers of some SI engines for complete HD pickups would apply advanced friction reduction.  Level 2 engine friction reduction is listed in Table VI-3, and costs are presented in the draft RIA Chapter 2.12.  We expect some engines with this technology would be engine-certified and sold for use in vocational vehicles.  We are projecting an overall effectiveness of 0.6 percent improvement over the GEM cycles for this technology, calculated using a per-vehicle effectiveness of 1.1 percent and a vocational vehicle adoption rate of 56 percent.  We request comment on the merits of setting a SI-based vocational vehicle standard predicated on adoption of SI engine technologies.
    Technologies the Agencies Assessed but did not Use In Standard-Setting
Aerodynamics  
The Argonne National lab work shows that aerodynamics has less of an impact on vocational vehicle energy losses than do engines or tires. Further, when a vehicle spends significant time at slower speeds, the disbenefit of the added weight of the aero devices diminishes the benefit obtained when driving at high speeds.  In addition, the aerodynamic performance of a complete vehicle is significantly influenced by the body of the vehicle.  As noted above, the agencies are not proposing to regulate body builders for the reasons discussed in Phase 1.
The NAS 2010 report estimated a one percent fuel efficiency improvement could be achieved from a full aerodynamic package on a box truck with an average speed of 30 mph.  Both from the NAS 2010 report and from experiences of EPA's SmartWay team, the agencies expect the potential benefits of aerodynamics at an average speed of 60 mph would be diminished by 50 percent or more when average speeds are closer to 40 mph. The proposed Regional composite duty cycle in GEM for vocational vehicles (the test cycle with the most highway weighting) has a weighted average speed of 39 mph.
The 2014 SwRI technology assessment simulated a Class 6 box truck with a coefficient of aerodynamic drag that had been improved by 15 percent.  Over transient test cycles, this produced a one percent fuel efficiency benefit, though this produced results of approximately seven percent improvement over the 55 mph and eight percent over the 65 mph cycle. SwRI conducted coastdown testing to determine the baseline CdA of the truck, of 5.0.   However, it is unknown what aerodynamic technologies could be applied to yield a 15 percent improvement in CdA. Using these simulation results and the proposed Regional cycle weightings of 22 percent at 65 mph and 28 percent at 55 mph, the agencies estimate the fuel efficiency benefit of improving the CdA of a Class 6 box truck by 15 percent could be approximately four percent. This assumes no penalty for carrying the weight of the aerodynamic devices while operating under transient driving conditions.
Because we do not have information on specific technologies that could be applied to vocational vehicles to yield a 15 percent improvement in CdA, or their costs, we are not basing any of the proposed standards for vocational vehicles on aerodynamic improvements.  Nonetheless, we are working with CARB to incorporate into GEM some data from testing that is being conducted by CARB through NREL.  A test plan is underway to assess the fuel efficiency benefit of three different devices to improve the aerodynamic performance of a Class 6 box truck and one device on a Class 4 box truck.  The agencies request comment on allowing  a manufacturer to obtain an improved GEM result by certifying that a final vehicle configuration will closely match one of the configurations on which this testing was conducted, where the improvement would be based on installation of specific aerodynamic devices for which we have pre-defined effectiveness through this testing program.  The amount of improvement would be set by EPA and NHTSA based on NREL's test results.  This credit provision would apply only to vocational vehicles certified over the Regional duty cycle. Manufacturers wishing to receive credit for other aerodynamic technologies or on other vehicle configurations would be able to seek credit for it as an off-cycle technology. See Section V.E, for a description of regulatory flexibilities such as off-cycle technology credits.
A description of vehicles and aerodynamic technologies that could be eligible for this option, as well as a description of the testing conducted to obtain the assigned GEM improvements due to these technologies, can be found in a memorandum to the docket.  The agencies seek comment on this potential approach to providing credits for aerodynamic aids to vocational box trucks.
Full Electric Trucks
Some heavy-duty vehicles can be powered exclusively by electric motors.  Electric motors are efficient and able to produce high torque, giving e-trucks strong driving characteristics, particularly in stop-and-go or urban driving situations, and are well-suited for moving heavy loads.  Electric motors also offer the ability to operate with very low noise, an advantage in certain applications.  Currently, e-trucks have some disadvantages over conventional vehicles, primarily in cost, weight and range.  Components are relatively expensive, and storing electricity using currently available technology is expensive, bulky, and heavy.
The West Coast Collaborative, a public-private partnership, has estimated the incremental costs for electric Class 3-6 trucks in the Los Angeles, CA, area.  Compared to a conventional diesel, the WCC estimates a BEV system would cost between $70,000 and $90,000 more than a conventional diesel system. The CalHEAT Technology Roadmap includes an estimate that the incremental cost for a fully-electric medium- or heavy- duty vehicle would be between $50,000 and $100,000.  This roadmap report also presents several actions that must be taken by manufacturers and others, before heavy-duty e-trucks can reach what they call Stage 3 Deployment.  
Early adopters of electric drivetrain technology are medium-heavy-duty vocational vehicles that are not weight-limited and have drive cycles where they don't need to go far from a central garage.  Examples include Frito-Lay. CalHEAT has published results of a comprehensive performance evaluation of three battery electric truck models using information and data from in-use data collection, on road testing and chassis dynamometer testing.   
Given the high costs and the developing nature of this technology, the agencies do not project fully electric vocational vehicles to be widely commercially available in the time frame of the proposed rules.  For this reason, the agencies have not based the proposed Phase 2 standards on adoption of full-electric vocational vehicles.  To the extent this technology is able to be brought to market in the time frame of the Phase 2 program, there is currently a certification path for these chassis from Phase 1, as described in Section V.E and in EPA's regulations at 40 CFR 1037.150 and NHTSA's regulations at 49 CFR 535.8.
Electrified Accessories
Accessories that are traditionally gear- or belt-driven by a vehicle's engine can be optimized and/or converted to electric power. Examples include the engine water pump, oil pump, fuel injection pump, air compressor, power-steering pump, cooling fans, and the vehicle's air-conditioning system.  Optimization and improved pressure regulation may significantly reduce the parasitic load of the water, air and fuel pumps.  Electrification may result in a reduction in power demand, because electrically-powered accessories (such as the air compressor or power steering) operate only when needed if they are electrically powered, but they impose a parasitic demand all the time if they are engine-driven.  In other cases, such as cooling fans or an engine's water pump, electric power allows the accessory to run at speeds independent of engine speed, which can reduce power consumption.  Electrification of accessories can individually improve fuel consumption, regardless of whether the drivetrain is a strong hybrid. The TIAX study used 2 to 4 percent fuel consumption improvement for accessory electrification, with the understanding that electrification of accessories will have more effect in short haul/urban applications and less benefit in line-haul applications.
Electric power steering (EPS) or Electrohydraulic power steering (EHPS) provides a potential reduction in CO2 emissions and fuel consumption over hydraulic power steering because of reduced overall accessory loads.  This eliminates the parasitic losses associated with belt-driven power steering pumps which consistently draw load from the engine to pump hydraulic fluid through the steering actuation systems even when the wheels are not being turned.  EPS is an enabler for all vehicle hybridization technologies since it provides power steering when the engine is off.  EPS is feasible for most vehicles with a standard 12V system.  Some heavier vehicles may require a higher voltage system which may add cost and complexity.
The agencies are projecting that some electrified accessories will be necessary as part of the development of stop-start idle reduction systems for vocational vehicles.  However, the agencies have not developed a pre-defined credit-generating option for manufacturers to directly receive credit in GEM for electrified accessories on vocational vehicles.  Manufacturers wishing to conduct independent testing may apply for off-cycle credits derived from electrified accessories. 
E-PTO
There are products available today that can provide auxiliary power, usually electric, to a vehicle that needs to work in PTO mode for an extended time, to avoid idling the main engine.  There are different designs of electrified PTO systems on the market today.  Some designs have auxiliary power sources, typically batteries, with sufficient energy storage to power an onboard tool or device for a short period of time, and are intended to be recharged during the workday by operating the main engine, either while driving between work sites, or by idling the engine until a sufficient state of charge is reached that the engine may shut off.  Other designs have sufficient energy storage to power an onboard tool or device for many hours, and are intended to be recharged as a plug-in hybrid at a home garage.  The agencies are proposing to continue the hybrid-PTO test option that was available in Phase 1, with a few revisions.  See the proposed regulations at 40 CFR 1037.525.  The current test procedure is a charge-sustaining procedure, meaning the test is not complete until the energy storage system is depleted and brought back to its original state of charge.  The agencies request comment and data relating to the population and energy storage capacity of plug-in e-PTO systems, for which a charge-depleting test cycle may be more appropriate.  For the reasons described above, the agencies are not basing the proposed vocational vehicle standards on use of electrified PTO or hybrid PTO technology.  Manufacturers wishing to conduct testing as specified may apply for off-cycle credits derived from e-PTO or hybrid PTO technologies.
Projected Vehicle Technology Package Effectiveness and Cost
    Baseline Vocational Engine and Vehicle Performance
The proposed baseline vocational vehicle configurations for each of the nine proposed regulatory subcategories are described in draft RIA Chapter 2.9 and Chapter 4.4.  The agencies propose to set the baseline rolling resistance coefficient for the 2017 vocational vehicle fleet at 7.7 kg/metric ton, which assumes 100 percent of tires meet the Phase 1 standard.  
 In the agencies' proposed baseline configurations, we include torque converter automatics with five forward gears in eight of the nine subcategories. In the Regional HHD subcategory, the baseline includes a manual transmission with ten forward gears.  No additional vehicle-level efficiency-improving technology is included in the baseline vehicles, nor in the agencies' analyses for the no-action reference case.  Specifically, we have assumed zero adoption rates for other types of transmissions, increased numbers of gears, idle reduction, and technologies other than Phase 1 compliant LRR tires in both the nominally flat baseline and the dynamic baseline reference cases.  Technology adoption rates for Alternative 1a (nominally flat baseline) can be found in the draft RIA Chapter 2.12.  Chapter 2.12.8 presents the adoption rates for tires on vocational vehicles with different levels of rolling resistance, including the 100 percent adoption rate of tires with Level 1 CRR in the reference case and in model years preceding Phase 2.  In this manner, we have defined a reference vocational vehicle fleet that meets the Phase 1 standards and includes reasonable representations of vocational vehicle technology and configurations.  Details of the vehicle configurations, including reasons why they are reasonably included as baseline technologies, are discussed in the draft RIA Chapter 2.9.
 The agencies note that the baseline performance derived for the proposed rules varies between regulatory subcategories. This is due to the range of attributes and modeling parameters, such as transmission characteristics, final drive ratio, and vehicle weight, which were selected to represent a range of performance across this diverse segment. The agencies request comment on whether the proposed configurations adequately represent a reasonable range of vocational chassis configurations likely to be manufactured in the implementation years of the Phase 2 program.  We especially are interested in comments regarding the following driveline parameters:  transmission gear ratios, axle ratios, and tire radii.  
The baseline engine fuel consumption represents improvements beyond currently available engines to achieve the efficiency of what the agencies believe would be a 2017 model year diesel engine, as described in the draft RIA Chapter 2.  Using the values for compression-ignition engines, the baseline performance of vocational vehicles is shown in Table V-11.  
Different types of diesel engines are used in vocational vehicles, depending on the application.  They fall into the categories of Light, Medium, and Heavy Heavy-duty Diesel engines.  The Light Heavy-duty Diesel engines typically range between 4.7 and 6.7 liters displacement.  The Medium Heavy-duty Diesel engines typically have some overlap in displacement with the Light Heavy-duty Diesel engines and range between 6.7 and 9.3 liters.  The Heavy Heavy-duty Diesel engines typically are represented by engines between 10.8 and 16 liters.  Because of these differences, the GEM simulation of baseline vocational CI engines includes four engines - one for LHD, one for MHD, and two for HHD.  Detailed descriptions can be seen in Chapter 4 of the draft RIA. These four engine models have been employed in setting the vocational vehicle baselines, as described in the draft RIA Chapter 2.9. 
Table V-11: Baseline Vocational Vehicle Performance with CI Engines
Baseline Emissions Performance in CO2 gram/ton-mile
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
316
201
212
Multi-Purpose
325
203
214
Regional
339
199
203
Baseline Fuel Efficiency Performance in gallon per 1,000 ton-mile
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
31.0413
19.7446
20.8251
Multi-Purpose
31.9253
19.9411
21.0216
Regional
33.3006
19.5481
19.9411
The agencies intend to develop a model in GEM of a MY 2016-compliant gasoline engine, but we have been unable to obtain sufficient information to complete this process.  The agencies request comments on the process for mapping gasoline engines for simulation purposes, as well as information about the power rating and displacement that should be considered as a baseline SI engine for vocational vehicle standard-setting purposes.  In lieu of a SI engine map, the agencies have applied a correction factor to the GEM CI vocational simulation results, to approximate the baseline performance of a SI-powered vocational vehicle.  The SI-powered vocational vehicle baseline performance shown in Table V-12 was calculated from applying an adjustment factor to the respective CI-powered vocational vehicle baseline values.  This CI to SI baseline adjustment factor is derived from the Phase 1 HD pickup and van stringency curves, as described in the draft RIA Chapter 2.9.1.  The correction factor approach is not the agencies' preferred approach, as it has many drawbacks.  One key drawback with this approach is that it does not account for the fact that SI engines operate very differently than CI engines at idle.  Our current model includes information on CI engine idle performance, and assumes transmissions and torque converters appropriate for CI engines. We expect these driveline parameters would be very different for SI powered vehicles, which would affect performance over all the GEM duty cycles.
The baseline performance levels for HHD vocational vehicles powered by SI engines were derived using the same procedures described above for the MHD and LHD vehicles, adjusting the performance of the HHD CI powered vocational vehicles by the same degree as for the other vehicles.  However, we expect that any gasoline Class 8 vocational vehicle would be powered by a MHD SI engine, as there are no HHD gasoline engines on the market.  Further, we expect that if we were to develop an engine map for use in simulating heavier SI vocational vehicles in GEM, we could establish a more representative baseline performance level by calculating the work done by the MHD engine to move the heavier vehicle over the test cycles.  The agencies request comments on the merits of developing separate baseline levels and numerical standards for HHD vocational vehicles powered by SI engines, including any benefits that could be obtained by addressing this unlikely occurrence and other ways in which the agencies could avoid the instance of an orphaned SI vocational vehicle.  Commenters who favor separate numerical standards are encouraged to submit information related to appropriate default vehicle characteristics such as weight and payload.  Depending on comments, the agencies could choose to require all Class 8 vocational vehicles to certify to the standards for CI powered HHD vocational vehicles, or we could require SI powered Class 8 vocational vehicles to certify to the MHD standards for SI vocational vehicles. 
Table V-12: Baseline Vocational Vehicle Performance with SI Engines
Baseline Emissions Performance in CO2 gram/ton-mile
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
334
213
224
Multi-Purpose
344
215
226
Regional
358
211
214
Baseline Fuel Efficiency Performance in gallon per 1,000 ton-mile
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
37.5830
23.9676
25.2054
Multi-Purpose
38.7082
24.1926
25.4304
Regional
40.2836
23.7425
24.0801
    Technology Packages for Derivation of Proposed Standards
Prior to developing the numerical values for the proposed standards, the agencies projected the mix of new technologies and technology improvements that would be feasible within the proposed lead time.  We note that for some technologies, the adoption rates and effectiveness may be very similar across subcategories.  However, for other technologies, either the adoption rate, effectiveness, or both differ across subcategories.  The standards being proposed reflect the technology projected for each service class.  Where a technology performs differently over different test cycles, these differences are reflected to some extent in the derivation of the stringency of the proposed standard.  However, the proposed standard stringency does reflect, to some extent, the ability of manufacturers to utilize credits.  For example, we project that hybrid vehicles would generally be certified in the Urban subcategory and would generate emission credits that would most likely be used in the other subcategories within the weight class group.  
As part of the derivation of the numerical standards, we performed a benchmarking analysis to inform our development of standards that would have roughly equivalent stringency among the duty-cycle-based subcategories within each weight class group.  To do this, the agencies assessed the performance of broadly applicable technologies, such as low rolling resistance tires, on each of the selected baseline vehicles over each of the duty cycles. We then evaluated how much improvement could be achieved over the various duty cycles for a vehicle that incorporated all the broadly applicable technologies, but which did not include a hybrid powertrain. We simulated neutral idle for benchmarked vehicles for MY 2021 and MY 2024, and simulated stop-start idle reduction on the benchmarked MY 2027 vehicles.  From this, we learned that a vehicle with neutral idle and a deeply integrated conventional powertrain, with moderately low rolling resistance tires and some weight reduction could easily meet the proposed standards in the early implementation years of the program, in any weight class or duty cycle.  We also learned how the effectiveness of tire rolling resistance and weight reduction vary in GEM (i.e. and therefore likely in actual operation) across the different subcategories.  We also found that a vehicle with a deeply integrated conventional powertrain, tires with even lower CRR, some weight reduction, and stop-start idle reduction could achieve the MY 2027 proposed standards.  However, our technology feasibility does not presume that 100 percent of vocational vehicles can reasonably apply deep powertrain integration, nor do we project 100 percent adoption of LRR tires or weight reduction.
The technologies assumed for the benchmarked vehicles are summarized in Table V-13, Table V-14, and Table V-15.  Note that the agencies are not projecting that these are the vehicles that would actually be produced.  Rather, these theoretical vehicles are being evaluated to compare the relative stringency of the standards for each subcategory.
Table V-13: GEM Inputs for Benchmarked MY 2021 Vocational Vehicles
                                  Class 2b-5
                                   Class 6-7
                                    Class 8
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                 Transmission
 100% Deep Transmission Integration for 7% Urban, 6% Multipurpose, 5% Regional
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                    10s AMT
                                 CI Engine[a]
                           2021 MY 7L, 200 hp Engine
                           2021 MY 7L, 270 hp Engine
                          2021 MY 11L, 345 hp Engine
                           2021 MY 15L 455hp Engine
                      100% Idle Reduction = Neutral Idle
                     100% improved axle lubrication: 0.5% 
                  100% Steer Tires with CRR 6.9 kg/metric ton
                  100% Drive Tires with CRR 7.3 kg/metric ton
                            Weight Reduction 200 lb
Note:
[a] SI engines were not simulated in GEM

Table V-14: GEM Inputs for Benchmarked MY 2024 Vocational Vehicles
                                  Class 2b-5
                                   Class 6-7
                                    Class 8
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                 Transmission
 100% Deep Transmission Integration for 7% Urban, 6% Multipurpose, 5% Regional
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                    10s AMT
                                 CI Engine[a]
                           2024 MY 7L, 200 hp Engine
                           2024 MY 7L, 270 hp Engine
                          2024 MY 11L, 345 hp Engine
                           2024 MY 15L 455hp Engine
                      100% Idle Reduction = Neutral Idle
                     100% improved axle lubrication: 0.5% 
                  100% Steer Tires with CRR 6.7 kg/metric ton
                  100% Drive Tires with CRR 7.1 kg/metric ton
                            Weight Reduction 200 lb
Note:
[a] SI engines were not simulated in GEM
Table V-15: GEM Inputs for Benchmarked MY 2027 Vocational Vehicles
                                  Class 2b-5
                                   Class 6-7
                                    Class 8
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                 Transmission
 100% Deep Transmission Integration for 7% Urban, 6% Multipurpose, 5% Regional
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                     5s AT
                                    10s AMT
                                 CI Engine[a]
                           2027 MY 7L, 200 hp Engine
                           2027 MY 7L, 270 hp Engine
                          2027 MY 11L, 345 hp Engine
                           2027 MY 15L 455hp Engine
                       100% Idle Reduction = Stop-Start
                  100% Steer Tires with CRR 6.4 kg/metric ton
                  100% Drive Tires with CRR 7.0 kg/metric ton
                            Weight Reduction 200 lb
Note:
[a] SI engines were not simulated in GEM
Next we identified the best performing baseline vehicle in each weight class group (one for HHD, one for MHD and one for LHD) and normalized the baseline GEM results to the performance of that vehicle.  A complete description of this normalization process is found in the draft RIA Chapter 2.  We then applied our actual projected technology adoption rates, including hybrid powertrains and stop-start idle reduction, to normalized-benchmarked vehicles in each of the nine subcategories.  The proposed standards then were calculated by multiplying the normalized baseline vehicle GEM result by an average percent improvement for each weight class group.  For example, the GEM results from applying the projected technology mix for MY 2021 MHD CI vocational vehicles were a 5 percent improvement in the Regional MHD subcategory, 7 percent improvement in the MHD Multipurpose subcategory, and 8 percent improvement in the MHD Urban subcategory.  To achieve standards with equivalent stringency, we multiplied each normalized baseline vehicle's GEM performance by the numerical average of those simulated improvements, 6.6 percent.  Without comparable stringency across the subcategories, manufacturers could have an incentive to select a subcategory strategically to have a less stringent standard, rather than certify vehicles in the subcategory that best matches the vehicles' expected use patterns.  By setting the standards at the same percent reduction from each weight class group of normalized-benchmarked vehicles, we would expect to minimize any incentive for a manufacturer to certify a vocational vehicle in an inappropriate subcategory.  
We request comment on using this approach to normalize the standards.  Commenters are encouraged to address both the approach in general and the specific technology assumed for the benchmark vehicles.
We are aware that in this approach, some of the projected technology packages would not provide a direct path to compliance for manufacturers, such as in the example above of the MHD Regional vehicle.  Using the technologies adopted at projected rates, it would fall short of the standard by 1.5 percent.  The agencies believe that the Phase 2 program has enough regulatory flexibility (averaging, banking, and trading provisions in particular) to enable such a vehicle to be certified.  
In the package descriptions that follow, individual technology costs are not presented, rather these can be found in the draft RIA Chapter 2.9 and 2.12.  Section V. C. (2) (d) includes the costs estimated for packages of technologies the agencies project would enable vocational vehicles to meet the proposed Phase 2 standards.
Transmission Packages
The agencies project that 30 percent of vocational vehicles would have one or more of the transmission technologies identified above in this section applied by MY 2021, increasing to nearly 60 percent by MY 2024 and over 80 percent by MY 2027.  Most of this increase is due to a projected increase in adoption of technologies that represent deep driveline integration.  The agencies project an adoption rate of 15 percent in MY 2021 and 30 percent in MY 2024 for manufacturers using the powertrain test to be recognized for non-hardware upgrades such as gear efficiencies, shift strategies, and torque converter lockups, as well as other technologies that enable driveline optimization.  Due to the relatively high efficiency gains available from driveline optimization for relatively low costs, the agencies are projecting a 70 percent application rate of driveline optimization by MY 2027 across all subcategories.  We do not have information about the extent to which integration may be deterred by barriers to information-sharing between component suppliers.  Therefore we are projecting that major manufacturers would work to overcome these barriers, integrate and optimize their drivelines, and use the powertrain test on all eligible configurations, while smaller manufacturers may not adopt these technologies at all, or not to a degree that they would find value in this optional test procedure.
For the technology of adding two gears, we are predicating the proposed MY 2021 standard on a five percent adoption rate, except zero in the HHD Regional subcategory, which is modeled with a 10-speed transmission.  This adoption rate is projected to essentially remain at this level throughout the program, with an increase to ten percent only for two subcategories (Regional LHD and MHD) in MY 2027.  This is because the manufacturers most likely to develop 8-speed transmissions are those that are also developing transmissions for HD pickups and vans, and the GEM-certified vocational market share among those manufacturers is relatively small.  
The HHD Regional subcategory is the only one where we assume a manual transmission in the baseline configuration.  For these vehicles, the agencies project upgrades to electronic transmissions such as either AMT, DCT, or automatic, at collective adoption rates of 51 percent in MY 2021, 68 percent in MY 2024, and five percent in MY 2027.  The decrease in MY 2027 reflects a projection that a greater number of deeply integrated HHD powertrains would be used by MY 2027 (one consequence being that fewer HHD powertrains would be directly simulated in GEM in that year).  The larger numbers in the phase-in years reflect powertrains that have been automated or electrified but not deeply integrated.  The agencies have been careful to account for the cost of both electrifying and deeply integrating the MY 2027 powertrains.  In draft RIA Chapter 11, the technology adoption rates for the HHD Regional subcategory presented in Table 11-42, Table 11-45, and Table 11-48 account for the assumption that a manual transmission cannot be deeply integrated, so there must also be an automation upgrade.  These tables are inputs to the agencies' cost analysis, thus the costs of both upgrading and integrating HHD powertrains are included.  The adoption rates of the upgraded but not integrated transmission architectures represent a projection of three percent of all vocational vehicles in MY 2021 and four percent in MY 2024.  This is based on an estimate that seven percent of the vocational vehicles would be in the HHD Regional subcategory.  For more information about the assumptions that were made about the populations of vehicles in different subcategories, see the agencies' inventory estimates in draft RIA Chapter 5.  
In the eight subcategories in which automatic transmissions are the base technology, the agencies project that five percent would upgrade to a dual clutch transmission in MY 2021.  This projection increases to 15 percent in MY 2024 and decreases in MY 2027 to ten percent for two subcategories (Regional LHD and MHD) and five percent for the remaining 6 subcategories.  The low projected adoption rates of DCT reflect the fact that this is a relatively new technology for the heavy-duty sector, and it is likely that broader market acceptance would be achieved once fleets have gained experience with the technology.  Similar to the pattern described for the HHD Regional subcategory, the decrease in MY 2027 reflects a projection of greater use of deeply integrated powertrains.  
In setting the proposed standard stringency, we have projected that hybrids on vehicles certified in the Multipurpose subcategories would achieve on average 22 percent improvement, and those in the Urban subcategories would see a 25 percent improvement.  We have also projected zero hybrid adoption rate by vehicles in the Regional subcategories, expecting that the benefit of hybrids for those vehicles would be too low to merit use of that type of technology.  However, there is no fixed hybrid value assigned in GEM and the actual improvement over the applicable test cycle would be determined by powertrain testing.  By the full implementation year of MY 2027, the agencies are projecting an overall vocational vehicle adoption rate of ten percent hybrids, which we estimate would be 18 percent of vehicles certified in the Multi-Purpose and Urban subcategories.  We are projecting a low adoption rate in the early years of the Phase 2 program, just four percent in these subcategories in MY 2021, and seven percent in MY 2024 for vehicles certified in the Multi-Purpose and Urban subcategories.  Based on our assumptions about the populations of vehicles in different subcategories, these hybrid adoption rates are about two percent overall in MY 2021 and four percent overall in MY 2024.
Considering the combination of the above technologies and adoption rates, we project the CO2 and fuel efficiency improvements for all transmission upgrades to be approximately seven percent on a fleet basis by MY 2027.  One subcategory in which we are projecting a very large advanced transmission adoption rate is the HHD Regional subcategory, in which we are projecting 75 percent of the transmissions would be either automated or automatic (upgraded from a manual) with 70 percent of those also being deeply integrated by MY 2027.  By comparison, the agencies are projecting that HHD day cab tractors would have 90 percent adoption of automated or automatic transmissions by MY 2027.  Although we are not prepared to predict what fraction of these would be upgraded in the absence of Phase 2, the draft RIA Chapter 2.9 explains why the agencies are confident that durable transmissions will be widely available in the Phase 2 time frame to support manufacture of HHD vocational vehicles.
If the above technologies do not reach the expected level of market adoption, the vocational vehicle Phase 2 program has several other technology options that manufacturers could choose to meet the proposed standards.
Axle Packages
The agencies project that 75 percent of vocational vehicles in all subcategories would adopt advanced axle lubricant formulations in all implementation years of the Phase 2 program.  Fuel efficient lubricant formulations are widespread across the heavy-duty market, though advanced synthetic formulations are currently less popular.  Axle lubricants with improved viscosity and efficiency-enhancing performance are projected to be widely adopted by manufacturers in the time frame of Phase 2.  Such formulations are commercially available and the agencies see no reason why they could not be feasible for most vehicles.  Nonetheless, we have refrained from projecting full adoption of this technology.  The agencies do not have specific information regarding reasons why axle manufacturers may specify a specific type of lubricant over another, and whether advanced lubricant formulations may not be recommended in all cases.  The agencies request comment on information regarding any vocational vehicle applications for which use of advanced lubricants would not be feasible.
The agencies estimate that 45 percent of HHD Regional vocational vehicles would adopt either full time or part time 6x2 axle technology in MY 2021.  This technology is most likely to be applied to Class 8 vocational vehicles (with 2 rear axles) that are designed for frequent highway trips.  The agencies project a slightly higher adoption rate of 60 percent combined for both full and part time 6x2 axle technologies in MY 2024 and MY 2027.  Based on our estimates of vehicle populations, this is about four percent of all vocational vehicles.
Tire Packages
The agencies estimate that the per-vehicle average level of rolling resistance from vocational vehicle tires could be reduced by 11 percent by full implementation of the Phase 2 program in MY 2027, based on the tire development achievements expected over the next decade.  This is estimated by weighting the projected improvements of steer tires and drive tires using an assumed axle load distribution of 30 percent on the steer tires and 70 percent on the drive tires, as explained in the draft RIA Chapter 2.9.  The projected adoption rates and expected improvements in CRR are presented in Table V-16.  By applying the assumed axle load distribution, the average vehicle CRR improvements projected for the proposed MY 2021 standards would be four percent, which we project would achieve up to one percent reduction in fuel use and CO2 emissions, depending on the vehicle subcategory.  Using that same method, the agencies estimate the average vehicle CRR in MY 2024 would be seven percent, yielding reductions in fuel use and CO2 emissions of between one and two percent, depending on the vehicle subcategory.  
The agencies understand that the vocational vehicle segment has access to a large variety of tires, including some that are designed for tractors, some that are designed for HD pickups and vans, and some with multiple use designations.  In spite of the likely availability of LRR tires during the Phase 2 program, the projected adoption rates are intended to be conservative.  The agencies believe that these tire packages recognize the variety of tire purposes and performance levels in the vocational vehicle market, and maintain choices for manufacturers to use the most efficient tires (i.e. those with least rolling resistance) only where it makes sense given these vehicles' differing purposes and applications. 
Table V-16 Projected LRR Tire Adoption Rates
Tire Position
Level of Rolling Resistance
MY 2021 Adoption Rate
MY 2024 Adoption Rate
MY 2027 Adoption Rate
Drive
Baseline CRR (7.7)
50
20
10
Steer
Baseline CRR (7.7)
20
10
0
Drive
5% Lower CRR (7.3)
50
50
25
Steer
10% Lower CRR (6.9)
80
30
20
Drive
10% Lower CRR (6.9)
0
30
50
Steer
15% Lower CRR (6.5)
0
60
30
Drive
15% Lower CRR (6.5)
0
0
15
Steer
20% Lower CRR (6.2)
0
0
50
Drive
Average Improvement in CRR
3%
6%
9%
Steer
Average Improvement in CRR
8%
12%
17%
For comparison purposes, the reader may note that these levels of tire CRR generally correspond with levels of tire CRR projected for tractors built for the Phase 1 standards.  For example, the baseline level CRR for vocational tires is very similar to the baseline tractor steer tire CRR.  Vocational vehicle tires with 10 percent better CRR have a similar CRR level as tractor tires of Drive Level 1. Vocational vehicle tires with 15 percent better CRR have a similar CRR level as tractor tires of Steer Level 1.  Vocational vehicle tires with 20 percent better CRR have a similar CRR level as tractor tires of Drive Level 2, as described in Section III.D.2.
Idle Reduction Packages
In this proposal, we are projecting a progression of idle reduction technology development that begins with 70 percent adoption rate of neutral idle for the MY 2021 standards, which by MY 2027 is replaced by a 70 percent adoption rate of stop-start idle reduction technology.  Although it is possible that a vehicle could have both neutral idle and stop-start, we are only considering emissions reductions for vehicles with one or the other of these technologies.  Also, as the program phases in, we do not see a reduction in the projected adoption rate of neutral idle to be a concern in terms of stranded investment, because it is a very low cost technology that could be an enabler for stop-start systems in some cases.    
We are not projecting any adoption of neutral idle for the HHD Regional subcategory, because any vehicle with a manual transmission must shift to neutral when stopped to avoid stalling the engine, vehicles in the HHD Regional subcategory would already essentially be idling in neutral, and no additional technology would be needed to achieve this.  A similar case can be made for any vocational vehicle with an automated manual transmission, since these share inherently similar architectures with manuals.  The agencies are not projecting an adoption rate of 85 percent neutral idle until MY 2024, because it may take some additional development time to apply this technology to high-torque automatic transmissions designed for the largest vocational vehicles. Based on stakeholder input, the designs needed to avoid an uncomfortable re-engagement bump when returning to drive from neutral may require some engineering development time as well as some work to enable two-way communication between engines and transmissions.
We are projecting a five percent adoption rate of stop-start in the six MHD and LHD subcategories for MY 2021 and zero for the HHD vehicles, because this technology is still developing for vocational vehicles and is most likely to be feasible in the early years of Phase 2 for vehicles with lower power demands and lower engine inertia.  Stopping a heavy-duty engine is not challenging.  The real challenge is designing a robust system that can deliver multiple smooth restarts daily without loss of function while the engine is off.  Many current light-duty products offer this feature, and some heavy-duty manufacturers are exploring this.  The agencies are projecting an adoption rate of 15 percent stop-start across all subcategories in the intermediate year of MY 2024.  The agencies are projecting this technology to have a relatively high adoption rate (70 percent as stated above) by MY 2027 because we see it being technically feasible on the majority of vocational vehicles, and especially effective on those with the most time at idle in their workday operation.  Although we are not prepared to predict what fraction of vehicles would adopt stop-start in the absence of Phase 2, the draft RIA Chapter 2.9 explains why the agencies are confident that this technology, which is on the entry-level side of the hybrid and electrification spectrum, will be widely available in the Phase 2 time frame. 
Based on these projected adoption rates and the effectiveness values described above in this section, we expect overall GHG and fuel consumption reductions from workday idle on vocational vehicles to be approximately three percent in MY 2027.
Weight Reduction Packages
As described in the draft RIA Chapter 2.12, weight reduction is a relatively costly technology, at approximately $3 to $4 per pound for a 200-lb package.  Even so, for vehicles in service classes where dense, heavy loads are frequently carried, weight reduction can translate directly to additional payload.  The agencies project weight reduction would most likely be used for vocational vehicles in the refuse and construction service classes, as well as some regional delivery vehicles.  The agencies are predicating the proposed standards on an adoption rate of five to eight percent, depending on the subcategory, in MY 2027, with slightly lower adoption rates in MY 2021 and MY 2024.
For this technology package, NHTSA and EPA project manufacturers would use material substitution in the amount of 200 pounds.  An example of how this weight could be reduced would be a complete set of aluminum wheels for a Class 8 vocational vehicle, or an aluminum transmission case plus high strength steel wheels, frame rails, and suspension brackets on a MHD or LHD vocational vehicle.  The agencies have limited information about how popular the use of aluminum components is in the vocational vehicle sector.  We request comments with information on whether any lightweight vocational vehicle components are in such widespread use that we should exclude them from the list of components for which a GEM improvement value would be available. 
    GEM Inputs for Derivation of Proposed Vocational Vehicle Standards 
To derive the stringency of the proposed vocational vehicle standards, the agencies developed a suite of fuel consumption maps for use with the GEM: one set of maps that represent engines meeting the proposed MY 2021 vocational diesel engine standards, a second set of maps representing engines meeting the proposed MY 2024 vocational diesel engine standards, and a third set of maps representing engines meeting the proposed MY 2027 vocational diesel engine standards.  By incorporating the engine technology packages projected to be adopted to meet the proposed Phase 2 vocational CI engine standards, the agencies employed GEM engine models in deriving the stringency of the proposed Phase 2 CI-powered vocational vehicle standards.  As noted above, because the agencies did not have enough information to develop a robust GEM-based gasoline engine fuel map, the stringency of the proposed SI-powered vocational vehicle standards is derived as an adjustment from the CI-powered vocational vehicle standards.  See the draft RIA Chapter 2.9 for more details about this adjustment process.
Depending on the particular technology, either the effectiveness was assigned by the agencies using an accepted average value, or the GEM tool was used to assess the proposed technology effectiveness, as discussed above. The agencies derived a scenario vehicle for each subcategory using the adoption rate and assigned or modeled improvement values of transmission, axle, and idle reduction technologies.  For example, the MY 2021 CRR values for each subcategory scenario case were derived as follows: for steer tires - 20 percent times 7.7 plus 80 percent times 6.9 yields an average CRR of 7.1 kg/metric ton; and for drive tires - 50 percent times 7.7 plus 50 percent times 7.3 yields an average CRR of 7.5 kg/metric ton.  Similar calculations were done for weight reduction, transmission improvements, and axle improvements.  The set of tire CRR, idle reduction, weight reduction, engine and transmission input parameters that was modeled in GEM in support of the proposed MY 2021 vocational vehicle standards is shown in Table V-17.  The agencies derived the level of the proposed MY 2024 standards by using the tire, weight reduction, engine and transmission GEM inputs shown in Table V-18, below.  The agencies derived the level of the proposed MY 2027 standards by using the tire, weight reduction, engine and transmission GEM inputs shown in Table V-19, below.  As post-processing, the respective adoption rates and assigned improvement values of transmission, axle, and idle reduction technologies were calculated for each subcategory.
The agencies have not directly transferred the GEM results from these inputs as the proposed standards.  Rather, the proposed standards are the result of the normalizing and benchmarking analysis described above. The proposed standards are presented in Table V-4 through Table V-9.  Additional detail is provided in the RIA Chapter 2.9.
Table V-17: GEM Inputs Used to Derive Proposed MY 2021 Vocational Vehicle Standards
                                  Class 2b-5
                                   Class 6-7
                                    Class 8
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                 CI Engine[a]
                           2021 MY 7L, 200 hp Engine
                           2021 MY 7L, 270 hp Engine
                          2021 MY 11L, 345 hp Engine
                           2021 MY 15L 455hp Engine
                       Transmission (improvement factor)
                                     0.023
                                     0.021
                                     0.008
                                     0.023
                                     0.021
                                     0.009
                                     0.023
                                     0.022
                                     0.022
                           Axle (improvement factor)
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.012
                          Stop-Start (adoption rate)
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      5%
                                      0%
                                      0%
                                      0%
                         Neutral Idle (adoption rate)
                                      70%
                                      70%
                                      70%
                                      70%
                                      70%
                                      70%
                                      70%
                                      70%
                                      0%
                        Steer Tires (CRR kg/metric ton)
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                        Drive Tires (CRR kg/metric ton)
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                             Weight Reduction (lb)
                                       8
                                       8
                                      14
                                       8
                                       8
                                      12
                                       8
                                       8
                                      10
Note:
[a] SI engines were not simulated in GEM, rather a gas/diesel adjustment factor was applied to the results

Table V-18: GEM Inputs Used to Derive Proposed MY 2024 Vocational Vehicle Standards
                                  Class 2b-5
                                   Class 6-7
                                    Class 8
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                 CI Engine[a]
                           2024 MY 7L, 200 hp Engine
                           2024 MY 7L, 270 hp Engine
                          2024 MY 11L, 345 hp Engine
                           2024 MY 15L 455hp Engine
                       Transmission (improvement factor)
                                     0.045
                                     0.04
                                     0.017
                                     0.045
                                     0.041
                                     0.018
                                     0.045
                                     0.042
                                     0.035
                           Axle (improvement factor)
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.014
                          Stop-Start (adoption rate)
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                                      15%
                         Neutral Idle (adoption rate)
                                      85%
                                      85%
                                      85%
                                      85%
                                      85%
                                      85%
                                      85%
                                      85%
                                      0%
                        Steer Tires (CRR kg/metric ton)
                                      6.8
                                      6.8
                                      6.8
                                      6.8
                                      6.8
                                      6.8
                                      6.8
                                      6.8
                                      6.8
                        Drive Tires (CRR kg/metric ton)
                                      7.3
                                      7.3
                                      7.3
                                      7.3
                                      7.3
                                      7.3
                                      7.3
                                      7.3
                                      7.3
                             Weight Reduction (lb)
                                       8
                                       8
                                      14
                                       8
                                       8
                                      12
                                       8
                                       8
                                      10
Note:
[a] SI engines were not simulated in GEM, rather a gas/diesel adjustment factor was applied to the results

Table V-19: GEM Inputs Used to Derive Proposed MY 2027 Vocational Vehicle Standards
                                  Class 2b-5
                                   Class 6-7
                                    Class 8
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                 CI Engine[a]
                           2027 MY 7L, 200 hp Engine
                           2027 MY 7L, 270 hp Engine
                          2027 MY 11L, 345 hp Engine
                           2027 MY 15L 455hp Engine
                       Transmission (improvement factor)
                                     0.096
                                     0.085
                                     0.034
                                     0.096
                                     0.088
                                     0.037
                                     0.097
                                     0.089
                                     0.036
                           Axle (improvement factor)
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.014
                          Stop-Start (adoption rate)
                                      75%
                                      70%
                                      70%
                                      75%
                                      70%
                                      70%
                                      70%
                                      70%
                                      70%
                         Neutral Idle (adoption rate)
                                      25%
                                      30%
                                      30%
                                      25%
                                      30%
                                      30%
                                      30%
                                      30%
                                      0%
                        Steer Tires (CRR kg/metric ton)
                                      6.4
                                      6.4
                                      6.4
                                      6.4
                                      6.4
                                      6.4
                                      6.4
                                      6.4
                                      6.4
                        Drive Tires (CRR kg/metric ton)
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                                      7.0
                             Weight Reduction (lb)
                                      10
                                      10
                                      16
                                      10
                                      10
                                      14
                                      10
                                      10
                                      12
Note:
[a] SI engines were not simulated in GEM, rather a gas/diesel adjustment factor was applied to the results
    Technology Package Costs
The agencies have estimated the costs of the technologies that could be used to comply with the proposed standards.  The estimated costs are shown in Table V-20 for MY2021, in Table V-21 for MY2024, and Table V-22 for MY 2027.  Fleet average costs are shown for light, medium and heavy HD vocational vehicles in each duty-cycle-based subcategory  -  Urban, Multi-Purpose, and Regional.  As shown in Table V-20, in MY 2021 these range from approximately $600 for MHD and LHD Regional vehicles, up to $3,400 for HHD Regional vehicles.  Those two lower-cost packages reflect zero hybrids, and the higher-cost package reflects significant adoption of automated transmissions.   In the draft RIA Chapter 2.13.2, the agencies present vocational vehicle technology package costs differentiated by MOVES vehicle type.  For example, intercity buses are estimated to have an average package cost of $2,900 and gasoline motor homes are estimated to have an average package cost of $450 in MY 2021.  These costs do not indicate the per-vehicle cost that may be incurred for any individual technology.  For more specific information about the agencies' estimates of per-vehicle costs, please see the draft RIA Chapter 2.12.  For example, Chapter 2.12.7 describes why a complex technology such as hybridization is estimated to range between $15,000 and $40,000 per vehicle for vocational vehicles in MY 2021.  The engine costs listed represent the cost of an average package of diesel engine technologies.  Individual technology adoption rates for engine packages are described in Section II.D.  The details behind all these costs are presented in draft RIA Chapter 2.12, including the markups and learning effects applied and how the costs shown here are weighted to generate an overall cost for the vocational segment.  
Table V-20:  Vocational Vehicle Technology Incremental Costs for the Proposal in the 2021 Model Year[a,b] (2012$)

Light HD
Medium HD
Heavy HD

Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Engine[c]
                                                                           $293
                                                                           $293
                                                                           $293
                                                                           $270
                                                                           $270
                                                                           $270
                                                                           $270
                                                                           $270
                                                                           $270
Tires
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
Transmission
                                                                            $81
                                                                            $81
                                                                            $81
                                                                            $81
                                                                            $81
                                                                            $81
                                                                            $81
                                                                            $81
                                                                         $2,852
Axle related
                                                                            $99
                                                                            $99
                                                                            $99
                                                                            $99
                                                                            $99
                                                                            $99
                                                                           $148
                                                                           $148
                                                                           $219
Weight Reduction
                                                                            $27
                                                                            $27
                                                                            $48
                                                                            $27
                                                                            $27
                                                                            $41
                                                                            $27
                                                                            $27
                                                                            $34
Idle reduction
                                                                            $49
                                                                            $49
                                                                            $49
                                                                            $51
                                                                            $51
                                                                            $51
                                                                             $6
                                                                             $6
                                                                             $0
Electrification & hybridization
                                                                           $547
                                                                           $547
                                                                             $0
                                                                           $861
                                                                           $861
                                                                             $0
                                                                         $1,437
                                                                         $1,437
                                                                             $0
Air Conditioning[d]
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
Total
                                                                         $1,125
                                                                         $1,125
                                                                           $598
                                                                         $1,418
                                                                         $1,418
                                                                           $571
                                                                         $1,998
                                                                         $1,998
                                                                         $3,404
Notes:
[a] Costs shown are for the 2021 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated vehicle classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9 in particular).
[c] Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting no additional costs beyond Phase 1 for gasoline vocational engines.
[d] EPA's air conditioning standards are presented in Section V.C above.

The estimated fleet average vocational vehicle package costs are shown in Table V-21 for MY2024.  As shown, these range from approximately $800 for MHD and LHD Regional vehicles, up to $4,800 for HHD Regional vehicles.  The increased costs above the MY 2021 values reflect increased adoption rates of individual technologies, while the individual technology costs are generally expected to remain the same or decrease, as explained in the draft RIA Chapter 2.12.  For example, Chapter 2.12.7 presents MY 2024 hybridization costs that range from $13,000 to $33,000 per vehicle for vocational vehicles.  The engine costs listed represent the average costs associated with the proposed MY 2024 vocational diesel engine standard described in Section II.D. 

Table V-21:  Vocational Vehicle Technology Incremental Costs for the Proposal in the 2024 Model Year[a][,b] (2012$)

Light HD
Medium HD
Heavy HD

Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Engine[c]
                                                                           $437
                                                                           $437
                                                                           $437
                                                                           $405
                                                                           $405
                                                                           $405
                                                                           $405
                                                                           $405
                                                                           $405
Tires
                                                                            $17
                                                                            $17
                                                                            $17
                                                                            $17
                                                                            $17
                                                                            $17
                                                                            $23
                                                                            $23
                                                                            $23
Transmission
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
                                                                           $123
                                                                         $3,915
Axle related
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                           $136
                                                                           $136
                                                                           $224
Weight Reduction
                                                                            $24
                                                                            $24
                                                                            $43
                                                                            $24
                                                                            $24
                                                                            $37
                                                                            $24
                                                                            $24
                                                                            $30
Idle reduction
                                                                           $119
                                                                           $119
                                                                           $119
                                                                           $125
                                                                           $125
                                                                           $125
                                                                           $224
                                                                           $224
                                                                           $217
Electrification & hybridization
                                                                           $906
                                                                           $906
                                                                             $0
                                                                         $1,423
                                                                         $1,423
                                                                             $0
                                                                         $2,377
                                                                         $2,377
                                                                             $0
Air Conditioning[d]
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
Total
                                                                         $1,737
                                                                         $1,737
                                                                           $849
                                                                         $2,228
                                                                         $2,228
                                                                           $817
                                                                         $3,332
                                                                         $3,332
                                                                         $4,834
Notes:
[a] Costs shown are for the 2024 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated vehicle classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9 in particular).
[c] Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting no additional costs beyond Phase 1 for gasoline vocational engines.
[d] EPA's air conditioning standards are presented in Section V.C above.

The estimated fleet average vocational vehicle package costs are shown in Table V-22 for MY2027.  As shown, these range from approximately $1,400 for MHD and LHD Regional vehicles, up to $7,400 for HHD Urban and Multipurpose vehicles.  These two subcategories are projected to have the higher-cost packages in MY 2027 due to an estimated 18 percent adoption of HHD hybrids, which are estimated to cost $31,000 per vehicle in MY 2027, as shown in Chapter 2.12.7 of the draft RIA.   These per-vehicle technology package costs were averaged using our projections of vehicle populations in the nine regulatory subcategories and do not correspond to the MOVES vehicle types.  The engine costs shown represent the average costs associated with the proposed MY 2027 vocational diesel engine standard described in Section II.D.  For gasoline vocational vehicles, the agencies are projecting adoption of Level 2 engine friction reduction with an estimated $68 added to the average SI vocational vehicle package cost in MY 2027, which represents about 56 percent of those vehicles upgrading beyond Level 1 engine friction reduction.  Further details on how these SI vocational vehicle costs were estimated are provided in the draft RIA Chapter 2.9.    
Purchase prices of vocational vehicles can range from $60,000 for a stake-bed landscape truck to over $400,000 for some transit buses.  The costs of the vocational vehicle standards can be put into perspective by considering package costs estimated using MOVES vehicle types along with typical prices for those vehicles.  For example, a package cost of $4,000 on a $60,000 short haul straight truck would represent an incremental increase of about six percent of the vehicle purchase price.  Similarly, a package cost of $7,000 on a $200,000 refuse truck would represent an incremental increase of less than four percent of the vehicle purchase price.  The vocational vehicle industry characterization report in the docket includes additional examples of vehicle prices for a variety of vocational applications. 
Table V-22:  Vocational Vehicle Technology Incremental Costs for the Proposal in the 2027 Model Year[a][,b] (2012$)

Light HD
Medium HD
Heavy HD

Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Engine[c]
                                                                           $471
                                                                           $471
                                                                           $471
                                                                           $437
                                                                           $437
                                                                           $437
                                                                           $437
                                                                           $437
                                                                           $437
Tires
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $29
                                                                            $29
                                                                            $29
Transmission
                                                                           $244
                                                                           $244
                                                                           $267
                                                                           $244
                                                                           $244
                                                                           $267
                                                                           $244
                                                                           $244
                                                                         $2,986
Axle related
                                                                            $86
                                                                            $86
                                                                            $86
                                                                            $86
                                                                            $86
                                                                            $86
                                                                           $129
                                                                           $129
                                                                           $215
Weight Reduction
                                                                            $29
                                                                            $29
                                                                            $46
                                                                            $29
                                                                            $29
                                                                            $40
                                                                            $29
                                                                            $29
                                                                            $35
Idle reduction
                                                                           $498
                                                                           $499
                                                                           $499
                                                                           $526
                                                                           $526
                                                                           $526
                                                                           $964
                                                                           $964
                                                                           $962
Electrification & hybridization
                                                                         $2,122
                                                                         $2,122
                                                                             $0
                                                                         $3,336
                                                                         $3,336
                                                                             $0
                                                                         $5,571
                                                                         $5,571
                                                                             $0
Air Conditioning[d]
                                                                            $19
                                                                            $19
                                                                            $19
                                                                            $19
                                                                            $19
                                                                            $19
                                                                            $19
                                                                            $19
                                                                            $19
Total
                                                                         $3,489
                                                                         $3,490
                                                                         $1,407
                                                                         $4,696
                                                                         $4,696
                                                                         $1,395
                                                                         $7,422
                                                                         $7,422
                                                                         $4,682
Notes:
[a] Costs shown are for the 2027 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated vehicle classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9 in particular).
[c] Engine costs are shown for a light HD, medium HD or heavy HD diesel engine. For gasoline-powered vocational vehicles we are projecting $68 of additional engine-based costs beyond Phase 1.
[d] EPA's air conditioning standards are presented in Section V.C above.

Consistency of the Proposed Vocational Vehicle Standards with the Agencies' Legal Authority
NHTSA and EPA project the proposed standards to be achievable within known design cycles, and we believe these standards, although technology-forcing, would allow many different paths to compliance in addition to the example outlined in this section.  The proposed standards are predicated on manufacturers implementing technologies that we expect will be available in the time frame of these proposed rules, although in some instances these technologies are still under development or not widely deployed in the current vocational vehicle fleet.  Under the proposal, manufacturers would need to apply a range of technologies to their vocational chassis, which the agencies believe would consistent with the agencies' respective statutory authorities.  We are projecting that most vehicles could adopt certain of the technologies.  For example, we project a 70 to 75 percent application rate for stop-start idle reduction and advanced axle lubrication.  However, for other technologies, such as strong hybrids and weight reduction, we are projecting adoption rates of ten percent or less overall, with individual subcategories having adoption rates greater or less than this.  The proposed standards offer manufacturers the flexibility to apply the technologies that make sense for their business and customer needs.  
As discussed above, average per-vehicle costs associated with the proposed 2027 MY standards are projected to be generally less than six percent of the overall price of a new vehicle.  The cost-effectiveness of these proposed vocational vehicle standards in dollars per ton is similar to the cost effectiveness estimated for light-duty trucks in the 2017-2025 light duty greenhouse gas standards, which the agencies have found to be highly cost effective.  In addition, the vocational vehicle standards are clearly effective from a net benefits perspective (see draft RIA Chapter 11.2).  Therefore, the agencies regard the cost of the proposed standards as reasonable.
The agencies note that while the projected costs are significantly greater than the costs projected for Phase 1, we still consider these costs to be reasonable, especially given that the first vehicle owner may see the technologies pay for themselves in many cases.  As discussed above, the usual period of ownership for a vocational vehicle reflects a lengthy trade cycle that may often exceed seven years.  For most vehicle types evaluated, the cost of these technologies, if passed on fully to customers, would be recovered within five years or less due to the associated fuel savings, as shown in the payback analysis included in Section IX and in the draft RIA Chapter 7.1.  Specifically, in Table 7-30 of the draft RIA Chapter 7.1.3, a summary is presented with estimated payback periods for each of the MOVES vocational vehicle types, using the annual vehicle miles traveled from the MOVES model for each vehicle type.  As shown, the vocational vehicle type with the shortest payback would be intercity buses (less than one year), while most other vehicles (with the exception of school buses and motor homes) are projected to see paybacks in the fifth year or sooner.
The agencies note further that although the proposal is technology-forcing (especially with respect to driveline improvements) and the estimated costs for each subcategory vary considerably (by a factor of five in some cases), these costs represent only one of many possible pathways to compliance for manufacturers.  Manufacturers retain leeway to develop alternative compliance paths, increasing the likelihood of the standards' successful implementation.  Based on available information, the agencies believe the proposed standards are technically feasible within the lead time provided, are cost effective while accounting for the fuel savings (see draft RIA Chapter 7.1.4), and have no apparent adverse collateral potential impacts (e.g., there are no projected negative impacts on safety or vehicle utility).
The proposed standards thus appear to represent a reasonable choice under Section 202(a) of the CAA and the maximum feasible under NHTSA's EISA authority at 49 U.S.C. 32902(k)(2).  The agencies believe that the proposed standards are consistent with their respective authorities.  Based on the information currently before the agencies, we believe that the preferred alternative would be maximum feasible and reasonable for the vocational segment with a progression of standards reaching full implementation in MY 2027.
Nevertheless, as discussed in Section V. D. (1) and in Section X (Alternatives), the agencies seek comment on the feasibility of Alternative 4 , which the agencies may determine is maximum feasible and reasonable depending on comments and information received during the comment period.  This alternative is discussed in detail below because it may be possible for manufacturers to accelerate product development cycles enough to reach the required levels by the 2024 model year.  Thus, the agencies may conclude in the final rules that Alternative 4, or some elements of this alternative, would be maximum feasible and appropriate under CAA section 202 (a)(1) and (2), depending on information and comments received.  The agencies seek comments to assist us in making that determination.  
Alternative Vocational Vehicle Standards Considered
The agencies have analyzed vocational vehicle standards other than the proposed standards.  These alternatives, listed in Table III-22, are described in detail in Section X of this preamble and the draft RIA Chapter 11.  Below the agencies present a detailed analysis of the vocational vehicle alternative referred to as Alternative 4.
Table V-23: Summary of Alternatives Considered for the Proposed Rulemaking
Alternative 1
No action alternative
Alternative 2
Less stringent than the proposed alternative, applying off-the-shelf technologies
Alternative 3 
(Proposed Alternative)
Proposed alternative fully phased-in by MY 2027
Alternative 4
Same stringency as proposed alternative, except phasing in faster, by MY 2024
Alternative 5
More stringent alternative, based on higher adoption rates of advanced technologies
         Feasibility of Alternative 4
NHTSA and EPA are considering an Alternative 4 that achieves the same level of stringency as the preferred alternative, except it would provide less lead time, reaching its most stringent level three years earlier than the preferred alternative, that is in MY 2024.  The agencies project that the same selection of technology options would be available to manufacturers regardless of what alternative is chosen.  The preferred alternative would allow greater lead time to manufacturers to select and develop technologies for their vehicles. 
The agencies have outstanding questions regarding relative risks and benefits of Alternative 4 due to the time frame envisioned by that alternative.  If the agencies receive relevant information supporting the feasibility of Alternative 4, the agencies may consider establishing vocational vehicle standards that provide more overall reductions than what we are proposing if we deem them to be maximum feasible and reasonable for NHTSA and EPA, respectively.  See the draft RIA Chapter 11.2.2 for a summary of costs and benefits that compares the proposed Phase 2 vocational vehicle program with the costs and benefits of other vocational vehicle alternatives considered.  
In the paragraphs that follow, the agencies present the derivation of the Alternative 4 vocational vehicle standards.  For currently developing technologies where we project an adoption rate that could present potential risks or challenges, we seek comment on the cost and effectiveness of such technology.  Further, the agencies seek comment on the potential for adoption of developing technologies into the vocational vehicle fleet, as well as the extent to which the more accelerated alternative vocational vehicle standards may depend on such technology.
    Adoption Rates for Derivation of Alternative 4 Vocational Vehicle Standards
In developing the Alternative 4 standards, the agencies are projecting a set of technology packages in MY 2024 that is identical to those projected for the final phase-in year of the preferred alternative.  Because these are the same for each subcategory, the GEM inputs modeled to derive the level of the MY 2024 Alternative 4 standards can be found in Table V-19, which presents the GEM inputs used to derive the level of the MY 2027 proposed standards.  In the package descriptions below, the agencies outline technology-specific adoption rates in MY 2021 for Alternative 4 and offer insights on what market conditions could enable reaching adoption rates that would achieve the full implementation levels of stringency with less lead time. 
For transmissions including hybrids, the agencies project for Alternative 4 that 50 percent of vocational vehicles would have one or more of the transmission technologies identified above in this section applied by MY 2021.  This includes 25 percent deeply integrated conventional transmissions that would be recognized over the powertrain test, 10 percent DCT, 11 percent adding two gears (except zero for HHD Regional), and nine percent hybrids for vehicles certified in the Multi-Purpose and Urban subcategories, which we estimate would be five percent overall.  In this alternative, the agencies project 21 percent of the vocational vehicles with manual transmissions in the HHD Regional subcategory would upgrade to either an AMT, DCT, or automatic transmission.  The increased projection of driveline integration would mean that more manufacturers would need to overcome data-sharing barriers.  In this alternative, we project that manufacturers would need to conduct additional research and development to achieve overall application of five percent hybrids.  In the draft RIA Chapter 7.1, the agencies have estimated costs for this additional accelerated research. Comments are requested on the expected costs to accelerate hybrid development to meet the projected adoption rates of this alternative.
For advanced axle lubricants, the agencies are projecting the same 75 percent adoption rate in MY 2021 as in the proposed program.  For part time or full time 6x2 axles, the agencies project the HHD Regional vocational vehicles could apply this at the 60 percent adoption rate in MY 2021, where this level wouldn't be reached until MY 2024 in the proposed program. One action that could enable this to be achieved is if information on the reliability of these systems were to be disseminated to more fleet owners by trustworthy sources.
For lower rolling resistance tires in this alternative, the agencies project the same adoption rates of LRR tires as in the proposed program for MY 2021, because we don't expect tire suppliers would be able to make greater improvements for the models that are fitted on vocational vehicles in that time frame.  The tire research that is being conducted currently is focused on models for tractors and trailers, and we project further improved LRR tires would not be commercially available for vocational vehicles in the early implementation years of Phase 2.
For the adoption rate of LRR tires in MY 2024 to reach the level projected for MY 2027 in the proposed program, tire suppliers could promote their most efficient products to vocational vehicle manufacturers to achieve equivalent improvements with less lead time.  Depending on how tire manufacturers focus their research and product development, it is possible that more of the LRR tire advancements being applied for tractors and trailers could be applied to vocational vehicles. To see the specific projected adoption rates of different levels of LRR tires for Alternative 4, see columns three and five of Table V-16 above.
For workday idle technologies, the agencies project an adoption rate of 12 percent stop-start in the six MHD and LHD subcategories for MY 2021 and zero for the HHD vehicles, on the expectation that manufacturers would have fewer challenges in the short term in bringing this technology to market for vehicles with lower power demands and lower engine inertia.  In this alternative, the agencies project the overall workday idle adoption rate would approach 100 percent, such that any vehicle without stop-start (except HHD Regional) would apply neutral idle in MY 2021.  These adoption raters consider a more aggressive investment by manufacturers in developing these technologies.  Estimates of research and development costs for this alternative are presented in the draft RIA Chapter 7.1.
For weight reduction, in this alternative, the agencies project the same adoption rates of a 200-lb lightweighting package as in the proposal for each subcategory in MY 2021, which is four to seven percent.
Table V-24 shows the GEM inputs used to derive the level of the Alternative 4 MY 2021 standards. 
Table V-24: GEM Inputs Used to Derive Alternative 4 MY 2021 Vocational Vehicle Standards
                                  Class 2b-5
                                   Class 6-7
                                    Class 8
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                                     Urban
                                 Multi-Purpose
                                   Regional
                          Alternative 4 CI Engine[a]
                           2021 MY 7L, 200 hp Engine
                           2021 MY 7L, 270 hp Engine
                          2021 MY 11L, 345 hp Engine
                           2021 MY 15L 455hp Engine
                       Transmission (improvement factor)
                                     0.045
                                     0.04
                                     0.014
                                     0.045
                                     0.041
                                     0.015
                                     0.045
                                     0.041
                                     0.018
                           Axle (improvement factor)
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.004
                                     0.015
                          Stop-Start (adoption rate)
                                      12%
                                      12%
                                      12%
                                      12%
                                      12%
                                      12%
                                      0%
                                      0%
                                      0%
                         Neutral Idle (adoption rate)
                                      88%
                                      88%
                                      88%
                                      88%
                                      88%
                                      88%
                                      90%
                                      90%
                                      0%
                        Steer Tires (CRR kg/metric ton)
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                                      7.1
                        Drive Tires (CRR kg/metric ton)
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                                      7.5
                             Weight Reduction (lb)
                                       8
                                       8
                                      14
                                       8
                                       8
                                      12
                                       8
                                       8
                                      10
Note:
[a] SI engines were not simulated in GEM, rather a gas/diesel adjustment factor was applied to the results.
    Possible Alternative 4 Standards
Because the MY 2024 Alternative 4 standards are the same as the proposed standards for MY 2027 for each subcategory, these numerical standards can be found in Table V-8 and Table V-9, which present EPA's and NHTSA's proposed MY 2027 standards, respectively.  Table V-25 and Table V-26 present the Alternative 4 vocational vehicle standards for the initial year of MY 2021.  These represent incremental improvements over the MY 2017 baseline of six to seven percent for SI-powered vocational vehicles and nine percent for CI-powered vocational vehicles.
Table V-25: Alternative 4 EPA CO2 Standards for MY2021 Class 2b-8 Vocational Vehicles 
Alternative EPA Standard for Vehicle with CI Engine Effective MY2021 (gram CO2/ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
288
183
193
Multi-Purpose
297
185
196
Regional
309
181
185
Alternative EPA Standard for Vehicle with SI Engine Effective MY2021 (gram CO2/ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
313
199
210
Multi-Purpose
323
201
212
Regional
336
197
201

Table V-26: Alternative 4 NHTSA Fuel Consumption Standards for MY2021 Class 2b-8 Vocational Vehicles 
Alternative NHTSA Standard for Vehicle with CI Engine Effective MY 2021 (Fuel Consumption gallon per 1,000 ton-mile)
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
28.3890
17.9764
18.8605
Multi-Purpose
29.0766
18.0747
18.9587
Regional
30.1572
17.6817
17.9764
Alternative NHTSA Standard for Vehicle with SI Engine Effective MY 2021 (Fuel Consumption gallon per 1,000 ton-mile) 
Duty Cycle
Light Heavy-Duty 
Class 2b-5
Medium Heavy-Duty Class 6-7
Heavy Heavy-Duty
Class 8
Urban
35.2200
22.3923
23.6300
Multi-Purpose
36.3452
22.6173
23.8551
Regional
37.8080
22.1672
22.6173
    Costs Associated with Alternative 4 Standards
The agencies have estimated the costs of the technologies expected to be used to comply with the Alternative 4 standards, as shown in Table V-27 for MY2021.  Fleet average costs are shown for light, medium and heavy HD vocational vehicles in each duty-cycle-based subcategory  -  Urban, Multi-Purpose, and Regional.  As shown in Table V-27, in MY 2021 these range from approximately $800 for MHD and LHD Regional vehicles, to $4,300 for HHD Urban and Multipurpose vehicles.  Those two subcategories are projected to have the higher-cost packages in MY 2021 due to an estimated 9 percent adoption of HHD hybrids, which are estimated to cost $40,000 per vehicle in MY 2021, as shown in Chapter 2.12.7 of the draft RIA. For more specific information about the agencies' estimates of per-vehicle costs, please see the draft RIA Chapter 2.12.  The engine costs listed represent the cost of an average package of diesel engine technologies with Alternative 4 adoption rates described in Section II.D.2(e).  The details behind all these costs are presented in draft RIA Chapter 2.12, including the markups and learning effects applied and how the costs shown here are weighted to generate an overall cost for the vocational segment.
Table V-27 Vocational Vehicle Technology Incremental Costs for Alternative 4 Standards in the 2021 Model Year[a,b] (2012$)

Light HD
Medium HD
Heavy HD

Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Engine[c]
                                                                           $372
                                                                           $372
                                                                           $372
                                                                           $345
                                                                           $345
                                                                           $345
                                                                           $345
                                                                           $345
                                                                           $345
Tires
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
                                                                             $7
Transmission
                                                                           $148
                                                                           $148
                                                                           $148
                                                                           $148
                                                                           $148
                                                                           $148
                                                                           $148
                                                                           $148
                                                                         $2,042
Axle related
                                                                            $99
                                                                            $99
                                                                            $99
                                                                            $99
                                                                            $99
                                                                            $99
                                                                           $148
                                                                           $148
                                                                           $243
Weight Reduction
                                                                            $27
                                                                            $27
                                                                            $48
                                                                            $27
                                                                            $27
                                                                            $41
                                                                            $27
                                                                            $27
                                                                            $34
Idle reduction
                                                                           $110
                                                                           $110
                                                                           $110
                                                                           $116
                                                                           $116
                                                                           $116
                                                                             $8
                                                                             $8
                                                                             $0
Electrification & hybridization
                                                                         $1,384
                                                                         $1,384
                                                                             $0
                                                                         $2,175
                                                                         $2,175
                                                                             $0
                                                                         $3,633
                                                                         $3,633
                                                                             $0
Air Conditioning[d]
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
                                                                            $22
Total
                                                                         $2,169
                                                                         $2,169
                                                                           $805
                                                                         $2,938
                                                                         $2,938
                                                                           $777
                                                                         $4,337
                                                                         $4,337
                                                                         $2,693
Notes:
[a] Costs shown are for the 2021 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect costs via markups along with learning impacts.  For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates.  Therefore, the technology costs shown reflect the average cost expected for each of the indicated vehicle classes.  To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9 in particular).
[c] Engine costs are for a light HD, medium HD or heavy HD diesel engine. We are projecting no additional costs beyond Phase 1 for gasoline vocational engines.
[d] EPA's air conditioning standards are presented in Section V.C above.
The estimated costs of the technologies expected to be used to comply with the Alternative 4 standards for MY2024 are shown in Table V-28.  As shown, these range from approximately $1,500 for MHD and LHD Regional vehicles to $7,900 for HHD Urban and Multipurpose vehicles.  These two subcategories are projected to have the higher-cost packages in MY 2024 due to an estimated 18 percent adoption of HHD hybrids, which are estimated to cost $33,000 per vehicle in MY 2024, as shown in Chapter 2.12.7 of the draft RIA.  The engine costs listed represent the cost of an average package of diesel engine technologies with Alternative 4 adoption rates described in Section II.D.2(e).  For gasoline vocational vehicles, the agencies are projecting adoption of Level 2 engine friction reduction with an estimated $74 added to the average SI vocational vehicle package cost in MY 2024, which represents about 56 percent of those vehicles upgrading beyond Level 1 engine friction reduction.  Further details on how these SI vocational vehicle costs were estimated are provided in the draft RIA Chapter 2.9.
Table V-28:  Vocational Vehicle Technology Incremental Costs for Alternative 4 Standards in the 2024 Model Year[a] (2012$)

Light HD
Medium HD
Heavy HD

Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Urban
Multi-
purpose
Regional
Engine[c]
                                                                           $493
                                                                           $493
                                                                           $493
                                                                           $457
                                                                           $457
                                                                           $457
                                                                           $457
                                                                           $457
                                                                           $457
Tires
                                                                            $26
                                                                            $26
                                                                            $26
                                                                            $26
                                                                            $26
                                                                            $26
                                                                            $40
                                                                            $40
                                                                            $40
Transmission
                                                                           $256
                                                                           $256
                                                                           $280
                                                                           $256
                                                                           $256
                                                                           $280
                                                                           $256
                                                                           $256
                                                                         $3,123
Axle related
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                            $90
                                                                           $136
                                                                           $136
                                                                           $224
Weight Reduction
                                                                            $30
                                                                            $30
                                                                            $49
                                                                            $30
                                                                            $30
                                                                            $43
                                                                            $30
                                                                            $30
                                                                            $37
Idle reduction
                                                                           $561
                                                                           $524
                                                                           $524
                                                                           $592
                                                                           $553
                                                                           $553
                                                                         $1,014
                                                                         $1,014
                                                                         $1,011
Electrification & hybridization
                                                                         $2,264
                                                                         $2,264
                                                                             $0
                                                                         $3,559
                                                                         $3,559
                                                                             $0
                                                                         $5,943
                                                                         $5,943
                                                                             $0
Air Conditioning[d]
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
                                                                            $20
Total
                                                                         $3,741
                                                                         $3,704
                                                                         $1,482
                                                                         $5,030
                                                                         $4,992
                                                                         $1,469
                                                                         $7,895
                                                                         $7,895
                                                                         $4,912
Notes:
[a] Costs shown are for the 2024 model year and are incremental to the costs of a vehicle meeting the Phase 1 standards. These costs include indirect costs via markups along with learning impacts. For a description of the markups and learning impacts considered in this analysis and how it impacts technology costs for other years, refer to Chapter 2 of the draft RIA (see draft RIA 2.12).
[b] Note that values in this table include adoption rates. Therefore, the technology costs shown reflect the average cost expected for each of the indicated vehicle classes. To see the actual estimated technology costs exclusive of adoption rates, refer to Chapter 2 of the draft RIA (see RIA 2.9 in particular).
[c] Engine costs shown are for a light HD, medium HD or heavy HD diesel engine. For gasoline-powered vocational vehicles we are projecting $74 of additional engine-based costs beyond Phase 1.
[d] EPA's air conditioning standards are presented in Section V.C above.
Compliance Provisions for Vocational Vehicles
We welcome comment on all aspects of the compliance program, including those where we would adopt a provision without change in Phase 2.
Application and Certification Process
The agencies propose to continue to use GEM to determine compliance with the proposed vehicle fuel efficiency and CO2 standards.  Because the agencies are proposing to modify GEM to recognize inputs in addition to those recognized under Phase 1, there is a consequent proposed requirement that manufacturers or component suppliers conduct component testing to generate those input values. See Section II for details of engine testing and GEM inputs for engines. 
As described above in Section I, the agencies propose to continue the Phase 1 compliance process in terms of the manufacturer requirements prior to the effective model year, during the model year, and after the model year.  The information that would be required to be submitted by manufacturers is set forth in 40 CFR 1037.205 and 49 CFR 537.6-537.7.  EPA would continue to issue certificates upon approval based on information submitted through the VERIFY database (see 40 CFR 1037.255).  End of year reports would continue to include the GEM results for all of the configurations built, along with credit/deficit balances, if applicable (see 40 CFR 1037.250 and 1037.730).
    GEM Inputs
In Phase 1, there were two inputs to GEM for vocational vehicles.
         * Steer tire coefficient of rolling resistance, and
         * Drive tire coefficient of rolling resistance
As discussed above in Section II and III.D, there are several additional inputs that are proposed for Phase 2.  In addition to the steer and drive tire CRR, the proposed inputs include the following:
         * Engine fuel map,
         * Engine full-load torque curve,
         * Engine motoring curve,
         * Transmission type,
         * Transmission gear ratios,
         * Drive axle ratio,
         * Loaded tire radius for drive and steer tires,
         * Idle Reduction,
         * Weight Reduction, and
         * Other pre-defined off-cycle technologies.
Driveline Inputs
As with tractors, for each engine family, an engine fuel map, full load torque curve, and motoring curve would be generated by engine manufacturers as inputs to GEM.  The test procedures for the torque and motoring curves are found in proposed 40 CFR part 1065. Section II.D.1.b describes these proposed procedures as well as the proposed new procedure for generating the engine fuel map.  Also similar to tractors, transmission specifications would be input to GEM. Any number of gears could be entered with a numerical ratio for each, and transmission type would be selectable as either a Manual, Automated Manual, Automatic, or Dual Clutch transmission. 
As part of the driveline information needed to run GEM, drive axle ratio would be a user input.  If a configuration has a two-speed axle, the agencies propose that a manufacturer may enter the ratio that is expected to be engaged most often. We request comment on whether the agencies should allow this choice.  Two-speed axles are typically specified for heavy-haul vocational vehicles, where the higher numerical ratio axle would be engaged during transient driving conditions and to deliver performance needed on work sites, while the lower numerical ratio axle would be engaged during highway driving.  The agencies request comment on whether we should require GEM to be run twice, once with each axle ratio, where the output over the highway cycles would be used from the run with the lower axle ratio, and the output over the transient cycle would be used from the run with the higher axle ratio. 
Tire size would be a new input to GEM that is necessary for the model to simulate the performance of the vehicle. The draft RIA Chapter 3 includes a description of how to measure tire size. For each model and nominal size of a tire, there are numerous possible sizes that could be measured, depending on whether the tire is new or "grown," meaning whether it has been broken in for at least 200 miles. Size could also vary based on load and inflation levels, air temperature, and tread depth.  The agencies request comment on aspects of measuring and reporting tire size that could be specified by rule, to avoid any unnecessary compliance burden of the Phase 2 program. 
 Idle Reduction Inputs 
Based on user inputs derived from engine testing described in Section II and draft RIA Chapter 3, GEM would calculate CO2 emissions and fuel consumption at both zero torque (neutral idle) and with torque set to Curb-Idle Transmission Torque for automatic transmissions in "drive" (as defined in 40 CFR 1065.510(f)(4) for variable speed engines) for use in the CO2 emission calculation in 40 CFR 1037.510(b).  The proposed regulations at 40 CFR part 1065 specify that that there must be two consecutive reference zero load idle points to establish  periods of zero load idle for purposes of calculating total work over an engine test cycle. These two idle points from the engine test would be used in GEM for purposes of calculating emissions during vehicle idling over the vocational vehicle test cycles.
The agencies welcome comments on the inclusion of these technologies into GEM in Phase 2.
Weight Reduction Inputs
In Phase 1, the agencies adopted tractor regulations that provided manufacturers with the ability to utilize high strength steel and aluminum components for weight reduction without the burden of entering the curb weight of every tractor produced.  In Phase 2, the agencies propose to apply relevant weights from the tractor lookup table to vocational vehicles.  As noted above, the agencies are proposing to recognize weight reduction by allocating one half of the weight reduction to payload in the denominator, while one half of the weight reduction would be subtracted from the overall weight of the vehicle in GEM.  
To adapt the tractor table for vocational vehicles, the agencies propose to add lookup values for vehicles in lower weight classes.  We believe it is appropriate to also recognize the weight reduction associated with 6x2 axles.  We welcome comments on all aspects of weight reduction.  Components available for vocational vehicle manufacturers to select for weight reduction are shown below in Table V-29, below.  
Table V-29 Proposed Phase 2 Weight Reduction Technologies for Vocational Vehicles 
Component
Material
Unit Weight Reduced (lb) HHD Class 8
Unit Weight Reduced (lb) LHD or MHD Class 2b-7
Number per HHD Chassis
Number per LHD/MHD Chassis
Axle Hubs - Drive
Aluminum
                                                                             20
                                                                             20
                                                                              4
                                                                              2
Axle Hubs - Drive
High Strength Steel
                                                                              5
                                                                              5
                                                                              4
                                                                              2
Axle Hubs - Non-Drive
Aluminum
                                                                             20
                                                                             20
                                                                              2
                                                                              2
Axle Hubs - Non-Drive
High Strength Steel
                                                                            2.5
                                                                            2.5
                                                                              2
                                                                              2
Axle - Non-Drive 
Aluminum
                                                                             60
                                                                             60
                                                                              1
                                                                              1
Axle - Non-Drive
High Strength Steel
                                                                             15
                                                                             15
                                                                              1
                                                                              1
Axle - 6x2 Configuration
Multi
                                                                            300
                                                                            N/A
                                                                              1
                                                                            N/A
Brake Drums - Drive
Aluminum
                                                                             35
                                                                             35
                                                                              4
                                                                              2
Brake Drums - Drive
High Strength Steel
                                                                            2.8
                                                                            2.8
                                                                              4
                                                                              2
Brake Drums - Non-Drive
Aluminum
                                                                             30
                                                                             30
                                                                              2
                                                                              2
Brake Drums - Non-Drive
High Strength Steel
                                                                              4
                                                                              4
                                                                              2
                                                                              2
Crossmember - Cab
Aluminum
                                                                             15
                                                                             15
                                                                              1
                                                                              1
Crossmember - Cab
High Strength Steel
                                                                              5
                                                                              5
                                                                              1
                                                                              1
Crossmember - Non-Suspension
Aluminum
                                                                              5
                                                                              5
                                                                              3
                                                                              3
Crossmember - Non-Suspension
High Strength Steel
                                                                            1.7
                                                                            1.7
                                                                              3
                                                                              3
Crossmember - Suspension
Aluminum
                                                                             25
                                                                             25
                                                                              1
                                                                              1
Crossmember - Suspension
High Strength Steel
                                                                              6
                                                                              6
                                                                              1
                                                                              1
Driveshaft
Aluminum
                                                                             20
                                                                             20
                                                                              1
                                                                              1
Driveshaft
High Strength Steel
                                                                              5
                                                                              5
                                                                              1
                                                                              1
Frame Rails
Aluminum
                                                                            220
                                                                            220
                                                                              2
                                                                              2
Frame Rails
High Strength Steel
                                                                             43
                                                                             43
                                                                              2
                                                                              2
Shackles
Aluminum
                                                                            1.7
                                                                            1.7
                                                                              6
                                                                              4
Shackles
High Strength Steel
                                                                            0.5
                                                                            0.5
                                                                              6
                                                                              4
Suspension Brackets, Hangers
Aluminum
                                                                           16.7
                                                                           16.7
                                                                              6
                                                                              4
Suspension Brackets, Hangers
High Strength Steel
                                                                              5
                                                                              5
                                                                              6
                                                                              4
Transmission Case
Aluminum
                                                                             50
                                                                             45
                                                                              1
                                                                              1
Transmission Case
High Strength Steel
                                                                             12
                                                                             12
                                                                              1
                                                                              1
Transmission Clutch Housing
Aluminum
                                                                             47
                                                                             34
                                                                              1
                                                                              1
Transmission Clutch Housing
High Strength Steel
                                                                             10
                                                                             10
                                                                              1
                                                                              1
Transmission Clutch Levers
Aluminum
                                                                             20
                                                                             20
                                                                              1
                                                                              1
Transmission Clutch Levers
High Strength Steel
                                                                              4
                                                                              4
                                                                              1
                                                                              1
Wheels - Dual
Aluminum
                                                                             21
                                                                             21
                                                                             10
                                                                              6
Wheels - Dual
High Strength Steel
                                                                              8
                                                                              8
                                                                             10
                                                                              6
Wheels - Dual
Lightweight Aluminum
                                                                             30
                                                                             30
                                                                             10
                                                                              6
Wheels - Wide Base Single
Aluminum
                                                                            139
                                                                            139
                                                                             10
                                                                              6
Wheels - Wide Base Single
High Strength Steel
                                                                             84
                                                                             84
                                                                             10
                                                                              6
Wheels - Wide Base Single
Lightweight Aluminum
                                                                            147
                                                                            147
                                                                             10
                                                                              6
    Test Procedures
Powertrain families are defined in Section II.C.3.b, and powertrain test procedures are discussed in the draft RIA Chapter 3. The agencies propose that the results from testing a powertrain configuration using the matrix of tests described in draft RIA Chapter 3.6 could be applied broadly across all vocational vehicles in which that powertrain would be installed.   
As in Phase 1, the rolling resistance of each tire would be measured using the ISO 28850 test method for drive tires and steer tires planned for fitment to the vehicle being certified. Once the test CRR values are obtained, a manufacturer would input the CRR values for the drive and steer tires separately into the GEM.  For vocational vehicles in Phase 2, the agencies propose that the vehicle load would be distributed with 30 percent of the load over the steer tires and 70 percent of the load over the drive tires. With these data entered, the amount of GHG reduction attributed to tire rolling resistance would be incorporated into the overall vehicle compliance value.
    Useful Life and In-Use Standards
Section 202(a)(1) of the CAA specifies that emissions standards are to be applicable for the useful life of the vehicle.  The standards that EPA is proposing would apply to individual vehicles and engines at production and in use.  NHTSA is not proposing in-use standards for vehicles and engines.  
Manufacturers may be required to submit, as part of the application for certification, an engineering analysis showing that emission control performance will not deteriorate during the useful life, with proper maintenance.  If maintenance will be required to prevent or minimize deterioration, a demonstration may be required that this maintenance will be performed in use. (See 40 CFR 1037.241).
EPA is proposing to continue the Phase 1 approach to adjustment factors and deterioration factors.  The technologies on which the Phase 1 vocational vehicle standards were predicated were not expected to have any deterioration of GHG effectiveness in use.  However, the regulations provided a process for manufacturers to develop deterioration factors (DF) if they needed. We anticipate that some hybrid powertrain systems may experience some deterioration of effectiveness with age of the energy storage device.  We believe the regulations in place currently provide adequate instructions to manufacturers for developing DF where needed. We request comment on whether any changes to the DF process are needed. 
As with engine certification, a manufacturer must provide evidence of compliance through the regulatory useful life of the vehicle. Factors influencing vehicle-level GHG performance over the life of the vehicle fall into two basic categories: vehicle attributes and maintenance items.  Each category merits different treatment from the perspective of assessing useful life compliance, as each has varying degrees of manufacturer versus owner/operator responsibility.
For vocational vehicles, attributes generally refers to components that are installed by the manufacturer to meet the standard, whose reduction properties are assessed at the time of certification, and which are expected to last the full life of the vehicle with effectiveness maintained as new for the life of the vehicle with no special maintenance requirements.  To assess useful life compliance, we are proposing to follow a design-based approach that would ensure that the manufacturer has robustly designed these features so they can reasonably be expected to last the useful life of the vehicle.
For vocational vehicles, maintenance items generally refers to items that are replaced, renewed, cleaned, inspected, or otherwise addressed in the preventative maintenance schedule specified by the vehicle manufacturer. Replacement items that have a direct influence on GHG emissions are primarily tires and lubricants, but may also include hybrid system batteries. Synthetic engine oil may be used by vehicle manufacturers to reduce the GHG emissions of their vehicles. Manufacturers may specify that these fluids be changed throughout the useful life of the vehicle. If this is the case, the manufacturer should have a reasonable basis that the owner/operator will use fluids having the same properties. This may be accomplished by requiring (in service documentation, labeling, etc.) that only these fluids can be used as replacements.  In this proposal, the only maintenance costs we have quantified are those for tire replacement, as described in Section IX.C.3 and the draft RIA Chapter 7.1.  The agencies invite comments with information related to maintenance costs that the agencies should quantify for the final rules.
For current non-hybrid technologies, if the vehicle remains in its original certified condition throughout its useful life, it is not believed that GHG emissions would increase as a result of service accumulation. As in Phase 1, the agencies propose allowing the use of an assigned deterioration factor of zero where appropriate in Phase 2; however this does not negate the responsibility of the manufacturer to ensure compliance with the emissions standards throughout the useful life.  The vehicle manufacturer would be primarily responsible for providing engineering analysis demonstrating that vehicle attributes will last for the full useful life of the vehicle. We anticipate this demonstration would show that components are constructed of sufficiently robust materials and design practices so as not to become dysfunctional under normal operating conditions.
In Phase 1, EPA set the useful life for engines and vehicles with respect to GHG emissions equal to the respective useful life periods for criteria pollutants.  In April 2014, as part of the Tier 3 light-duty vehicle final rule, EPA extended the regulatory useful life period for criteria pollutants to 150,000 miles or 15 years, whichever comes first, for Class 2b and 3 pickup trucks and vans and some light-duty trucks (79 FR 23414, April 28, 2014).  Class 2 through Class 5 heavy-duty vehicles subject to the GHG standards described in this section for vocational applications generally use the same kinds of engines, transmissions, and emission controls as the Class 2b and 3 vehicles that are chassis-certified to the criteria standards under 40 CFR part 86, subpart S.  EPA is therefore proposing that the Phase 2 GHG standards for vocational vehicles at or below 19,500 pounds GVWR apply over the same useful life of 150,000 miles or 15 years.  In many cases, this will result in aligned useful-life values for criteria and GHG standards.  Where this longer useful life is not aligned with the useful life that applies for criteria standards (generally in the case of engine-based certification under 40 CFR part 86, subpart A), EPA may revisit the useful-life values for both criteria and GHG standards in a future rulemaking.  For medium heavy-duty vehicles (19,500 to 33,000 pounds GVWR) and heavy heavy-duty vehicles (above 33,000 pounds GVWR) EPA is proposing to keep the useful-life values from Phase 1, which are 185,000 miles (or 10 years) and 435,000 miles (or 10 years), respectively.  EPA requests comment on this approach, including the proposed values and the overall process envisioned for achieving the long-term goal of adopting harmonized useful-life specifications for criteria and GHG standards that properly represent the manufacturers' obligation to meet emission standards over the expected service life of the vehicles.  EPA may also revisit the useful-life values that apply for medium heavy-duty vehicles and heavy heavy-duty vehicles.
One technology option for vocational vehicle manufacturers to reduce GHG emissions is to use a smaller engine, perhaps in conjunction with a hybrid powertrain.  This could lead to a situation where the engine and the vehicle are subject to emission standards over different useful-life periods.  For example, an urban bus (heavy heavy-duty vehicle), might be able to use a medium heavy-duty engine, or even a light heavy-duty engine.  While such a mismatch in useful life values could be confusing, we don't believe it poses any particular policy problem that we need to address.  EPA requests comment on the possibility of mismatched engine and vehicle useful-life values and on any possible implications this may have for manufacturers' ability to design, certify, produce, and sell their engines and vehicles.
While NHTSA would use useful life considerations as described above for establishing fuel consumption performance for initial compliance and for ABT, NHTSA does not intend to implement an in-use compliance program for fuel consumption, because it is not required under EISA and because it is not currently anticipated there would be notable deterioration of fuel consumption over the engines' useful life. 
    Assigning Vehicles to Test Cycles 
The agencies propose the following logic for deciding which chassis configurations would be assigned to each of the three proposed vocational duty cycles and thus regulatory subcategories:
       * A vehicle would be certified over the Multipurpose Duty Cycle, unless one of the following conditions warrants certifying over either the Regional or Urban cycle. 
       * If the vehicle is powered by a CI engine, use the Regional Duty Cycle if the resulting value from the calculation described in Equation V-1 is less than 75 percent.
       * If the vehicle is powered by a SI engine, use the Regional Duty Cycle if the resulting value from the calculation described in Equation V-1 is less than 45 percent.
Equation V-1 Proposed Regional Duty Cycle Cutpoint
       Cutpoint Regional=65 mph x axle ratio x trans ratio x CSLR*fntestx100
Where
CutpointRegional is the percent of maximum engine test speed that is achieved at a vehicle speed of 65 mph,
SLR is the static loaded tire radius entered into GEM as specified in the regulations,
Axle ratio is the drive axle ratio that entered into GEM as specified in the regulations,
Trans ratio is the ratio of the top transmission gear that is not permanently locked out,
fntest is the maximum engine test speed as defined at 40 CFR 1065.610, and
C is a constant equal to
5280ftmix 12inftx .0254min60minhrx 2PI

       * If a vehicle is powered by a CI engine, use the Urban Duty Cycle if the resulting value from the calculation described in Equation V-2 is greater than 90 percent.
       * If a vehicle is powered by a SI engine, use the Urban Duty Cycle if the resulting value from the calculation described in Equation V-2 is greater than 50 percent.
Equation V-2 Proposed Urban Duty Cycle Cutpoint
       Cutpoint Urban=55 mph x axle ratio x trans ratio x CSLR*fntestx100
Where
CutpointUrban is the percent of maximum engine test speed that is achieved at a vehicle speed of 55 mph,
SLR is the static loaded tire radius entered into GEM as specified in the regulations,
Axle ratio is the drive axle ratio that is entered into GEM as specified in the regulations,
Trans ratio is the ratio of the top transmission gear that is not permanently locked out,
fntest is the maximum engine test speed as defined at 40 CFR 1065.610, and
C is a constant equal to
5280ftmix 12inftx .0254min60minhrx 2PI
The agencies ran GEM with many vocational vehicle configurations to develop a data set with which we could assess appropriate cutpoints for the above equations.  The configurations varied primarily by the engine model, fuel type, and axle ratio.  See the draft RIA Chapter 2.9.2 for further details on the assessment process for these proposed cutpoints.
The agencies realize that there are vocational vehicles for which the above logic may not result in an appropriate assignment of test cycle. Therefore we are proposing an exception that would enable any vehicle with a hybrid drivetrain to certify over the Urban test cycle.  Further, we are proposing that the following vehicles must be certified using the Regional cycle: intercity coach buses, recreational vehicles, and vehicles whose engine is exclusively certified over the SET.  We are also proposing to allow manufacturers to request a different duty cycle.  We request comment on this approach, and whether we should allow manufacturers to have complete freedom to select a test cycle without any need for EPA or NHTSA approval.  
Other Compliance Provisions
    Emission Control Labels
EPA considers it crucial that field inspectors are able to identify whether a vehicle is certified, and if so whether it is in the certified condition.  To facilitate this identification in Phase 1, EPA adopted labeling provisions for vocational vehicles that included several items.  The Phase 1 vocational vehicle label must include the manufacturer, vehicle identifier such as the Vehicle Identification Number, vehicle family, regulatory subcategory, date of manufacture, compliance statements, and emission control system identifiers (see 40 CFR 1037.135).  In Phase 1, the vocational vehicle emission control system identifier is tire rolling resistance, plus any innovative and advanced technologies.  The number of proposed emission control systems for greenhouse gas emissions in Phase 2 has increased significantly.  For example, the engine, transmission, axle configuration, tire radius, and idle reduction system are control systems that can be evaluated on-cycle in Phase 2 (i.e. these technologies' performance can now be input to GEM), but could not be evaluated in Phase 1.  Due to the significant complexity in determining greenhouse gas emissions as proposed in Phase 2, EPA does not believe that we can appropriately assess whether a vehicle is in a certified condition or not through simply comparing information that could be made available on an emission control label with the components installed on a vehicle.  Therefore, EPA proposes to remove the requirement to include the emission control system identifiers required in 40 CFR 1037.135(b)(6) and in Appendix III to 40 CFR part 1037 from the emission control labels for vocational vehicles certified to the primary Phase 2 standards.  EPA is not proposing to modify the existing emission control labels for vocational vehicles certified to the Phase 1 CO2 standards.  
[Additional text on labeling and compliance to be added.]
    End of Year Reports
In the Phase 1 program, manufacturers participating in the ABT program provided 90 day and 270 day reports to EPA and NHTSA after the end of the model year.  The agencies adopted two reports for the initial program to help manufacturers become familiar with the reporting process.  For the HD Phase 2 program, the agencies propose to simplify reporting such that manufacturers would only be required to submit one end of the year report 120 days after the end of the model year with the potential to obtain approval for a delay up to 30 days.  We welcome comment on this proposed revision. 
    Delegated Assembly
The proposed standards for vocational vehicles are based on the application of a wide range of technologies.  Certifying vehicle manufacturers manage their compliance demonstration to reflect this range of technologies by describing their certified configurations in the application for certification.  In many cases, these technologies are designed and assembled (or installed) directly by the certifying vehicle manufacturer, which is typically the chassis manufacturer.  In these cases, it is straightforward to assign the responsibility to the certifying vehicle manufacturer for ensuring that vehicles are in their proper certified configuration when sold to the ultimate user.  In Phase 1, the only vehicle technology available for certified vocational vehicles was LRR tires. Because these are generally installed by the chassis manufacturer, there would have been no need to rely on a second stage manufacturer for purposes of certification. 
In Phase 2, the agencies are considering certain technologies where the certifying vehicle manufacturer may want or need to rely on a downstream manufacturing company (a secondary vehicle manufacturer) to take steps to assemble or install certain components or technologies to bring the vehicle into a certified configuration.  A similar relationship between manufacturers applies with aftertreatment devices for certified engines.  EPA has adopted "delegated assembly" provisions for engines at 40 CFR 1068.261 to describe how manufacturers can share compliance responsibilities through these cooperative assembly procedures.  
We are proposing to take a similar approach for vehicle-based GHG standards in 40 CFR part 1037.  The delegated assembly provisions as proposed for GHG standards are focused on add-on features to reduce aerodynamic drag, and on air conditioning systems.  This may occur, for example, if the certifying manufacturer sells a cab-complete chassis to a secondary vehicle manufacturer, which in turn installs a box with the appropriate aerodynamic accessories to reduce drag losses.  To the extent certifying manufacturers rely on secondary vehicle manufacturers to bring the vehicle into a certified configuration, the following provisions would apply:
         * The certifying manufacturer would describe their approach to delegated assembly in the application for certification.
         * The certifying manufacturer would create installation instructions to describe how the secondary vehicle manufacturer would bring the vehicle into a certified configuration.
         * The certifying manufacturer would have a contractual agreement with each affected secondary vehicle manufacturer obligating the secondary vehicle manufacturer to build each vehicle into a certified configuration and to provide affidavits confirming proper assembly procedures, and to provide information regarding deployment of each type of technology (if there are technology options that relate to different GEM input values).
         * If the secondary vehicle manufacturer must separately purchase the components needed to bring vehicles into a certified configuration, the certifying manufacturer must perform periodic on-site audits of secondary vehicle manufacturers to ensure that the secondary vehicle manufacturer is selecting the proper components, ordering the appropriate quantities of those components, and assembling those components consistent with the appropriate certified configuration.
The delegated assembly provisions are most relevant to vocational vehicles, but we are not proposing to limit these provisions to vocational vehicles.  Similarly, we expect that aerodynamic devices and air conditioning systems are the most likely technologies for which delegated assembly is appropriate, but we are not proposing to limit the use of delegated assembly to these technologies.
Secondary manufacturers (such as body builders) that build complete vehicles from certified chassis are obligated to comply with the emission-related installation instructions provided by the certifying manufacturer.  Secondary manufacturers that build complete vehicles from exempted chassis are obligated to comply with all of the regulations.
The draft regulations at §1037.621 describe further detailed provisions related to delegated assembly.  We request comment on all aspects of these provisions.  In particular, we request comment on how the procedures should be applied more broadly or more narrowly for specific technologies.  We also request comment on any further modifications that should be made to the delegated assembly provisions to reflect the nature of manufacturing relationships or technologies that are specific to greenhouse gas standards for heavy-duty highway vehicles.
    Demonstrating Compliance with Proposed HFC Leakage Standards
EPA is proposing requirements for vocational chassis manufacturers to demonstrate reductions in direct emissions of HFC in their A/C systems and components through a design-based method.  The method for calculating A/C leakage is the same as was adopted in Phase 1 for tractors and HD pickups and vans. It is based closely on an industry-consensus leakage scoring method, described below. This leakage scoring method is correlated to experimentally-measured leakage rates from a number of vehicles using the different available A/C components. As is done currently for other HD vehicles, vocational chassis manufacturers would choose from a menu of A/C equipment and components used in their vehicles in order to establish leakage scores, to characterize their A/C system leakage performance. The percent leakage per year would then be calculated as this score divided by the system refrigerant capacity.  
Consistent with the light-duty rule and the Phase 1 program for other HD vehicles, EPA is proposing a requirement that vocational chassis manufacturers compare the components of a vehicle's A/C system with a set of leakage-reduction technologies and actions that is based closely on that developed through the Improved Mobile Air Conditioning program and SAE International (as SAE Surface Vehicle Standard J2727, "HFC-134a, Mobile Air Conditioning System Refrigerant Emission Chart," August 2008 version).  See generally 75 FR 25426.  The SAE J2727 approach was developed from laboratory testing of a variety of A/C related components, and EPA believes that the J2727 leakage scoring system generally represents a reasonable correlation with average real-world leakage in new vehicles.  This approach associates each component with a specific leakage rate in grams per year that is identical to the values in J2727 and then sums together the component leakage values to develop the total A/C system leakage. Unlike the light-duty program, in the heavy-duty vehicle program, the total A/C leakage score is divided by the value of the total refrigerant system capacity to develop a percent leakage per year.  EPA believes that the design-based approach results in estimates of likely leakage emissions reductions that are comparable to those that would result from performance-based testing.
Consistent with HD GHG Phase 1, EPA is not proposing a specific in-use standard for leakage, as neither test procedures nor facilities exist to measure refrigerant leakage from a vehicle's air conditioning system.  However, consistent with the HD Phase 1 program and the light-duty rule, where we propose to require that manufacturers attest to the durability of components and systems used to meet the CO2 standards (see 75 FR 25689), we propose to require that manufacturers of heavy-duty vocational vehicles attest to the durability of these systems, and provide an engineering analysis that demonstrates component and system durability.
    Glider Vehicles
EPA is proposing to not exempt glider vehicles from the Phase 2 GHG emission and fuel consumption standards.   Gliders and glider kits are exempt from NHTSA's Phase 1 fuel consumption standards.  The EPA's interim provisions of Phase 1 exempted glider vehicles produced by small businesses from the Phase 1 CO2 emission standards but did not include such a blanket exemption for other glider vehicles.  Thus, some glider vehicles are already subject to the requirement to obtain a vehicle certificate prior to introduction into commerce as a new vehicle.  However, the agencies believe glider manufacturers may not understand how these regulations apply to them, resulting in a number of uncertified vehicles.
EPA is concerned about adverse economic impacts on small businesses that assemble glider kits and glider vehicles. Therefore, EPA is proposing a new provision that would grandfather existing small businesses, but cap annual production based on recent sales.  This approach is consistent with the approach recommended by the Small Business Advocacy Review Panel, which believed there should be an allowance to produce some glider vehicles for legitimate purposes.  EPA requests comment on whether any special provisions would be needed to accommodate glider vehicles.  See Section XIV.A.8 for additional discussion of the proposed requirements for glider vehicles.
Similarly, NHTSA is considering including gliders under its Phase 2 program.  The agencies request comment on their respective considerations.
Proposed Compliance Flexibility Provisions
EPA and NHTSA are proposing three flexibility provisions specifically for vocational vehicle manufacturers in Phase 2.  These are an averaging, banking and trading program for CO2 emissions and fuel consumption credits, provisions for off-cycle credits for technologies that are not included as inputs to the GEM, and optional chassis certification.  The agencies are also proposing to remove or modify several Phase 1 interim provisions, as described below.  Program-wide compliance flexibilities are discussed in Section I.B.3 to I.C.1.
    Averaging, Banking, and Trading (ABT) Program
Averaging, banking, and trading of emission credits have been an important part of many EPA mobile source programs under CAA Title II. ABT provisions provide manufacturers flexibilities that assist in the efficient development and implementation of new technologies and therefore enable new technologies to be implemented at a more aggressive pace than without ABT.  NHTSA and EPA propose to carry-over the Phase 1 ABT provisions for vocational vehicles into Phase 2, as it is an important way to achieve each agency's programmatic goals.   ABT is also discussed in Section I and Section III.F.1.
Consistent with the Phase 1 averaging sets, the agencies propose that chassis manufacturers may average SI-powered vocational vehicle chassis with CI-powered vocational vehicle chassis, within the same vehicle weight class group.  In Phase 1, all vocational and tractor chassis within a vehicle weight class group were able to average with each other, regardless of whether they were powered by a CI or SI engine.  The proposed Phase 2 approach would continue this.  The only difference is that in Phase 2, there would be different numerical standards set for the SI-powered and CI-powered vehicles, but that would not need to alter the basis for averaging.  This is consistent with the Phase 1 approach where, for example, Class 8 day cab tractors, Class 8 sleeper cab tractors and Class 8 vocational vehicles each have different numerical standards, while they all belong to the same averaging set.  
As discussed in V. E. (1) (c), EPA is proposing to change the useful life for LHD vocational vehicles for GHG emissions from the current 11 years/120,000 miles to 15 years/150,000 miles to be consistent with the useful life of criteria pollutants recently updated in EPA's Tier 3 rule.  For the same reasons, EPA is also proposing this useful life adjustment for HD pickups and vans, as described in Section VI.E.(1).  According to the credits calculation formula at 40 CFR 1037.705 and 49 CFR 535.7, useful life in miles is a multiplicative factor included in the calculation of CO2 and fuel consumption credits.  In order to ensure that banked credits would maintain their value in the transition from Phase 1 to Phase 2, NHTSA and EPA propose an adjustment factor of 1.25 for credits that are carried forward from Phase 1 to the MY 2021 and later Phase 2 standards.  Without this adjustment factor the proposed change in useful life would effectively result in a discount of banked credits that are carried forward from Phase 1 to Phase 2, which is not the intent of the change in the useful life.  The agencies do not believe that this proposed adjustment would result in a loss of program benefits because there is little or no deterioration anticipated for CO2 emissions and fuel consumption over the life of the vehicles.  Also, the carry-forward of credits is an integral part of the program, helping to smoothing the transition to the new Phase 2 standards.  The agencies believe that effectively discounting carry-forward credits from Phase 1 to Phase 2 would be unnecessary and could negatively impact the feasibility of the proposed Phase 2 standards.  EPA and NHTSA request comment on all aspects of the averaging, banking, and trading program.
Innovative and Off-Cycle Technology Credits
In Phase 1, the agencies adopted an emissions and fuel consumption credit generating opportunity that applied to innovative technologies that reduce fuel consumption and CO2 emissions.  These technologies were required to not be in common use with heavy-duty vehicles before the 2010MY and not reflected in the GEM simulation tool (i.e., the benefits are "off-cycle").  See 76 FR at 57253. The agencies propose to largely continue the Phase 1 innovative technology program but to redesignate it as an off-cycle program for Phase 2.
The agencies recognize that there are emerging technologies today that are being developed, but would not be accounted for in the GEM tool, and therefore would be considered off-cycle.  These technologies could include systems such as electrified accessories, air conditioning system efficiency, and aerodynamics for vocational vehicles beyond those tested and pre-approved in the HD Phase 2 program.  Such off-cycle technologies could include known, commercialized technologies if they are not yet widely utilized in a particular heavy-duty sector subcategory.  Any credits for these technologies would need to be based on real-world fuel consumption and GHG reductions that can be measured with verifiable test methods using representative driving conditions typical of the engine or vehicle application.  More information about off-cycle technology credits can be found at Section I.C.1.c.
As in Phase 1, the agencies are proposing to continue to provide two paths for approval of the test procedure to measure the CO2 emissions and fuel consumption reductions of an off-cycle technology used in vocational vehicles.  See 40 CFR 1037.610 and 49 CFR 535.7.  The first path would not require a public approval process of the test method.  A manufacturer could use "pre-approved" test methods for HD vehicles including the A-to-B chassis testing, powerpack testing or on-road testing.  A manufacturer may also use any developed test procedure that has known quantifiable benefits.  A test plan detailing the testing methodology would be required to be approved prior to collecting any test data.  The agencies are also proposing to continue the second path, which includes a public approval process of any testing method that could have questionable benefits (i.e., an unknown usage rate for a technology).  Furthermore, the agencies are proposing to modify their provisions to clarify what documentation must be submitted for approval, which would align them with provisions in 40 CFR 86.1869-12.  NHTSA is separately proposing to prohibit credits from technologies addressed by any of its crash avoidance safety rulemakings (i.e., congestion management systems).  See also 77 FR at 62733 (discussion of similar issue in the light duty greenhouse gas/fuel economy regulations).  We welcome recommendations on how to improve or streamline the off-cycle technology approval process.
 There are some technologies that are entering the market today, and although our model does not have the capability to simulate the effectiveness over the test cycles, there are reliable estimates of effectiveness available to the agencies. These are proposed to be recognized in our HD Phase 2 certification procedures as pre-defined technologies, and would not be considered off-cycle.  Examples of such technologies for vocational vehicles include 6x2 axles and axle lubricants.  These default effectiveness values would be used as valid inputs to GEM.  The projected effectiveness of each vocational vehicle technology is discussed in the draft RIA Chapter 2.9.
The agencies propose that the approval for Phase 1 innovative technology credits (approved prior to 2021 MY) would be carried into the Phase 2 program on a limited basis for those technologies where the benefit is not accounted for in the Phase 2 test procedure.  Therefore, the manufacturers would not be required to request new approval for any innovative credits carried into the off-cycle program, but would have to demonstrate the new cycle does not account for these improvements beginning in the 2021 MY.  The agencies believe this is appropriate because technologies, such as those related to the transmission or driveline, may no longer be "off-cycle" because of the addition of these technologies into the Phase 2 version of GEM. The agencies also seek comments on whether off-cycle technologies in the Phase 2 program should be limited by infrequent common use and by what model years, if any.  We also seek comments on an appropriate penetration rate for a technology not to be considered in common use.
    Optional Chassis Certification
In Phase 2, the agencies are proposing to continue the Phase 1 provisions allowing the optional chassis certification of vehicles over 14,000 pounds GVWR.  In Phase 1 the agencies allowed manufacturers the option to choose to comply with heavy-duty pickup or van standards, for incomplete vehicles that were identical to those on complete pickup truck or van counterparts, with respect to most components that affect GHG emissions and fuel consumption, such as engines, cabs, frames, transmissions, axles, and wheels.  The incomplete vehicles would typically be produced as cab-complete vehicles.  For example, a manufacturer could certify under this allowance an incomplete pickup truck that includes the cab, but not the bed.  The Phase 1 program also includes provisions that allow manufacturers to include some Class 4 and Class 5 vehicles in averaging sets subject to the chassis-based HD pickup and van standards, rather than the vocational vehicle program.
This optional chassis certification of vehicles over 14,000 pounds applies for greenhouse gas emission standards in Phase 1, but not for criteria pollutant emission standards.  We revisited this issue in the recent Tier 3 final rule, where we revised the regulation to allow this same flexibility relative to exhaust emission standards for criteria pollutants.  However, EPA is now seeking comment on the proper approach for certifying vehicles above 14,000 lbs GVWR, because there are lingering questions about how best to align the certification processes for GHG emissions and for criteria pollutants. The agencies are requesting comment on several issues on this topic, including whether there should be an upper weight limit to this allowance.  See Section XIV.A.2 for the issues on which the agencies seek comment with respect to chassis and engine certification for GHG and criteria pollutants for vehicles opting into the HD pickup and van program.
    Phase 1 Flexibilities Not Proposed for Phase 2
As described above in Section I, the agencies are not proposing to provide advanced technology credits in Phase 2.  These technologies had been defined in Phase 1 as hybrid powertrains, Rankine cycle engines, all-electric vehicles, and fuel cell vehicles (see 40 CFR 1037.150(i)), at a 1.5 credit value with the purpose to promote the early implementation of advanced technologies that were not expected to be widely adopted in the market in the 2014 to 2018 time frame. Our feasibility assessment for the proposed Phase 2 vocational vehicle standards includes a projection of the use of hybrid powertrains as described earlier in this section; therefore the agencies believe it would no longer be appropriate to provide extra credit for this technology.  As noted above, waste heat recovery is not projected to be utilized for vocational vehicles within the time frame of Phase 2.  While the agencies are not proposing to premise the Phase 2 vocational vehicle standards on fuel cells or electric vehicles, we expect that any vehicle certified with this technology would provide such a large credit to a manufacturer that an additional incentive credit would not be necessary.  We welcome comments on the need for such incentives, including information on why an incentive for specific technologies in this time frame may be warranted, recognizing that the incentive would result in reduced benefits in terms of CO2 emissions and fuel use due to the Phase 2 program.
The agencies are not proposing to extend early credits to manufacturers who comply early with Phase 2 standards, because the ABT program from Phase 1 will be available to manufacturers and this displaces the need for early credits (see 40 CFR 1037.150(a)).  Please see the more complete discussion of this above in Section I.
Another Phase 1 interim flexibility that the agencies are not proposing to continue in Phase 2 is the flexibility known as the "loose engine" provision, whereby SI engines sold to chassis manufacturers and intended for use in vocational vehicles need not meet the separate SI engine standard (See preamble Section II and draft RIA Chapter 2.6), and instead may be averaged with the manufacturer's HD pickup and van fleet.  We believe the benefits this particular flexibility offers for manufacturers in the interim between Phase 1 and Phase 2 would diminish considerably in Phase 2.  The agencies are proposing a Phase 2 SI engine standard that is no more stringent than the MY 2016 SI engine standard adopted in Phase 1, while the proposed Phase 2 standards for the HD pickup and van fleet would be progressively more stringent through MY 2027.  The primary certification path designed in the Phase 1 program for both CI and SI engines sold separately and intended for use in vocational vehicles was that they be engine certified while the vehicle would be GEM certified under the GHG rules.  In Phase 2 the agencies propose to continue this as the certification path for such engines intended for vocational vehicles.  See the draft RIA Chapter 2.6 for further discussion of the separate engine standard for SI engines intended for vocational vehicles. 
    Other Phase 1 Interim Provisions
In HD Phase 1, EPA adopted provisions to delay the onboard diagnostics (OBD) requirements for heavy-duty hybrid powertrains (see 40 CFR 86.010-18(q)).  This provision delayed full OBD requirements for hybrids until MY 2016 and MY 2017.  In discussion with manufacturers during the development of Phase 2, the agencies have learned that meeting the on-board diagnostic requirements for criteria pollutant engine certification continues to be a potential impediment to adoption of hybrid systems.  See Section XIII.A.1 for a discussion of regulatory changes proposed to reduce the non-GHG certification burden for engines paired with hybrid powertrain systems. 
Also in Phase 1, EPA adopted provisions that reinforced the fact that we were setting GHG emissions from the tailpipe of heavy-duty vehicles.  Therefore, we treated all electric vehicles as having zero emissions of CO2, CH4, and N2O (see 40 CFR 1037.150(f)).  Similarly, NHTSA adopted regulations in Phase 1 that set the fuel consumption standards based on the fuel consumed by the vehicle.  The agencies also did not require emission testing for electric vehicles in Phase 1.  The agencies considered the potential unintended consequence of ignoring upstream emissions from the charging of heavy-duty battery-electric vehicles.  In our assessment, we have observed that the few all-electric heavy-duty vocational vehicles that have been certified are being produced in very small volumes in MY2014.  As we look to the future, we project very limited adoption of electric vocational vehicles into the market; therefore, we believe that this provision is still appropriate.  Unlike the MY2012-2016 light-duty rule, which adopted a cap whereby upstream emissions would be counted after a certain volume of sales (see 75 FR 25434-25436), we believe there is no need to propose a cap for vocational vehicles because of the infrequent projected use of EV technologies in the Phase 2 timeframe.  In Phase 2, we propose to continue to deem electric vehicles as having zero CO2, CH4, and N2O emissions as well as zero fuel consumption.  We welcome comments on this approach.


Heavy-duty Pickups and Vans
Introduction and Summary of Phase 1 HD Pickup and Van Standards
In the Phase 1 rule, EPA and NHTSA established GHG and fuel consumption standards and a program structure for complete Class 2b and 3 heavy-duty vehicles (referred to in these rules as "HD pickups and vans"), as described below.  The Phase 1 standards began to be phased-in in MY 2014 and the agencies believe the program is working well.  The agencies are proposing to retain most elements from the structure of the program established in the Phase 1 rule for the Phase 2 program while proposing more stringent Phase 2 standards for MY 2027, phased in over MYs 2021-2027, that would require additional GHG reductions and fuel consumption improvements.  The MY 2027 standards would remain in place unless and until amended by the agencies.
Heavy-duty vehicles with GVWR between 8,501 and 10,000 lb are classified in the industry as Class 2b motor vehicles.  Class 2b includes vehicles classified as medium-duty passenger vehicles (MDPVs) such as very large SUVs.  Because MDPVs are frequently used like light-duty passenger vehicles, they are regulated by the agencies under the light-duty vehicle rules.  Thus the agencies did not adopt additional requirements for MDPVs in the Phase 1 rule and are not proposing additional requirements for MDPVs in this rulemaking.  Heavy-duty vehicles with GVWR between 10,001 and 14,000 lb are classified as Class 3 motor vehicles.  Class 2b and Class 3 heavy-duty vehicles together emit about 15 percent of today's GHG emissions from the heavy-duty vehicle sector.  
About 90 percent of HD pickups and vans are (3/4)-ton and 1-ton pickup trucks, 12- and 15-passenger vans, and large work vans that are sold by vehicle manufacturers as complete vehicles, with no secondary manufacturer making substantial modifications prior to registration and use.  Most of these vehicles are produced by companies with major light-duty markets in the United States, primarily Ford, General Motors, and Chrysler.  Often, the technologies available to reduce fuel consumption and GHG emissions from this segment are similar to the technologies used for the same purpose on light-duty pickup trucks and vans, including both engine efficiency improvements (for gasoline and diesel engines) and vehicle efficiency improvements.  
In the Phase 1 rule EPA adopted GHG standards for HD pickups and vans based on the whole vehicle (including the engine), expressed as grams of CO2 per mile, consistent with the way these vehicles are regulated by EPA today for criteria pollutants.  NHTSA adopted corresponding gallons per 100 mile fuel consumption standards that are likewise based on the whole vehicle.  This complete vehicle approach adopted by both agencies for HD pickups and vans was consistent with the recommendations of the NAS Committee in its 2010 Report.  EPA and NHTSA adopted a structure for the Phase 1 HD pickup and van standards that in many respects paralleled long-standing NHTSA CAFE standards and more recent coordinated EPA GHG standards for manufacturers' fleets of new light-duty vehicles.  These commonalities include a new vehicle fleet average standard for each manufacturer in each model year and the determination of these fleet average standards based on production volume-weighted targets for each model, with the targets varying based on a defined vehicle attribute.  Vehicle testing for both the HD and light-duty vehicle programs is conducted on chassis dynamometers using the drive cycles from the EPA Federal Test Procedure (Light-duty FTP or "city" test) and Highway Fuel Economy Test (HFET or "highway" test).
For the light-duty GHG and fuel economy standards, the agencies factored in vehicle size by basing the emissions and fuel economy targets on vehicle footprint (the wheelbase times the average track width).  For those standards, passenger cars and light trucks with larger footprints are assigned higher GHG and lower fuel economy target levels in acknowledgement of their inherent tendency to consume more fuel and emit more GHGs per mile. EISA requires that NHTSA study "the appropriate metric for measuring and expressing commercial medium- and heavy-duty vehicle and work truck fuel efficiency performance, taking into consideration, among other things, the work performed by such on-highway vehicles and work trucks..."  49 U.S.C. 32902 (k) (1)(B).  For HD pickups and vans, the agencies also set standards based on vehicle attributes, but used a work-based metric as the attribute rather than the footprint attribute utilized in the light-duty vehicle rulemaking. Work-based measures such as payload and towing capability are key among the parameters that characterize differences in the design of these vehicles, as well as differences in how the vehicles will be utilized.  Buyers consider these utility-based attributes when purchasing a HD pickup or van.  EPA and NHTSA therefore finalized Phase 1 standards for HD pickups and vans based on a "work factor" attribute that combines the vehicle's payload and towing capabilities, with an added adjustment for 4-wheel drive vehicles.  See generally 76 FR 57161-62.
For Phase 1, the agencies adopted provisions such that each manufacturer's fleet average standard is based on production volume-weighting of target standards for all vehicles that in turn are based on each vehicle's work factor.  These target standards are taken from a set of curves (mathematical functions).  The Phase 1 curves are shown in the figures below for reference and are described in detail in the Phase 1 final rule.  The agencies established separate curves for diesel and gasoline HD pickups and vans.  The agencies are proposing to continue to use the work-based attribute and gradually declining standards approach for the Phase 2 standards, as discussed in Section VI.B. below.  Note that this approach does not create an incentive to reduce the capabilities of these vehicles because less capable vehicles are required to have proportionally lower emissions and fuel consumption targets.

                                       
Figure VI-1: EPA Phase 1 CO2 Target Standards and NHTSA Fuel Consumption Target Standards for Diesel HD Pickups and Vans 

Figure VI-2: EPA Phase 1 CO2 Target Standards and NHTSA Fuel Consumption Target Standards for Gasoline HD Pickups and Vans
EPA phased in its CO2 standards gradually starting in the 2014 model year, at 15-20-40-60-100 percent of the model year 2018 standards stringency level in model years 2014-2015-2016-2017-2018, respectively.  The phase-in takes the form of the set of target standard curves shown above, with increasing stringency in each model year.  The final EPA Phase 1 standards for 2018 (including a separate standard to control air conditioning system leakage) represent an average per-vehicle reduction in GHGs of 17 percent for diesel vehicles and 12 percent for gasoline vehicles, compared to a common MY 2010 baseline.  EPA also finalized a compliance alternative whereby manufacturers can phase in different percentages: 15-20-67-67-67-100 percent of the model year 2019 standards stringency level in model years 2014-2015-2016-2017-2018-2019, respectively.  This compliance alternative parallels and is equivalent to NHTSA's first alternative described below.
NHTSA's Phase 1 program allows manufacturers to select one of two fuel consumption standard alternatives for model years 2016 and later.  The first alternative defines individual gasoline vehicle and diesel vehicle fuel consumption target curves that will not change for model years 2016-2018, and are equivalent to EPA's 67-67-67-100 percent target curves in model years 2016-2017-2018-2019, respectively.  This option is consistent with EISA requirements that NHTSA provide 4 years lead-time and 3 years of stability for standards.  49 U.S.C. Section 32902 (k)(3).  The second alternative uses target curves that are equivalent to EPA's 40-60-100 percent target curves in model years 2016-2017-2018, respectively.  Stringency for the alternatives in Phase 1 was selected by the agencies to allow a manufacturer, through the use of the credit carry-forward and carry-back provisions that the agencies also finalized, to meet both NHTSA fuel efficiency and EPA GHG emission standards using a single compliance strategy.  If a manufacturer cannot meet an applicable standard in a given model year, it may make up its shortfall by over-complying in a subsequent year.  NHTSA also allows manufacturers to voluntarily opt into the NHTSA HD pickup and van program in model years 2014 or 2015.  For these model years, NHTSA's fuel consumption target curves are equivalent to EPA's target curves.  The Phase 1 phase-in options are summarized in Table VI-1.
Table VI-1 Phase 1 Standards Phase-in Options

2014
2015
2016
2017
2018
2019
EPA Primary Phase-in
15%
20%
40%
60%
100%
100%
EPA Compliance Option
15%
20%
67%
67%
67%
100%
NHTSA First Option
0%
0%
67%
67%
67%
100%
NHTSA Second Option
0%
0%
40%
60%
100%
100%
The form and stringency of the Phase 1 standards curves are based on the performance of a set of vehicle, engine, and transmission technologies expected (although not required) to be used to meet the GHG emissions and fuel economy standards for model year 2012-2016 light-duty vehicles, with full consideration of how these technologies are likely to perform in heavy-duty vehicle testing and use.  All of these technologies are already in use or have been announced for upcoming model years in some light-duty vehicle models, and some are in use in a portion of HD pickups and vans as well.  The technologies include:
advanced 8-speed automatic transmissions
aerodynamic improvements
electro-hydraulic power steering
engine friction reductions
improved accessories
low friction lubricants in powertrain components
lower rolling resistance tires
lightweighting
gasoline direct injection
diesel aftertreatment optimization
air conditioning system leakage reduction (for EPA program only)
 
Proposed HD Pickup and Van Standards
As described in this section, NHTSA and EPA are proposing more stringent MY 2027 and later Phase 2 standards that would be phased in over model years 2021-2027.  The agencies are proposing standards based on a year-over-year increase in stringency of 2.5 percent over MYs 2021-2027 for a total increase in stringency for the Phase 2 program of about 16 percent compared to the MY 2018 Phase 1 standard.  Note that an individual manufacturer's fleet-wide target may differ from this stringency increase due to changes in vehicle sales mix and changes in work factor.  The agencies have analyzed several alternatives which are discussed in this section below and in Section X.  In particular, we are requesting comment not only on the proposed standards but also particularly on Alternative 4 alternative standard which would result in approximately the same Phase 2 program stringency increase of about 16 percent compared to Phase 1 but would do so two years earlier, in MY 2025 rather than in MY 2027.  The Alternative 4 phase in from 2021-2025 would be based on a year-over-year increase in stringency of 3.5 percent, as discussed below. While we believe the proposed preferred alternative is feasible in the time frame of this rule, and that Alternative 4 could potentially be feasible, the two phase-in schedules differ in the required adoption rate of advanced technologies for certain high volume vehicle segments.  The agencies' analysis essentially shows that the additional lead-time provided by the preferred alternative would allow manufacturers to more fully utilize lower cost technologies thereby reducing the adoption rate of more advanced higher cost technologies such as strong hybrids.  As discussed in more detail in C.8 below, both of the considered phase-ins require comparable penetration rates of several non-hybrid technologies with some approaching 100 percent penetration. However, as discussed below, the additional lead-time provided by Alternative 3 would allow manufacturers more flexibility to fully utilize these non-hybrid technologies to reduce the number of hybrids needed compared to Alternative 4.  Alternative 4 would additionally require significant penetration of strong hybridization. We request comments, additional information, data, and feedback to determine the extent to which such adoption would be realistic within the MY 2025 timeframe.
When considering potential Phase 2 standards, the agencies anticipate that the technologies listed above that were considered in Phase 1 will continue to be available in the future if not already applied under Phase 1 standards and that additional technologies will also be available:
* advanced engine improvements for friction reduction and low friction lubricants
* improved engine parasitics, including fuel pumps, oil pumps, and coolant pumps
* valvetrain variable lift and timing
* cylinder deactivation
* direct gasoline injection
* cooled exhaust gas recirculation
* turbo downsizing of gasoline engines
* Diesel engine efficiency improvements
* downsizing of diesel engines
* 8-speed automatic transmissions
* electric power steering
* high efficiency transmission gear boxes and driveline
* further improvements in accessory loads
* additional improvements in aerodynamics and tire rolling resistance
* low drag brakes
* mass reduction
* mild hybridization
* strong hybridization
Sections VI.C. and D below and Section 2 of the Draft RIA provide a detailed analysis of these and other potential technologies for Phase 2, including their feasibility, costs, and effectiveness and projected application rates for reducing fuel consumption and CO2 emissions when utilized in HD pickups and vans.  Sections VI.C and D and Section X also discuss the selection of the proposed standards and the alternatives considered.
In addition to the EPA's CO2 emission standards and NHTSA's fuel consumption standards for HD pickups and vans, EPA in Phase 1 also finalized standards for two additional GHGs  --  N2O and CH4, as well as standards for air conditioning-related HFC emissions in the Phase 1 rule.  EPA is proposing to continue these standards in Phase 2.  Also, consistent with CAA Section 202(a)(1), EPA finalized Phase 1 standards that apply to HD pickups and vans in use and EPA is proposing in-use standards for these vehicles in Phase 2.  All of the proposed standards for these HD pickups and vans are discussed in more detail below.  Program flexibilities and compliance provisions related to the standards for HD pickups and vans are discussed in Section VI.E.
A relatively small number of HD pickups and vans are sold by vehicle manufacturers as incomplete vehicles, without the primary load-carrying device or container attached.  A sizeable subset of these incomplete vehicles, often called cab-chassis vehicles, are sold by the vehicle manufacturers in configurations with complete cabs and many of the components that affect GHG emissions and fuel consumption identical to those on complete pickup truck or van counterparts  --  including engines, cabs, frames, transmissions, axles, and wheels.  The Phase 1 program includes provisions that allow manufacturers to include these incomplete vehicles as well as some Class 4 through 6 vehicles to be regulated under the chassis-based HD pickup and van program (i.e. subject to the standards for HD pickups and vans), rather than the vocational vehicle program.  The agencies are proposing to continue allowing such incomplete vehicles the option of certifying under either the heavy duty pickup and van standards or the standards for vocational vehicles.  
Phase 1 also includes optional compliance paths for spark-ignition engines identical to engines used in heavy-duty pickups and vans to comply with 2b/3 standards.  See 40 CFR 1037.150(m) and 49 CFR 535.5(a)(7).  Manufacturers sell such engines as "loose engines" or install these engines in incomplete vehicles that are not cab-complete vehicles.  The agencies are not proposing to retain the loose engine provisions for Phase 2.  These program elements are discussed above in Section V.E. on vocational vehicles and XIV.A.2 on engines.
NHTSA and EPA request comment on all aspects of the proposed HD pickup and van standards and program elements described below and the alternatives discussed in Section X.
Vehicle-Based Standards
For Phase 1, EPA and NHTSA chose to set vehicle-based standards whereby the entire vehicle is chassis-tested.  The agencies propose to retain this approach for Phase 2.  About 90 percent of Class 2b and 3 vehicles are pickup trucks, passenger vans, and work vans that are sold by the original equipment manufacturers as complete vehicles, ready for use on the road.  In addition, most of these complete HD pickups and vans are covered by CAA vehicle emissions standards for criteria pollutants (i.e., they are chassis tested similar to light-duty), expressed in grams per mile.  This distinguishes this category from other, larger heavy-duty vehicles that typically have engines covered by CAA engine emission standards for criteria pollutants, expressed in grams per brake horsepower-hour.  As a result, Class 2b and 3 complete vehicles share both substantive elements and a regulatory structure much more in common with light-duty trucks than with the other heavy-duty vehicles.
Three of these features in common  are especially significant: (1) over 95 percent of the HD pickups and vans sold in the United States are produced by Ford, General Motors, and Chrysler  -  three companies with large light-duty vehicle and light-duty truck sales in the United States; (2) these companies typically base their HD pickup and van designs on higher sales volume light-duty truck platforms and technologies, often incorporating new light-duty truck design features into HD pickups and vans at their next design cycle, and (3) at this time most complete HD pickups and vans are certified to vehicle-based rather than engine-based EPA criteria pollutant and GHG standards.  There is also the potential for substantial GHG and fuel consumption reductions from vehicle design improvements beyond engine changes (such as through optimizing aerodynamics, weight, tires, and accessories), and a single manufacturer is generally responsible for both engine and vehicle design.  All of these factors together suggest that it is still appropriate and reasonable to base standards on performance of the vehicle as a whole, rather than to establish separate engine and vehicle GHG and fuel consumption standards, as is being done for the other heavy-duty categories.  The chassis-based standards approach for complete vehicles was also consistent with NAS recommendations and there was consensus in the public comments on the Phase 1 proposal supporting this approach.  For all of these reasons, the agencies continue to believe that establishing chassis-based standards for Class 2b and 3 complete vehicles is appropriate for Phase 2.  
Work-Based Attributes
In developing the Phase 1 HD rulemaking, the agencies emphasized creating a program structure that would achieve reductions in fuel consumption and GHGs based on how vehicles are used and on the work they perform in the real world.  Work-based measures such as payload and towing capability are key among the things that characterize differences in the design of vehicles, as well as differences in how the vehicles will be used. Vehicles in the 2b and 3 categories have a wide range of payload and towing capacities.  These work-based differences in design and in-use operation are key factors in evaluating technological improvements for reducing CO2 emissions and fuel consumption.  Payload has a particularly important impact on the test results for HD pickup and van emissions and fuel consumption, because testing under existing EPA procedures for criteria pollutants and the Phase 1 standards is conducted with the vehicle loaded to half of its payload capacity (rather than to a flat 300 lb as in the light-duty program), and the correlation between test weight and fuel use is strong.  
Towing, on the other hand, does not directly factor into test weight as nothing is towed during the test.  Hence, setting aside any interdependence between towing capacity and payload, only the higher curb weight caused by any heavier truck components would play a role in affecting measured test results.  However towing capacity can be a significant factor to consider because HD pickup truck towing capacities can be quite large, with a correspondingly large effect on vehicle design.
We note too that, from a purchaser perspective, payload and towing capability typically play a greater role than physical dimensions in influencing purchaser decisions on which heavy-duty vehicle to buy.  For passenger vans, seating capacity is of course a major consideration, but this correlates closely with payload weight.
For these reasons, EPA and NHTSA set Phase 1 standards for HD pickups and vans based on a "work factor" attribute that combines vehicle payload capacity and vehicle towing capacity, in lbs, with an additional fixed adjustment for four-wheel drive (4wd) vehicles.  This adjustment accounts for the fact that 4wd, critical to enabling many off-road heavy-duty work applications, adds roughly 500 lb to the vehicle weight.  The work factor is calculated as follows: 75 percent maximum payload + 25 percent of maximum towing + 375 lbs if 4wd.  Under this approach, target GHG and fuel consumption standards are determined for each vehicle with a unique work factor (analogous to a target for each discrete vehicle footprint in the light-duty vehicle rules).  These targets will then be production weighted and summed to derive a manufacturer's annual fleet average standard for its heavy-duty pickups and vans.  There was widespread support (and no opposition) for the work factor-based approach to standards and fleet average approach to compliance expressed in the comments we received on the Phase 1 rule.  The agencies are proposing to continue using the work factor attribute for the Phase 2 standards and request comments on continuing this approach.
Recognizing that towing is not reflected in the certification test for these vehicles, however, the agencies are requesting comment with respect to the treatment of towing in the work factor, especially for diesel vehicles.  More specifically, does using the existing work factor equation create an inappropriate incentive for manufacturers to provide more towing capability than needed for some operators, or a disincentive for manufacturers to develop vehicles with intermediate capability.  In other words, does it encourage "surplus" towing capability that has no value to vehicle owners and operators?  We recognize that some owners and operators do actually use their vehicles to tow very heavy loads, and that some owners and operators who rarely use their vehicles to tow heavy loads nonetheless prefer to own vehicles capable of doing so.  However, others may never tow such heavy loads and purchase their vehicles for other reasons, such as cargo capacity or off-road capability.  Some of these less demanding (in terms of towing) users may choose to purchase gasoline-powered vehicles that are typically less expensive and have lower GCWR values, an indicator of towing capability.  However, others could prefer a diesel engine more powerful than today's gasoline engines but less powerful than the typical diesel engines found in 2b and 3 pickups today.  In this context, the agencies are considering (but have not yet evaluated) four possible changes to the work factor and how it is applied.  First, the agencies are considering revising the work factor to weight payload by 80 percent and towing by 20 percent.  Second, we are considering capping the amount of towing that could be credited in the work factor.  For example, the work factors for all vehicles with towing ratings above 15,000 lbs could be calculated based on a towing rating of 15,000 lbs.  It is important to be clear that such a provision would not limit the towing capability manufacturers could provide, but would only impact the extent to which the work factor would "reward" towing capability.  Third, the agencies are considering changing the shape of the standard curve for diesel vehicles to become more flat at very high work factors.  A flatter curve would mean that vehicles with very high work factors would be more similar to vehicles with lower work factors than is the case for the proposed curve.  Thus, conceptually, flattening the curves at the high end might be appropriate if we were to determine that these high work factor vehicles actually operate in a manner more like the vehicles with lower work factors.  For example, when not towing and when not hauling a full payload, heavy-duty pickup trucks with very different work factors may actually be performing the same amount of work.  Finally, we are considering having different work factor formulas for pickups and vans, and are also further considering whether any of other changes should be applied differently to pickups than to vans.  We welcome comments on both the extent to which surplus towing may be an issue and whether any of the potential changes discussed above would be appropriate.  Commenters supporting such changes are encouraged to also address any potential accompanying changes.  For example, if we reweight the work factor, would other changes to the coefficients defining the target curves be important to ensure that standards remain at the maximum feasible levels.  (Commenters should, however, recognize that average requirements will, in any event, depend on fleet mix, and the agencies expect to update estimates of future fleet mix before issuing a final rule.)
As noted in the Phase 1 rule, the attribute-based CO2 and fuel consumption standards are meant to be as consistent as practicable from a stringency perspective.  Vehicles across the entire range of the HD pickup and van segment have their respective target values for CO2 emissions and fuel consumption, and therefore all HD pickups and vans will be affected by the standard.  With this attribute-based standards approach, EPA and NHTSA believe there should be no significant effect on the relative distribution of vehicles with differing capabilities in the fleet, which means that buyers should still be able to purchase the vehicle that meets their needs.
Standards 
The agencies are proposing Phase 2 standards based on analysis performed to determine the appropriate HD pickup and van Phase 2 standards and the most appropriate phase in of those standards.  This analysis, described below and in the Draft RIA, considered:
projections of future U.S. sales for HD pickup and vans
the estimates of corresponding CO2 emissions and fuel consumption for these vehicles
forecasts of manufacturers' product redesign schedules
the technology available in new MY 2014 HD pickups and vans to specify preexisting technology content to be included in the analysis fleet (the fleet of vehicles used as a starting point for analysis) extending through MY 2030
the estimated effectiveness, cost, applicability, and availability of technologies for HD pickup and vans
manufacturers' ability to use credit carry-forward
the levels of technology that are projected to be added to the analysis fleet through MY 2030 considering improvements needed in order to achieve compliance with the Phase 1 standards (thus defining the reference fleet - i.e., under the No-Action Alternative -- relative to which to measure incremental impacts of Phase 2 standards), and
the levels of technology that are projected to be added to the analysis fleet through MY2030 considering further improvements needed in order to achieve compliance with standards defining each regulatory (action) alternative for Phase 2.
Based on this analysis, EPA is proposing CO2 attribute-based target standards shown in Figure VI-3 and Figure VI-4, and NHTSA is proposing the equivalent attribute-based fuel consumption target standards, also shown in Figure VI-3 and Figure VI-4, applicable in model year 2021-2027.  As shown in these tables, these standards would be phased in year-by-year commencing in MY 2021.  The agencies are not proposing to change the standards for 2018-2020 and therefore the standards would remain stable at the MY 2018 Phase 1 levels for MYs 2019 and 2020.  EISA requires four years of lead-time and three years stability for NHTSA standards and this period of lead-time and stability for 2018-2020 is consistent with the EISA requirements. For MYs 2021-2027, the agencies are proposing annual reductions in the standards as the primary phase-in of the Phase 2 standards.  The proposed standards become 16 percent more stringent overall between MY 2020 and MY 2027.  This approach to the Phase 2 standards as a whole can be considered a phase-in or implementation schedule of the proposed MY 2027 standards (which, as noted, would apply thereafter unless and until amended).
For EPA, Section 202(a) provides the Administrator with the authority to establish standards, and to revise those standards "from time to time," thus providing the Administrator with considerable discretion in deciding when to revise the Phase 1 MY 2018 standards.  EISA requires that NHTSA provide four full model years of regulatory lead time and three full model years of regulatory stability for its fuel economy standards.  49 U.S.C. 32902(k)(3).  Consistent with these authorities, the agencies are proposing more stringent standards beginning with MY 2021 that consider the level of technology we predict can be applied to new vehicles in the 2021 MY. EPA believes the proposed Phase 2 standards are consistent with CAA requirements regarding lead-time, reasonable cost, and feasibility, and safety.  Manufacturers in the HD pickup and van market segment have relatively few vehicle lines and redesign cycles are typically longer compared to light-duty vehicles.  Also, the timing of vehicle redesigns differs among manufacturers.  To provide lead time needed to accommodate these longer redesign cycles, the proposed Phase 2 GHG standards would not reach their highest stringency until 2027.  Although the proposed standards would become more stringent over time between MYs 2021 and 2027, the agencies expect manufacturers will likely strive to make improvements as part of planned redesigns, such that some model years will likely involve significant advances, while other model years will likely involve little change.  The agencies also expect manufacturers to use program flexibilities (e.g., credit carry-forward provisions and averaging, banking, and trading provisions) to help balance compliance costs over time (including by allowing needed changes to align with redesign schedules).  The agencies are proposing to provide stable standards in MYs 2019-2020 in order to provide necessary lead time for Phase 2.  However, for some manufacturers, the transition to the Phase 2 standards may begin earlier (e.g., as soon as MY 2017) depending on their vehicle redesign cycles.  Although standards are not proposed to change in MYs 2019-2020, manufacturers may introduce additional technologies in order to carry forward corresponding improvements and perhaps generate credits under the 5 year credit carry-forward provisions established in Phase 1 and proposed to continue for Phase 2.  Sections VI.C. and D below provides additional discussion of vehicle redesign cycles and the feasibility of the proposed standards.
While it is unlikely that there is a phase-in approach that would equally fit with all manufacturers' unique product redesign schedules, the agencies recognize that there are other ways the Phase 2 standards could be phased in and request comments on other possible approaches.  One alternative approach would be to phase in the standards in a few step changes, for example in MYs 2021, 2024 and 2027.  Under this example, if the step changes on the order of 5 percent, 10 percent, and 16 percent improvements from the MY 2020 baseline in MYs 2021, 2024 and 2027 respectively, the program would provide CO2 reductions and fuel improvements roughly equivalent to the proposed approach.  Among the factors the agencies would consider in assessing a different phase-in than that proposed would be impacts on lead time, feasibility, cost, CO2 reductions and fuel consumption improvements.  The agencies request that commenters consider all of these factors in their recommendations on phase-in.    
As in Phase 1, the proposed Phase 2 standards would be met on a production-weighted fleet average basis.  No individual vehicle would have to meet a particular fleet average standard.  Nor would all manufacturers have to meet numerically identical fleet average requirement.  Rather, each manufacturer would have its own unique fleet average requirement based on the production- weighted average of the heavy duty pickups and vans it chooses to produce.  Moreover, averaging, banking, and trading provisions, just alluded to and discussed further below, would provide significant additional compliance flexibility in implementing the standards.  It is important to note, however, that while the standards would differ numerically from manufacturer to manufacturer, effective stringency should be essentially the same for each manufacturer. 
Also, as with the Phase 1 standards, the agencies are proposing separate Phase 2 targets for gasoline-fueled (and any other Otto-cycle) vehicles and diesel-fueled (and any other diesel-cycle) vehicles.  The targets would be used to determine the production-weighted fleet average standards that apply to the combined diesel and gasoline fleet of HD pickups and vans produced by a manufacturer in each model year.  The above-proposed stringency increase for Phase 2 applies equally to the separate gasoline and diesel targets.  The agencies considered different rates of increase for the gasoline and diesel targets in order to more equally balance compliance burdens across manufacturers with varying gasoline/diesel fleet mixes. However, at least among major HD pickup and van manufacturers, our analysis suggests limited potential for such optimization, especially considering uncertainties involved with manufacturers' future fleet mix.  The agencies have thus maintained the equivalent rates of stringency increase.  The agencies invite comment on this element.

Figure VI-3: EPA Proposed CO2 Target Standards and NHTSA Proposed Fuel Consumption Target Standards for Diesel HD Pickups and Vans

Figure VI-4: EPA Proposed CO2 Target Standards and NHTSA Proposed Fuel Consumption Target Standards for Gasoline HD Pickups and Vans

Described mathematically, EPA's and NHTSA's proposed target standards are defined by the following formulas:
EPA CO2 Target (g/mile) = [a x WF] + b
NHTSA Fuel Consumption Target (gallons/100 miles) =  [c x WF] + d
Where:
      WF = Work Factor = [0.75 x (Payload Capacity + xwd)] + [0.25 x Towing Capacity]
Payload Capacity = GVWR (lb)  -  Curb Weight (lb)
xwd = 500 lb if the vehicle is equipped with 4wd, otherwise equals 0 lb.
Towing Capacity = GCWR (lb)  -  GVWR (lb)
Coefficients a, b, c, and d are taken from Table VI-2.  
Table VI-2 Proposed Phase 2 Coefficients for HD Pickup and Van Target Standards 
                                Diesel Vehicles
Model Year
                                                                              a
                                                                              b
                                                                              c
                                                                              d
                                                                    2018-2020 a
                                                                         0.0416
                                                                            320
                                                                       0.000409
                                                                           3.14
                                                                           2021
                                                                         0.0406
                                                                            312
                                                                       0.000399
                                                                           3.06
                                                                           2022
                                                                         0.0395
                                                                            304
                                                                       0.000389
                                                                           2.98
                                                                           2023
                                                                         0.0386
                                                                            297
                                                                       0.000379
                                                                           2.91
                                                                           2024
                                                                         0.0376
                                                                            289
                                                                       0.000370
                                                                           2.84
                                                                           2025
                                                                         0.0367
                                                                            282
                                                                       0.000360
                                                                           2.77
                                                                           2026
                                                                         0.0357
                                                                            275
                                                                       0.000351
                                                                           2.70
                                                                 2027 and later
                                                                         0.0348
                                                                            268
                                                                       0.000343
                                                                           2.63
                               Gasoline Vehicles
Model Year
                                                                              a
                                                                              b
                                                                              c
                                                                              d
                                                                    2018-2020 a
                                                                          0.044
                                                                            339
                                                                       0.000495
                                                                           3.81
                                                                           2021
                                                                         0.0429
                                                                            331
                                                                       0.000483
                                                                           3.71
                                                                           2022
                                                                         0.0418
                                                                            322
                                                                       0.000471
                                                                           3.62
                                                                           2023
                                                                         0.0408
                                                                            314
                                                                       0.000459
                                                                           3.53
                                                                           2024
                                                                         0.0398
                                                                            306
                                                                       0.000447
                                                                           3.44
                                                                           2025
                                                                         0.0388
                                                                            299
                                                                       0.000436
                                                                           3.36
                                                                           2026
                                                                         0.0378
                                                                            291
                                                                       0.000425
                                                                           3.27
                                                                 2027 and later
                                                                         0.0369
                                                                            284
                                                                       0.000415
                                                                           3.19
      [a] Phase 1 primary phase-in coefficients.  Alternative phase-in coefficients are different in MY2018 only.
As noted above, the standards are not proposed to change from the final Phase 1 standards for MYs 2018-2020.  The MY 2018-2020 standards are shown in the Figures and tables above for reference.   
NHTSA and EPA have also analyzed regulatory alternatives to the proposed standards, as discussed in Sections VI.C and D and Section X. below.  The agencies request comments on all of the alternatives analyzed for the proposal, but request comments on Alternative 4 in particular.  The agencies believe Alternative 4 has the potential to be the maximum feasible alternative; however, based on the evidence currently before us, EPA and NHTSA have outstanding questions regarding relative risks and benefits of Alternative 4 due to the timeframe envisioned by that alternative.  Alternative 4 would provide less lead time for the complete phase-in of the proposed Phase 2 standards based on an annual improvement of 3.5 percent per year in MYs 2021-2025 compared to the proposed Alternative 3 per year improvement of 2.5 percent in MYs 2021-2027.  The CO2 and fuel consumption attribute-based target standards for the Alternative 4 phase-in are shown in Figure VI-5 and Figure VI-6 below.  As the target curves for Alternative 4 show in comparison to the target curves shown above for the proposed Alternative 3, the final Phase 2 standards would result in essentially the same level of stringency under either alternative.  However, the Phase 2 standards would be fully implemented two years earlier, in MY 2025, under Alternative 4.  The agencies are seriously considering whether this Alternative 4 (i.e., the proposed standards but with two years less lead-time) would be realistic and feasible, as described in Sections VI.C and D, Section X, and in the Draft RIA Chapter 11.  Alternative 4 is predicated on shortened lead time that would result in accelerated and in some cases higher adoption rates of the same technologies on which the proposed Alternative 3 is predicated.  The agencies request comments, data, and information that would help inform determination of the maximum feasible (for NHTSA) and appropriate (for EPA) stringency for HD pickups and vans and are particularly interested in information and data related to the expected adoption rates of different emerging technologies, such as mild and strong hybridization.


Figure VI-5: Alternative 4 EPA CO2 Target Standards and NHTSA Fuel Consumption Target Standards for Diesel HD Pickups and Vans

Figure VI-6: Alternative 4 EPA CO2 Target Standards and NHTSA Fuel Consumption Target Standards for Gasoline HD Pickups and Vans

As with Phase 1 standards, to calculate a manufacturer's HD pickup and van fleet average standard, the agencies are proposing that separate target curves be used for gasoline and diesel vehicles.  The agencies' proposed standards result in approximately 16 percent reductions in CO2 and fuel consumption for both diesel and gasoline vehicles relative to the MY 2018 Phase 1 standards for HD pickup trucks and vans.  These target reductions are based on the agencies' assessment of the feasibility of incorporating technologies (which differ for gasoline and diesel powertrains) in the 2021-2027 model years, and on the differences in relative efficiency in the current gasoline and diesel vehicles.  
The agencies generally prefer to set standards that do not distinguish between fuel types where technological or market-based reasons do not strongly argue otherwise.  However, as with Phase 1, we continue to believe that fundamental differences between spark ignition and compression ignition engines warrant unique fuel standards, which is also important in ensuring that our program maintains product choices available to vehicle buyers.  In fact, gasoline and diesel fuel behave so differently in the internal combustion engine that they have historically required unique test procedures, emission control technologies and emission standards. These technological differences between gasoline and diesel engines for GHGs and fuel consumption exist presently and will continue to exist after Phase 1 and through Phase 2 until advanced research evolves the gasoline fueled engine to diesel-like efficiencies. This will require significant technological breakthroughs currently in early stages of research such as homogeneous charge compression ignition (HCCI) or similar concepts.  Because these technologies are still in the early research stages, we believe the proposed separate fuel type standards are appropriate in the timeframe of this rule to protect for the availability of both gasoline and diesel engines and will result in roughly equivalent redesign burdens for engines of both fuel types as evidenced by feasibility and cost analysis in RIA Chapter 10.  The agencies request comment on the level of stringency of the proposed standards, the continued separate targets for gasoline and diesel HD pickups and vans, and the continued use of the work-based attribute approach described above.
The proposed NHTSA fuel consumption target curves and the EPA GHG target curves are equivalent.  The agencies established the target curves using the direct relationship between fuel consumption and CO2 using conversion factors of 8,887 g CO2/gallon for gasoline and 10,180 g CO2/gallon for diesel fuel.
It is expected that measured performance values for CO2 will generally be equivalent to fuel consumption.  However, Phase 1 established a provision that EPA is not proposing to change for Phase 2 that allows manufacturers, if they choose, to use CO2 credits to help demonstrate compliance with N2O and CH4 emissions standards, by expressing any N2O and CH4 under compliance in terms of their CO2-equivalent and applying CO2 credits as needed.  For test families that do not use this compliance alternative, the measured performance values for CO2 and fuel consumption will be equivalent because the same test runs and measurement data will be used to determine both values, and calculated fuel consumption will be based on the same conversion factors that are used to establish the relationship between the CO2 and fuel consumption target curves (8,887 g CO2/gallon for gasoline and 10,180 g CO2/gallon for diesel fuel).  For manufacturers that choose to use the EPA provision for CO2 credit use in demonstrating N2O and CH4 compliance, compliance with the CO2 standard will not be directly equivalent to compliance with the NHTSA fuel consumption standard. 
What Are the HD Pickup and Van Test Cycles and Procedures
The Phase 1 program established testing procedures for HD pickups and vans and NHTSA and EPA are not proposing to change these testing protocols.  The vehicles would continue to be tested using the same heavy-duty chassis test procedures currently used by EPA for measuring criteria pollutant emissions from these vehicles, but with the addition of the highway fuel economy test cycle (HFET).  These test procedures are used by manufacturers for certification and emissions compliance demonstrations and by the agencies for compliance verification and enforcement.  Although the highway cycle driving pattern is identical to that of the light-duty test, other test parameters for running the HFET, such as test vehicle loaded weight, are identical to those used in running the current EPA Federal Test Procedure for complete heavy-duty vehicles. Please see Section II.C (2) of the Phase 1 preamble (76 FR 57166) for a discussion of how HD pickups and vans would be tested.  
One item that the agencies are considering to change is how vehicles are categorized into test weight bins.  Under the current test procedures, vehicles are tested at 500 lb increments of inertial weight classes when testing at or above 5500 lbs test weight.  For example, all vehicles having a calculated test weight basis of 11,251 to 11,750 pounds would be tested 11,500 pounds (i.e., the midpoint of the range).  However, for some vehicles, the existence of these bins and the large intervals between bins may reduce or eliminate the incentive for mass reduction for some vehicles, as a vehicle may require significant mass reduction before it could switch from one test weight bin to the next lower bin.  For other vehicles, these bins may unduly reward relatively small reductions of vehicle mass, as a vehicle's mass may be only slightly greater than that needed to be assigned a 500-pound lighter inertia weight class.  For example, for a vehicle with a calculated test weight basis of 11,700 pounds, a manufacturer would receive no regulatory benefit for reducing the vehicle weight by 400 pounds, because the vehicle would stay within the same weight bracket.  The agencies do recognize that the test weight bins allow for some reduction in testing burden as many vehicles can be grouped together under a single test.  For Phase 2, the agencies seek comment on whether the test weight bins should be changed in order to allow for more realistic testing of HD pickups and vans and better capture of the improvements due to mass reduction.  Some example changes could include reducing the five hundred pound interval between bins to smaller intervals similar to those allowed for vehicles tested below 5,500 lbs. test weight, or allowing any test weight value that is not fixed to a particular test weight bin.  The latter scenario would still allow some grouping of vehicles to reduce test burden, and the agencies also seek comment on how vehicles would be grouped and how the test weight of this group of vehicles should be selected.  
We further seek comment as to whether there may be a more appropriate method such as allowing analytical adjustment of the CO2 levels and fuel consumption within a vehicle weight class to more precisely account for the individual vehicle models performance.  For example, could an equation like the one specified in 40 CFR 1037.104(g) for analytically adjusting CO2 emissions be used.  The agencies are specifically considering an approach in which vehicles are tested in the same way with the same test weights, but manufacturers have the option to either accept the emission results as provided under the current regulations, or choose to adjust the emissions based on the actual test weight basis (actual curb plus half payload) instead of the equivalent test weight for the 500 test weight interval.  Should the agencies finalize this as an option, manufacturers choosing to adjust their emissions would be required to do so for all of their vehicles, and not just for those with test weights below the midpoint of the range. 
Fleet Average Standards
NHTSA and EPA are proposing to retain the fleet average standards approach finalized in the Phase 1 rule and structurally similar to light-duty Corporate Average Fuel Economy (CAFE) and GHG standards.  The fleet average standard for a manufacturer is a production-weighted average of the work factor-based targets assigned to unique vehicle configurations within each model type produced by the manufacturer in a model year.  Each manufacturer would continue to have an average GHG requirement and an average fuel consumption requirement unique to its new HD pickup and van fleet in each model year, depending on the characteristics (payload, towing, and drive type) of the vehicle models produced by that manufacturer, and on the U.S.-directed production volume of each of those models in that model year.  Vehicle models with larger payload/towing capacities and/or four-wheel drive have individual targets at numerically higher CO2 and fuel consumption levels than less capable vehicles, as discussed in Section VI.B(1). 
The fleet average standard with which the manufacturer must comply would continue to be based on its final production figures for the model year, and thus a final assessment of compliance would occur after production for the model year ends.  The assessment of compliance also must consider the manufacturer's use of carry-forward and carry-back credit provisions included in the averaging, banking, and trading program.  Because compliance with the fleet average standards depends on actual test group production volumes, it is not possible to determine compliance at the time the manufacturer applies for and receives an (initial) EPA certificate of conformity for a test group.  Instead, at certification the manufacturer would demonstrate a level of performance for vehicles in the test group, and make a good faith demonstration that its fleet, regrouped by unique vehicle configurations within each model type, is expected to comply with its fleet average standard when the model year is over.  EPA will issue a certificate for the vehicles covered by the test group based on this demonstration, and will include a condition in the certificate that if the manufacturer does not comply with the fleet average, then production vehicles from that test group will be treated as not covered by the certificate to the extent needed to bring the manufacturer's fleet average into compliance.  As in the parallel program for light-duty vehicles, additional "model type" testing will be conducted by the manufacturer over the course of the model year to supplement the initial test group data.  The emissions and fuel consumption levels of the test vehicles will be used to calculate the production-weighted fleet averages for the manufacturer, after application of the appropriate deterioration factor to each result to obtain a full useful life value.  Please see Section II.C (3)(a) of the Phase 1 preamble (76 FR 57167) for further discussion of the fleet average approach for HD pickups and vans.
In-use Standards
  Section 202(a)(1) of the CAA specifies that EPA set emissions standards that are applicable for the useful life of the vehicle.  EPA is proposing to continue the in-use standards approach for individual vehicles that EPA finalized for the Phase 1 program. NHTSA did not adopt Phase 1 in-use standards and is not proposing in-use standards for Phase 2.  For the EPA program, compliance with the in-use standard for individual vehicles and vehicle models does not impact compliance with the fleet average standard, which will be based on the production-weighted average of the new vehicles.  Vehicles that fail to meet their in-use emission standards would be subject to recall to correct the noncompliance.
As with Phase 1, EPA proposes that the in-use Phase 2 standards for HD pickups and vans be established by adding an adjustment factor to the full useful life emissions used to calculate the GHG fleet average.  EPA proposes that each model's in-use CO2 standard be the model-specific level used in calculating the fleet average, plus 10 percent.  No adverse comments were received on this provision during the Phase 1 rulemaking.  Please see Section II.C (3)(b) of the Phase 1 preamble (76 FR 57167) for further discussion of in-use standards for HD pickups and vans.  
For Phase 1, EPA aligned the useful life for GHG emissions with the useful life that was in place for criteria pollutants: 11 years or 120,000 miles, whichever occurs first (40 CFR 86.1805-04(a)).  Since the Phase 1 rule was finalized, EPA updated the useful life for criteria pollutants as part of the Tier 3 rulemaking.  The new useful life implemented for Tier 3 is 150,000 miles or 15 years, whichever occurs first.  EPA proposes that the useful life for GHG emissions also be updated to 150,000 miles/15 years starting in MY 2021 when the Phase 2 standards begin so that the useful life remains aligned for GHG and criteria pollutant standards long term.  With the relatively flat deterioration generally associated with CO2 and the proposed in-use standard adjustment factor discussed above, EPA does not believe the proposed change in useful life would significantly affect the feasibility of the proposed Phase 2 standards.   EPA requests comments on the proposed change to useful life.
Other GHG Standards for HD Pickups and Vans
This section addresses greenhouse gases other than CO2.  Note that since these are greenhouse gases not directly related to fuel consumption, NHTSA does not have equivalent standards.
Nitrous Oxide (N2O) and Methane (CH4)
In the Phase 1 rule, EPA established emissions standards for HD pickups and vans for both nitrous oxide (N2O) and methane (CH4).  Similar to the CO2 standard approach, the N2O and CH4 emission levels of a vehicle are based on a composite of the light-duty FTP and HFET cycles with the same 55 percent city weighting and 45 percent highway weighting.  The N2O and CH4 standards were both set by EPA at 0.05 g/mile. Unlike the CO2 standards, averaging between vehicles is not allowed.  The standards are designed to prevent increases in N2O and CH4 emissions from current levels, i.e., a no-backsliding standard.  EPA is not proposing to change the N2O or CH4 standards or related provisions established in the Phase 1 rule. Please see Phase 1 preamble Section II.E. (76 FR 57188-57193) for additional discussion of N2O and CH4 emissions and standards.
Across both current gasoline- and diesel-fueled heavy-duty vehicle designs, emissions of CH4 and N2O are relatively low and the intent of the cap standards is to ensure that future vehicle technologies or fuels do not result in an increase in these emissions.  Given the global warning potential (GWP) of CH4, the 0.05 g/mile cap standard is equivalent to about 1.25 g/mile CO2, which is much less than 1 percent of the overall GHG emissions of most HD pickups and vans.  The effectiveness of oxidation of CH4 using a three-way or diesel oxidation catalyst is limited by the activation energy, which tends to be higher where the number of carbon atoms in the hydrocarbon molecule is low and thus CH4 is very stable.  At this time we are not aware of any technologies beyond the already present catalyst systems which are highly effective at oxidizing most hydrocarbon species for gasoline and diesel fueled engines that would further lower the activation energy across the catalyst or increase the energy content of the exhaust (without further increasing fuel consumption and CO2 emissions) to further reduce CH4 emissions at the tailpipe.  We note that we are not aware of any new technologies that would allow us to adopt more stringent CH4 and N2O standards at this time.  The CH4 standard remains an important backstop to prevent future increases in CH4 emissions.  
N2O is emitted from gasoline and diesel vehicles mainly during specific catalyst temperature conditions conducive to N2O formation.  The 0.05 g/mile standard, which translates to a CO2-equivalent value of 14.9 g/mile, ensures that systems are not designed in a way that emphasizes efficient NOx control while allowing the formation of significant quantities of N2O.  The Phase 1 N2O standard of 0.05 g/mile for pickups and vans was finalized knowing that it is more stringent than the Phase 1 N2O engine standard of 0.10 g/hp-hr, currently being revaluated as discussed in Section II.D.3.  EPA continues to believe that the 0.05 g/mile standard provides the necessary assurance that N2O will not significantly increase, given the mix of gasoline and diesel fueled engines in this market and the upcoming implementation of the light-duty and heavy-duty (up to 14,000 lbs. GVWR) Tier 3 NOx standards.  EPA knows of no technologies that would lower N2O emissions beyond the control provided by the precise emissions control systems already being implemented to meet EPA's criteria pollutant standards.  Therefore, EPA continues to believe the 0.05 g/mile N2O standard remains appropriate.   
If a manufacturer is unable to meet the N2O or CH4 cap standards, the EPA program allows the manufacturer to comply using CO2 credits.  In other words, a manufacturer may offset any N2O or CH4 emissions above the standard by taking steps to further reduce CO2.  A manufacturer choosing this option would use GWPs to convert its measured N2O and CH4 test results that are in excess of the applicable standards into CO2eq to determine the amount of CO2 credits required.  For example, a manufacturer would use 25 Mg of positive CO2 credits to offset 1 Mg of negative CH4 credits or use 298 Mg of positive CO2 credits to offset 1 Mg of negative N2O credits.  By using the GWP of N2O and CH4, the approach recognizes the inter-correlation of these compounds in impacting global warming and is environmentally neutral for demonstrating compliance with the individual emissions caps.  Because fuel conversion manufacturers certifying under 40 CFR Part 85, subpart F do not participate in ABT programs, EPA included in the Phase 1 rule a compliance option for fuel conversion manufacturers to comply with the N2O and CH4 standards that is similar to the credit program described above.  See 76 FR 57192/3.  The compliance option will allow conversion manufacturers, on an individual engine family basis, to convert CO2 over compliance into CO2 equivalents of N2O and/or CH4 that can be subtracted from the CH4 and N2O measured values to demonstrate compliance with CH4 and/or N2O standards.  EPA did not include similar provisions allowing over compliance with the N2O or CH4 standards to serve as a means to generate CO2 credits because the CH4 and N2O standards are cap standards representing levels that all but the worst vehicles should already be well below.  Allowing credit generation against such cap standard would provide a windfall credit without any true GHG reduction.  EPA proposes to maintain these provisions for Phase 2 as they provide important flexibility without reducing the overall GHG benefits of the program.
EPA is requesting comment on updating GWPs used in the calculation of credits discussed above.  Please see the full discussion of this issue and request for comments provided in Sections II.D and XI.D.  
Air Conditioning Related Emissions
Air conditioning systems contribute to GHG emissions in two ways  -  direct emissions through refrigerant leakage and indirect exhaust emissions due to the extra load on the vehicle's engine to provide power to the air conditioning system.  HFC refrigerants, which are powerful GHG pollutants, can leak from the A/C system.  This includes the direct leakage of refrigerant as well as the subsequent leakage associated with maintenance and servicing, and with disposal at the end of the vehicle's life.  Currently, the most commonly used refrigerant in automotive applications  -  R134a, has a high GWP. Due to the high GWP of R134a, a small leakage of the refrigerant has a much greater global warming impact than a similar amount of emissions of CO2 or other mobile source GHGs.  
In Phase 1, EPA finalized low leakage requirement for all air conditioning systems installed in 2014 model year and later HDVs, with the exception of Class 2b-8 vocational vehicles. As discussed in Section V.B.3, EPA is proposing to extend leakage standards to vocational vehicles for Phase 2.  For air conditioning systems with a refrigerant capacity greater than 733 grams, EPA finalized a leakage standard which is a "percent refrigerant leakage per year" to assure that high-quality, low-leakage components are used in each air conditioning system design.  EPA finalized a standard of 1.50 percent leakage per year for heavy-duty pickup trucks and vans and Class 7 and 8 tractors.  See Section II.E.5. of the Phase 1 preamble (76 FR 57194-57195) for further discussion of the A/C leakage standard.
 In addition to use of leak-tight components in air conditioning system design, manufacturers could also decrease the global warming impact of leakage emissions by adopting systems that use alternative, lower global warming potential (GWP) refrigerants, to replace the refrigerant most commonly used today, HFC-134a (R-134a).  The potential use of alternative refrigerants in HD vehicles and EPA's proposed revisions to 40 CFR 1037.115 so that use of certain lower GWP refrigerants would cause an air conditioning system in a HD vehicle to be deemed to comply with the low leakage standard is discussed in Section I.F. above.
In addition to direct emissions from refrigerant leakage, air conditioning systems also create indirect exhaust emissions due to the extra load on the vehicle's engine to provide power to the air conditioning system.  These indirect emissions are in the form of the additional CO2 emitted from the engine when A/C is being used due to the added loads.  Unlike direct emissions which tend to be a set annual leak rate not directly tied to usage, indirect emissions are fully a function of A/C usage.  These indirect CO2 emissions are associated with air conditioner efficiency, since (as just noted) air conditioners create load on the engine.  See 74 FR 49529.  In Phase 1, the agencies did not set air conditioning efficiency standards for vocational vehicles, combination tractors, or heavy-duty pickup trucks and vans.  The CO2 emissions due to air conditioning systems in these heavy-duty vehicles were estimated to be minimal compared to their overall emissions of CO2.  This continues to be the case.  For this reason, EPA is not proposing to establish standards for A/C efficiency for Phase 2.
NHTSA and EPA request comments on all aspects of the proposed HD pickup and van standards and program elements described in this section.
Feasibility of Pickup and Van Standards
EPCA and EISA require NHTSA to "implement a commercial medium- and heavy-duty on-highway vehicle and work truck fuel efficiency improvement program designed to achieve the maximum feasible improvement" and to establish corresponding fuel consumption standards "that are appropriate, cost-effective, and technologically feasible."  Section 202 (a) (1) and (2) of the Clean Air Act require EPA to establish standards for emissions of pollutants from new motor vehicles and engines which emissions cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare, which include GHGs.  See section I.E. above. Under section 202 (a) (1) and (2), EPA considers such issues as technology effectiveness, its cost (both per vehicle, per manufacturer, and per consumer), the lead time necessary to implement the technology, and based on this the feasibility and practicability of potential standards; the impacts of potential standards on emissions reductions of both GHGs and non-GHG emissions; the impacts of standards on oil conservation and energy security; the impacts of standards on fuel savings by customers; the impacts of standards on the truck industry; other energy impacts; as well as other relevant factors such as impacts on safety.  
As part of the feasibility analysis of potential standards for HD pickups and vans, the agencies have applied DOT's CAFE Compliance and Effects Modeling System (sometimes referred to as "the CAFE model" or "the Volpe model"), which DOT's Volpe National Transportation Systems Center (Volpe Center) developed, maintains, and applies to support NHTSA CAFE analyses and rulemakings.  The agencies used this model to determine the range of stringencies that might be achievable through the use of technology that is projected to be available in the Phase 2 time frame.  From these runs, the agencies identified the stringency level that would be technology-forcing (i.e. reflect levels of stringency based on performance of merging as well as currently available control technologies), but leave manufacturers the flexibility to adopt varying technology paths for compliance and allow adequate lead time to develop, test, and deploy the range of technologies. 
As noted in Section I and discussed further below, the analysis considers two reference cases for HD pickups and vans, a flat baseline (designated Alternative 1a) where no improvements are modeled beyond those needed to meet Phase 1 standards and a dynamic baseline (designated Alternative 1b) where certain cost-effective technologies (i.e., those that payback within a 6 month period) are assumed to be applied by manufacturers to improve fuel efficiency beyond the Phase 1 requirements in the absence of new Phase 2 standards. NHTSA considered its primary analysis to be based on the more dynamic baseline whereas EPA considered both reference cases.  As shown below and in Sections VII through X, using the two different reference cases has little impact on the results of the analysis and would not lead to a different conclusion regarding the appropriateness of the proposed standards.  As such, the use of different reference cases corroborates the results of the overall analysis.
 The proposed phase-in schedule of reduction of 2.5 percent per year in fuel consumption and CO2 levels relative to the 2018 MY Phase 1 standard level, starting in MY 2021 and extending through MY 2027, was chosen to strike a balance between meaningful reductions in the early years and providing manufacturers with needed lead time via a gradually accelerating ramp-up of technology penetration.  By expressing the phase-in in terms of increasing year to year stringency for each manufacturer, while also providing for credit generation and use (including averaging, carry-forward, and carry-back), we believe our proposed program would afford manufacturers substantial flexibility to satisfy the proposed phase-in through a variety of pathways: the gradual application of technologies across the fleet, greater application levels on only a portion of the fleet, and a sufficiently broad set of available technologies to account for the variety of current technology deployment among manufacturers and the lowest-cost compliance paths available to each.
We decided to propose a phased implementation schedule that would be appropriate to accommodate manufacturers' redesign workload and product schedules, especially in light of this sector's limited product offerings and long product cycles.  We did not estimate the cost of implementing the proposed standards immediately in 2021 without a phase-in, but we qualitatively assessed it to be somewhat higher than the cost of the phase-in we are proposing, due to the workload and product cycle disruptions it could cause, and also due to manufacturers' resulting need to develop some of these technologies for heavy-duty applications sooner than or simultaneously with light-duty development efforts.  See 75 FR 25451/3 (May 7, 2010) (documenting types of drastic cost increases associated with trying to accelerate redesign schedules and concluding that "[w]e believe that it would be an inefficient use of societal resources to incur such costs when they can be obtained much more cost effectively just one year later").  On the other hand, waiting until 2027 before applying any new standards could miss the opportunity to achieve meaningful and cost-effective early reductions not requiring a major product redesign.
The agencies believe that Alternative 4 has the potential to be the maximum feasible alternative, however, the agencies are uncertain that the potential technologies and market penetration rates included in Alternative 4 are currently technologically feasible.  Alternative 4 would ultimately reach the same levels of stringency as Alternative 3, but would do so with less lead time.  This could require the application of a somewhat different (and possibly broader) application of the projected technologies depending on product redesign cycles.  We expect, in fact, that some of these technologies may well prove feasible and cost-effective in this timeframe, and may even become technologies of choice for individual manufacturers.    
Additionally, Alternative 3 provides two more years of phase-in than Alternative 4, which eases compliance burden by having more vehicle redesigns and lower stringency during the phase-in period.  Historically, the vehicles in this segment are typically only redesigned every 6-10 years, so many of the vehicles may not even be redesigned during the timeframe of the stringency increase.  In this case, a manufacturer must either make up for any vehicle that falls short of its target through some combination of early compliance, overcompliance, credit carry-forward and carry-back, and redesigning vehicles more frequently.  Each of these will increase technology costs to the manufacturers and vehicle purchasers, and early redesigns will significantly increases capital costs and product development costs.  Also, the longer phase-in time for Alternative 3 means that any manufacturer will have a slightly lower target to meet from 2021-2026 than for the shorter phase-in of Alternative 4, though by 2027 the manufacturers will have the same target in either alternative.
Alternative 4 is projected to be met using a significantly higher degree of hybridization including the use of more strong hybrids, compared to the proposed preferred Alternative 3.  In order to comply with a 3.5 percent per year increase in stringency over MYs 2021-2025, manufacturers would need to adopt more technology compared to the 2.5 percent per year increase in stringency over MYs 2021-2027.  The two years of additional lead time provided by Alternative 3 to achieve the proposed final standards reduces the potential number of strong hybrids projected to be used by allowing for other more cost effective technologies to be more fully utilized across the fleet.  Alternative 4 is also projected to result in higher costs than the proposed Alternative 3.  The agencies' analysis is discussed in detail below.  
In some cases, the model selects strong hybrids as a more cost effective technology over certain other technologies including stop-start and mild hybrid.  In other words, strong hybrids are not a technology of last resort in the analysis.  The agencies believe it is technologically feasible to apply hybridization to HD pick-ups and vans in the lead time provided.  However, strong hybrids present challenges in this market segment compared to light-duty where there are several strong hybrids already available.  The agencies do not believe that at this stage there is enough information about the viability of strong hybrid technology in this vehicle segment to assume that they can be a part of large-volume deployment strategies for regulated manufacturers.  For example, we believe that hybrid electric technology could provide significant GHG and fuel consumption benefits, but we recognize that there is uncertainty at this time over the real world effectiveness of these systems in HD pickups and vans, and over customer acceptance of the technology for vehicles with high GCWR towing large loads.  Further, the development, design, and tooling effort needed to apply this technology to a vehicle model is quite large, and might not be cost-effective due to the small sales volumes relative to the light-duty sector.  Additionally, the analysis does not project that engines would be down-sized in conjunction with hybridization for HD pick-ups and vans due to the importance pickup trucks buyers place on engine horsepower and torque necessary to meet towing objectives.  Therefore, with no change projected for engine size, the strong hybrid costs do not include costs for engine changes.  In light-duty, the use of smaller engines facilitates much of a hybrid's benefit. 
Due to these considerations, the agencies have conducted a sensitivity analysis that is based on the use of no strong hybrids.  The results of the analysis are also discussed below.  The analysis indicates that there would be a technology pathway that would allow manufacturers to meet both the proposed preferred Alternatives 3 and Alternative 4 without the use of strong hybrids.  However, the analysis indicates that costs would be higher and the cost effectiveness would be lower under the no strong hybrid approach, especially for Alternative 4, which provides less lead time to manufacturers. 
We also considered proposing less stringent standards under which manufacturers could comply by deploying a more limited set of technologies.  However, our assessment concluded with a high degree of confidence that the technologies on which the proposed standards are premised would be available at reasonable cost in the 2021-2027 timeframe, and that the phase-in and other flexibility provisions allow for their application in a very cost-effective manner, as discussed in this section below.
More difficult to characterize is the degree to which more or less stringent standards might be appropriate because of under- or over-estimating the costs or effectiveness of the technologies whose performance is the basis of the proposed standards.  For the most part, these technologies have not yet been applied to HD pickups and vans, even on a limited basis.  We are therefore relying to some degree on engineering judgment in predicting their effectiveness.  Even so, we believe that we have applied this judgment using the best information available, primarily from a NHTSA contracted study at SwRI and our recent rulemaking on light-duty vehicle GHGs and fuel economy, and have generated a robust set of effectiveness values. Chapter 10 of the draft RIA provides a detailed description of the CAFE Model and the analysis performed for the proposal.
Regulatory Alternatives Considered by the Agencies
As discussed above, the agencies are proposing standards defined by fuel consumption and GHG targets that continue through model year 2020 unchanged from model year 2018, and then increase in stringency at an annual rate of 2.5 percent through model year 2027.  In addition to this regulatory alternative, the agencies also considered a no-action alternative under which standards remain unchanged after model year 2018, as well as three other alternatives, defined by annual stringency increases of 2.0 percent, 3.5 percent, and 4.0 percent during 2021-2025.  For each of the "action alternatives" (i.e., those involving stringency increases beyond the no-action alternative), the annual stringency increases are applied as follows:  An annual stringency increase of r is applied by multiplying the model year 2020 target functions (identical to those applicable to model year 2018) by 1  -  r to define the model year 2021 target functions, multiplying the model year 2021 target functions by 1  -  r to define the model year 2022 target functions, continuing through 2025 for all alternatives except for the preferred Alternative 3 which extends through 2027.  In summary, the agencies have considered the following five regulatory alternatives in Table VI-3.
                      Table VI-3 Regulatory Alternatives
Regulatory Alternative
                          Annual Stringency Increase

                                   2019-2020
                                   2021-2025
                                   2026-2027
1: No Action
                                     None
                                     None
                                     None
2: 2.0%/y
                                     None
                                     2.0%
                                     None
3: 2.5%/y
                                     None
                                     2.5%
                                     2.5%
4: 3.5%/y
                                     None
                                     3.5%
                                     None
5: 4.0%/y
                                     None
                                     4.0%
                                     None

DOT CAFE Model
DOT developed the CAFE model in 2002 to support the 2003 issuance of CAFE standards for MYs 2005-2007 light trucks.  DOT has since significantly expanded and refined the model, and has applied the model to support every ensuing CAFE rulemaking for both light-duty and heavy-duty.  For this analysis, the model was reconfigured to use the work based attribute metric of "work factor" established in the Phase 1 rule instead of the light duty "footprint" attribute metric. 
Although the CAFE model can also be used for more aggregated analysis (e.g., involving "representative vehicles", single-year snapshots, etc.), NHTSA designed the model with a view toward (a) detailed simulation of manufacturers' potential actions given a defined set of standards, followed by (b) calculation of resultant impacts and economic costs and benefits.  The model is intended to describe actions manufacturers could take in light of defined standards and other input assumptions and estimates, not to predict actions manufacturers will take in light of competing product and market interests (e.g. engine power, customer features, technology acceptance, etc.).
For this rule, the agencies conducted coordinated and complementary analyses using two analytical methods for the heavy-duty pick up and van segment by employing both DOT's CAFE model and EPA's MOVES model.  The agencies used EPA's MOVES model to estimate fuel consumption and emissions impacts for tractor-trailers (including the engine that powers the tractor), and vocational vehicles (including the engine that powers the vehicle).  Additional calculations were performed to determine corresponding monetized program costs and benefits.  For heavy-duty pickups and vans, the agencies performed complementary analyses, which we refer to as "Method A" and "Method B".  In Method A, the CAFE model was used to project a pathway the industry could use to comply with each regulatory alternative and the estimated effects on fuel consumption, emissions, benefits and costs.  In Method B, the CAFE model was used to project a pathway the industry could use to comply with each regulatory alternative, along with resultant impacts on per vehicle costs, and the MOVES model was used to calculate corresponding changes in total fuel consumption and annual emissions.  Additional calculations were performed to determine corresponding monetized program costs and benefits.  NHTSA considered Method A as its central analysis and Method B as a supplemental analysis.  EPA considered the results of both methods.  The agencies concluded that both methods led the agencies to the same conclusions and the same selection of the proposed standards.  See Section VII for additional discussion of these two methods.
As a starting point, the model makes use of an input file defining the analysis fleet -- that is, a set of specific vehicle models (e.g., Ford F250) and model configurations (e.g., Ford F250 with 6.2-liter V8 engine, 4WD, and 6-speed manual transmission) estimated or assumed to be produced by each manufacturer in each model year to be included in the analysis.  The analysis fleet includes key engineering attributes (e.g., curb weight, payload and towing capacities, dimensions, presence of various fuel-saving technologies) of each vehicle model, engine, and transmissions, along with estimates or assumptions of future production volumes.  It also specifies the extent to which specific vehicle models share engines, transmissions, and vehicle platforms, and describes each manufacturer's estimated or assumed product cadence (i.e., timing for freshening and redesigning different vehicles and platforms).  This input file also specifies a payback period used to estimate the potential that each manufacturer might apply technology to improve fuel economy beyond levels required by standards.  The file used for this analysis was created from 2014 manufacturer compliance reports for the base sales and technology information, and a future fleet projection created from a combination of data from a sales forecast that the agencies purchased from IHS Automotive and total volumes class 2b and 3 fleet volumes from 2014 AEO Reference Case.  A complete description of the future fleet is available in Draft RIA Chapter 10.
A second input file to the model contains a variety of contextual estimates and assumptions.  Some of these inputs, such as future fuel prices and vehicle survival and mileage accumulation (versus vehicle age), are relevant to estimating manufacturers' potential application of fuel-saving technologies.  Some others, such as fuel density and carbon content, vehicular and upstream emission factors, the social cost of carbon dioxide emissions, and the discount rate, are relevant to calculating physical and economic impacts of manufacturers' application of fuel-saving technologies.
A third input file contains estimates and assumptions regarding the future applicability, availability, efficacy, and cost of various fuel-saving technologies.  Efficacy is expressed in terms of the percentage reduction in fuel consumption, cost is expressed in dollars, and both efficacy and cost are expressed on an incremental basis (i.e., estimates for more advanced technologies are specified as increments beyond less advanced technologies).  The input file also includes "synergy factors" used to make adjustments accounting for the potential that some combinations of technologies may result fuel savings or costs different from those indicated by incremental values.
Finally, a fourth model input file specifies standards to be evaluated.  Standards are defined on a year-by-year basis separately for each regulatory class (passenger cars, light trucks, and heavy-duty pickups and vans).  Regulatory alternatives are specified as discrete scenarios, with one scenario defining the no-action alternative or "baseline", all other scenarios defining regulatory alternatives to be evaluated relative to that no-action alternative.
Given these inputs, the model estimates each manufacturer's potential year-by-year application of fuel-saving technologies to each engine, transmission, and vehicle.  Subject to a range of engineering and planning-related constraints (e.g., secondary axle disconnect can't be applied to 2-wheel drive vehicles, many major technologies can only be applied practicably as part of a vehicle redesign, and applied technologies carry forward between model years), the model attempts to apply technology to each manufacturer's fleet in a manner that minimizes "effective costs" (accounting, in particular, for technology costs and avoided fuel outlays), continuing to add improvements as long as doing so would help toward compliance with specified standards or would produce fuel savings that "pay back" at least as quickly as specified in the input file mentioned above.
After estimating the extent to which each manufacturer might add fuel-saving technologies under each specified regulatory alternative, the model calculates a range of physical impacts, such as changes in highway travel (i.e., VMT), changes in fleetwide fuel consumption, changes in highway fatalities, and changes in vehicular and upstream greenhouse gas and criteria pollutant emissions.  The model also applies a variety of input estimates and assumptions to calculate economic costs and benefits to vehicle owners and society, based on these physical impacts.
Since the manufacturers of HD pickups and vans generally only have one basic pick-up truck and van with different versions ((i.e., different wheelbases, cab sizes, two-wheel drive, four-wheel drive, etc.) there exists less flexibility than in the light-duty fleet to coordinate model improvements over several years.  As such, the CAFE model allows changes to the HD pickups and vans to meet new standards according to predefined redesign cycles included as a model input.  As noted above, the opportunities for large-scale changes (e.g., new engines, transmission, vehicle body and mass) thus occur less frequently than in the light-duty fleet, typically at spans of eight or more years for this analysis.  However, opportunities for gradual improvements not necessarily linked to large scale changes can occur between the redesign cycles (i.e., model refresh).  Examples of such improvements are upgrades to an existing vehicle model's engine, transmission and aftertreatment systems.  Given the long redesign cycle used in this analysis and the understanding with respect to where the different manufacturers are in that cycle, the agencies have initially determined that the full implementation of the proposed standards would be feasible and appropriate by the 2027 model year.
This analysis reflects several changes made to the model since 2012, when NHTSA used the model to estimate the effects, costs, and benefits of final CAFE standards for light-duty vehicles produced during MYs 2017-2021, and augural standards for MYs 2022-2025.  Some of these changes specifically enable analysis of potential fuel consumption standards (and, hence, CO2 emissions standards harmonized with fuel consumption standards) for heavy-duty pickups and vans; other changes implement more general improvements to the model.  Key changes include the following:
   * Changes to accommodate standards for heavy-duty pickups and vans, including attribute-based standards involving targets that vary with "work factor".
   * Explicit calculation of test weight, taking into account test weight "bins" and differences in the definition of test weight for light-duty vehicles (curb weight plus 300 pound) and heavy-duty pickups and vans (average of GVWR and curb weight).
   * Procedures to estimate increases in payload when curb weight is reduced, increases in towing capacity if GVWR is reduced, and calculation procedures to correspondingly update calculated work factors.
   * Inclusion of technologies not included in prior analyses.
   * Changes to enable more explicit accounting for shared vehicle platforms and adoption and "inheritance" of major engine changes.
   *    Expansion of the Monte Carlo simulation procedures used to perform probabilistic uncertainty analysis.
   In addition to the inputs summarized above, the agencies' analysis of potential standards for HD pickups and vans makes use of a range of other estimates and assumptions specified as inputs to the CAFE modeling system.  Some significant inputs (e.g., estimates of future fuel prices) also applicable to other HD segments are discussed below in Section IX.  Others more specific to the analysis of HD pickups and vans are listed as follows, with additional details in section D:

   * Vehicle survival and mileage accumulation
   * VMT rebound
   * On-road "gap" in fuel consumption
   * Fleet population profile
   * Past fuel consumption levels
   * Long-term fuel consumption levels
   * Payback period
   * Coefficients for fatality calculations
   * Compliance credits carried-forward
   * Emission factors for non-CO2 emissions
   * Refueling time benefits
   * External Costs of travel
   * Ownership and operating costs

   The CAFE model and its modifications for this rulemaking are described in more detail in Section 0below as well as the Draft RIA Chapter 10.
How Did the Agencies Develop the Analysis Fleet
In order to more accurately estimate the impacts of potential standards, the agencies are estimating the composition of the future vehicle fleet.  Projections of the future vehicle fleet are also done for both vocational vehicles and tractors.  The procedure for pickups and vans is more detailed, though, in order to show the differences for each manufacturer in the segment.  Doing so enables estimation of the extent to which each manufacturer may need to add technology in response to a given series of attribute-based standards, accounting for the mix and fuel consumption of vehicles in each manufacturer's regulated fleet.  The agencies create an analysis fleet in order to track the volumes and types of fuel economy-improving and CO2-reducing technologies that are already present in the existing fleet of Class 2b and 3 vehicles. This aspect of the analysis fleet helps to keep the CAFE model from adding technologies to vehicles that already have these technologies, which would result in "double counting" of technologies' costs and benefits.  An additional step involved projecting the fleet sales into MYs 2019-2030.  This represents the fleet volumes that the agencies believe would exist in MYs 2019-2030. The CAFE model considers the actual redesign years of each vehicle platform for each manufacturer.  Due to credit banking, some manufacturers may not need to add technology to comply with the standards until later model years, which may be after the rulemaking period.  Therefore, it is necessary to run the model until all of the vehicle technology changes have stabilized. 
Most of the information about the vehicles that make up the 2014 analysis fleet was gathered from the 2014 Pre-Model Year Reports submitted to EPA by the manufacturers under Phase 1 of Fuel Efficiency and GHG Emission Program for Medium- and Heavy-Duty Trucks, MYs 2014-2018. The major manufacturers of class 2b and class 3 trucks (Chrysler, Ford and GM) were asked to voluntarily submit updates to their Pre-Model Year Reports.  Updated data were provided by Chrysler and GM.  The agencies used these updated data in constructing the analysis fleet for these manufacturers.  The agencies agreed to treat this information as Confidential Business Information (CBI) until the publication of the NPRM.  This information can be made public at this time because by now all MY2014 vehicle models have been produced, which makes data about them essentially public information.
In addition to information about each vehicle, the agencies need additional information about the fuel economy-improving/CO2-reducing technologies already on those vehicles in order to assess how much and which technologies to apply to determine a path toward future compliance.  To correctly account for the cost and effectiveness of adding technologies, it is necessary to know the technology penetration in the existing vehicle fleet. Otherwise, "double-counting" of technology could occur.  Thus, the agencies augmented this information with publicly-available data that include more complete technology descriptions, e.g. for specific engines and transmissions.

The analysis fleet also requires projections of sales volumes for the years of the rulemaking analysis.  The agencies relied on the MY 2014 pre-model-year compliance submissions from manufacturers to provide sales volumes at the model level based on the level of disaggregation in which the models appear in the compliance data.  However, the agencies only use these reported volumes without adjustment for MY 2014.  For all future model years, we combine the manufacturer submissions with sales projections from the 2014 Annual Energy Outlook Reference Case and IHS Automotive to determine model variant level sales volumes in future years.
For more detail on how the analysis fleet and sales volume projections were developed, please see Section D below as well as the draft RIA Chapter 10.
What Technologies Did the Agencies Consider
The agencies considered over 35 vehicle technologies that manufacturers could use to improve the fuel consumption and reduce CO2 emissions of their vehicles during MYs 2021-2027.  The majority of the technologies described in this section are readily available, well known and proven in other vehicle sectors, and could be incorporated into vehicles once production decisions are made.  Other technologies considered may not currently be in production, but are beyond the research phase and under development, and are expected to be in production in highway vehicles over the next few years.  These are technologies that are capable of achieving significant improvements in fuel economy and reductions in CO2 emissions, at reasonable costs.  The agencies did not consider technologies in the research stage because there is insufficient time for such technologies to move from research to production during the model years covered by this proposed action.  However, we are considering and seek comment on advanced technology credits to encourage the development of such technologies, as discussed below in Section VI.E. 

The technologies considered in the agencies' analysis are briefly described below.  They fall into five broad categories: engine technologies, transmission technologies, vehicle technologies, electrification/accessory technologies, and hybrid technologies.

In this class of trucks and vans, diesel engines are installed in about half of all vehicles. The buyer's decision to purchase a diesel versus gasoline engine depends on several factors including initial purchase price, fuel operating costs, durability, towing capability and payload capacity amongst other reasons.  As discussed in IV.B. above, the agencies generally prefer to set standards that do not distinguish between fuel types where technological or market-based reasons do not strongly argue otherwise.  However, as with Phase 1, we continue to believe that fundamental differences between spark ignition and compression ignition engines warrant unique fuel standards, which is also important in ensuring that our program maintains product choices available to vehicle buyers.  Therefore, we are proposing separate standards for gasoline and diesel vehicles and in the context of our technology discussion for heavy-duty pickups and vans, we are treating gasoline and diesel engines separately so each has a set of baseline technologies.  We discuss performance improvements in terms of changes to those baseline engines.  Our cost and inventory estimates contained elsewhere reflect the current fleet baseline with an appropriate mix of gasoline and diesel engines.  Note that we are not basing the proposed standards on a targeted switch in the mix of diesel and gasoline vehicles.  We believe our proposed standards require similar levels of technology development and cost for both diesel and gasoline vehicles.  Hence the proposed program is not intended to force, nor discourage, changes in a manufacturer's fleet mix between gasoline and diesel vehicles.  Types of engine technologies that improve fuel efficiency and reduce CO2 emissions include the following:

   * Low-friction lubricants  -  low viscosity and advanced low friction lubricant oils are now available with improved performance and better lubrication.  If manufacturers choose to make use of these lubricants, they would need to make engine changes and possibly conduct durability testing to accommodate the low-friction lubricants.  
      
   * Reduction of engine friction losses  -  can be achieved through low-tension piston rings, roller cam followers, improved material coatings, more optimal thermal management, piston surface treatments, and other improvements in the design of engine components and subsystems that improve engine operation. 
      
   * Reduction of engine parasitic demand  -  mechanical engine load reduction can be achieved by variable-displacement oil pumps, higher-efficiency direct injection fuel pumps, and variable speed/displacement coolant pumps.
      
   * Cylinder deactivation  -  deactivates the intake and exhaust valves and prevents fuel injection into some cylinders during light-load operation.  The engine runs temporarily as though it were a smaller engine which substantially reduces pumping losses.  
      
   * Variable valve timing  -  alters the timing of the intake valve, exhaust valve, or both, primarily to reduce pumping losses, increase specific power, and control residual gases.

   * Variable valve lift  -  alters the intake valve lift in order to reduce pumping losses and more efficiently ingest air.
      
   * Stoichiometric gasoline direct-injection technology  -  injects fuel at high pressure directly into the combustion chamber to improve cooling of the air/fuel charge within the cylinder, which allows for higher compression ratios and increased thermodynamic efficiency.
      
   * Cooled exhaust gas recirculation  -  technology that conceptually involves utilizing EGR as a charge diluent for controlling combustion temperatures and cooling the EGR prior to its introduction to the combustion system. 
    ::	Turbocharging and downsizing  -  technology approach that conceptually involves decreasing the displacement and cylinder count to improve efficiency when not demanding regular high loads and adding a turbocharger to recover any loss to the original larger engine peak operating power.  This technology was limited in this analysis to vehicles that are not expected to operate at high trailer towing levels and instead are more akin to duty cycles of light duty (i.e. V6 vans).
    ::	Lean-burn combustion  -  concept that gasoline engines that are normally stoichiometric mainly for emission reasons can run lean over a range of operating conditions and utilize diesel like aftertreatment systems to control NOx.  For this analysis, we determined that the modal operation nature of this technology to currently only be beneficial at light loads would not be appropriate for a heavy duty application purchased specifically for its high work and load capability.
   * Diesel engine improvements and diesel aftertreatment improvements  -  improved turbocharger, EGR systems, and advanced timing can provide more efficient combustion and, hence, lower fuel consumption.  Aftertreatment systems are a relatively new technology on diesel vehicles and, as such, improvements are expected in coming years that allow the effectiveness of these systems to improve while reducing the fuel and reductant demands of current systems. 
      
Types of transmission technologies considered include:

   * Eight-speed automatic transmissions  -  the gear span, gear ratios, and control system are optimized for a broader range of efficient engine operating conditions.
      
   * High efficiency transmission  -  significant reduction of internal parasitic losses such as pumps gear bands, etc.

   * Driveline friction reduction  -  reduction in the driveline friction from improvements to bearings, seals and other machining tolerances in the axles and transfer cases.
      
   * Secondary axle disconnect  -  disconnecting of some rotating components in the front axle on 4wd vehicles when the secondary axle is not needed for traction.
      
      
Types of vehicle technologies considered include:

   * Low-rolling-resistance tires  -  have characteristics that reduce frictional losses associated with the energy dissipated in the deformation of the tires under load, therefore improving fuel efficiency and reducing CO2 emissions.
      
   * Aerodynamic drag reduction  -  is achieved by changing vehicle shape or reducing frontal area, including skirts, air dams, underbody covers, and more aerodynamic side view mirrors.
      
   * Mass reduction and material substitution  -  Mass reduction encompasses a variety of techniques ranging from improved design and better component integration to application of lighter and higher-strength materials.  Mass reduction is further compounded by reductions in engine power and ancillary systems (transmission, steering, brakes, suspension, etc.).  The agencies recognize there is a range of diversity and complexity for mass reduction and material substitution technologies and there are many techniques that automotive suppliers and manufacturers are using to achieve the levels of this technology that the agencies have modeled in our analysis for this program.  
      
Types of electrification/accessory and hybrid technologies considered include:

   * Electric power steering  -  are electrically-assisted steering systems that have advantages over traditional hydraulic power steering because it replaces a continuously operated hydraulic pump, thereby reducing parasitic losses from the accessory drive.
      
   * Improved accessories  -  may include high efficiency alternators, electrically driven (i.e., on-demand) water pumps and cooling fans.  This excludes other electrical accessories such as electric oil pumps and electrically driven air conditioner compressors.
      
   * Mild hybrid  -  a small, engine-driven (through a belt or other mechanism) electric motor/generator/battery combination to enable features such as start-stop, energy recovery, and launch assist.

   * Strong hybrid  -  a powerful electric motor/generator/battery system coupled to the powertrain to enable features such as start-stop, and significant levels of launch assist, electric operation, and brake energy recovery. For HD pickups and vans, the engine coupled with the strong hybrid system would remain unchanged in power and torque to ensure vehicle performance at all times, even if the hybrid battery is depleted.
      
   * Air Conditioner Systems  -  These technologies include improved hoses, connectors and seals for leakage control.  They also include improved compressors, expansion valves, heat exchangers and the control of these components for the purposes of improving tailpipe CO2 emissions as a result of A/C use. 
      
How Did the Agencies Determine the Costs and Effectiveness of Each of These Technologies

Building on the technical analysis underlying the 2017-2025 MY light-duty vehicle rule, the 2014-2018 MY heavy-duty vehicle rule, and the 2014 SwRI report, the agencies took a fresh look at technology cost and effectiveness values for purposes of this proposal.  For costs, the agencies reconsidered both the direct (or "piece") costs and indirect costs of individual components of technologies.  For the direct costs, the agencies followed a bill of materials (BOM) approach employed by the agencies in the light-duty rule as well as referencing costs from the 2014-2018 MY heavy-duty vehicle rule and a new cost survey performed by Tetra Tech in 2014.

For two technologies, stoichiometric gasoline direct injection (SGDI) and turbocharging with engine downsizing, the agencies relied to the extent possible on the available tear-down data and scaling methodologies used in EPA's ongoing study with FEV, Incorporated.  This study consists of complete system tear-down to evaluate technologies down to the nuts and bolts to arrive at very detailed estimates of the costs associated with manufacturing them.  

For the other technologies, considering all sources of information and using the BOM approach, the agencies worked together intensively to determine component costs for each of the technologies and build up the costs accordingly.  Where estimates differ between sources, we have used engineering judgment to arrive at what we believe to be the best cost estimate available today, and explained the basis for that exercise of judgment.

Once costs were determined, they were adjusted to ensure that they were all expressed in 2012 dollars (see Section IX.B.1.e of this preamble), and indirect costs were accounted for using a methodology consistent with the new ICM approach developed by EPA and used in the Phase 1 rule, and the 2012-2016 and 2017-2025 light-duty rules.  NHTSA and EPA also reconsidered how costs should be adjusted by modifying or scaling content assumptions to account for differences across the range of vehicle sizes and functional requirements, and adjusted the associated material cost impacts to account for the revised content.  We present the individual technology costs used in this analysis in Chapter 2.12 of the Draft RIA.

Regarding estimates for technology effectiveness, the agencies used the estimates from the 2014 Southwest Research Institute study as a baseline, which was designed specifically to inform this rulemaking. In addition, the agencies used 2017-2025 light-duty rule as a reference, and adjusted these estimates as appropriate, taking into account the unique requirement of the heavy-duty test cycles to test at curb weight plus half payload versus the light-duty requirement of curb plus 300 lb.  The adjustments were made on an individual technology basis by assessing the specific impact of the added load on each technology when compared to the use of the technology on a light-duty vehicle.  The agencies also considered other sources such as the 2010 NAS Report, recent CAFE compliance data, and confidential manufacturer estimates of technology effectiveness.  The agencies reviewed effectiveness information from the multiple sources for each technology and ensured that such effectiveness estimates were based on technology hardware consistent with the BOM components used to estimate costs.  Together, the agencies compared the multiple estimates and assessed their validity, taking care to ensure that common BOM definitions and other vehicle attributes such as performance and drivability were taken into account.    

The agencies note that the effectiveness values estimated for the technologies may represent average values applied to the baseline fleet described earlier, and do not reflect the potentially limitless spectrum of possible values that could result from adding the technology to different vehicles.  For example, while the agencies have estimated an effectiveness of 0.5 percent for low friction lubricants, each vehicle could have a unique effectiveness estimate depending on the baseline vehicle's oil viscosity rating.  Similarly, the reduction in rolling resistance (and thus the improvement in fuel efficiency and the reduction in CO2 emissions) due to the application of LRR tires depends not only on the unique characteristics of the tires originally on the vehicle, but on the unique characteristics of the tires being applied, characteristics which must be balanced between fuel efficiency, safety, and performance.  Aerodynamic drag reduction is much the same -- it can improve fuel efficiency and reduce CO2 emissions, but it is also highly dependent on vehicle-specific functional objectives.  For purposes of this NPRM, the agencies believe that employing average values for technology effectiveness estimates is an appropriate way of recognizing the potential variation in the specific benefits that individual manufacturers (and individual vehicles) might obtain from adding a fuel-saving technology.    

The following contains a description of technologies the agencies considered in the analysis for this proposal. 
Engine Technologies
The agencies reviewed the engine technology estimates used in the 2017-2025 light-duty rule, the 2014-2018 heavy-duty rule, and the 2014 SwRI report. In doing so the agencies reconsidered all available sources and updated the estimates as appropriate.  The section below describes both diesel and gasoline engine technologies considered for this program.
Low Friction Lubricants
One of the most basic methods of reducing fuel consumption in both gasoline and diesel engines is the use of lower viscosity engine lubricants.  More advanced multi-viscosity engine oils are available today with improved performance in a wider temperature band and with better lubricating properties.  This can be accomplished by changes to the oil base stock (e.g., switching engine lubricants from a Group I base oils to lower-friction, lower viscosity Group III synthetic) and through changes to lubricant additive packages (e.g., friction modifiers and viscosity improvers).  The use of 5W-30 motor oil is now widespread and auto manufacturers are introducing the use of even lower viscosity oils, such as 5W-20 and 0W-20, to improve cold-flow properties and reduce cold start friction.  However, in some cases, changes to the crankshaft, rod and main bearings and changes to the mechanical tolerances of engine components may be required.  In all cases, durability testing would be required to ensure that durability is not compromised.  The shift to lower viscosity and lower friction lubricants will also improve the effectiveness of valvetrain technologies such as cylinder deactivation, which rely on a minimum oil temperature (viscosity) for operation.
Engine Friction Reduction
In addition to low friction lubricants, manufacturers can also reduce friction and improve fuel consumption by improving the design of both diesel and gasoline engine components and subsystems.  Approximately 10 percent of the energy consumed by a vehicle is lost to friction, and just over half is due to frictional losses within the engine.  Examples include improvements in low-tension piston rings, piston skirt design, roller cam followers, improved crankshaft design and bearings, material coatings, material substitution, more optimal thermal management, and piston and cylinder surface treatments.  Additionally, as computer-aided modeling software continues to improve, more opportunities for evolutionary friction reductions may become available.  All reciprocating and rotating components in the engine are potential candidates for friction reduction, and minute improvements in several components can add up to a measurable fuel efficiency improvement.  
Engine Parasitic Demand Reduction
In addition to physical engine friction reduction, manufacturers can reduce the mechanical load on the engine from parasitics, such as oil, fuel, and coolant pumps.  The high-pressure fuel pumps of direct-injection gasoline and diesel engines have particularly high demand.  Example improvements include variable speed or variable displacement water pumps, variable displacement oil pumps, more efficient high pressure fuel pumps, valve train upgrades and shutting off piston cooling when not needed.
Coupled Cam Phasing
Valvetrains with coupled (or coordinated) cam phasing can modify the timing of both the inlet valves and the exhaust valves an equal amount by phasing the camshaft of an overhead valve engine.  For overhead valve engines, which have only one camshaft to actuate both inlet and exhaust valves, couple cam phasing is the only variable valve timing implementation option available and requires only one cam phaser.
Cylinder Deactivation
In conventional spark-ignited engines throttling the airflow controls engine torque output.  At partial loads, efficiency can be improved by using cylinder deactivation instead of throttling.  Cylinder deactivation can improve engine efficiency by disabling or deactivating (usually) half of the cylinders when the load is less than half of the engine's total torque capability  -  the valves are kept closed, and no fuel is injected  -  as a result, the trapped air within the deactivated cylinders is simply compressed and expanded as an air spring, with reduced friction and heat losses.  The active cylinders combust at almost double the load required if all of the cylinders were operating.  Pumping losses are significantly reduced as long as the engine is operated in this "part-cylinder" mode.
 Cylinder deactivation control strategy relies on setting maximum manifold absolute pressures or predicted torque within a range in which it can deactivate the cylinders.  Noise and vibration issues reduce the operating range to which cylinder deactivation is allowed, although manufacturers are exploring vehicle changes that enable increasing the amount of time that cylinder deactivation might be suitable.  Some manufacturers may choose to adopt active engine mounts and/or active noise cancellations systems to address Noise Vibration and Harshness (NVH) concerns and to allow a greater operating range of activation.  
Cylinder deactivation has seen a recent resurgence thanks to better valvetrain designs and engine controls.  General Motors and Chrysler Group have incorporated cylinder deactivation across a substantial portion of their V8-powered lineups.

Stoichiometric Gasoline Direct Injection
SGDI engines inject fuel at high pressure directly into the combustion chamber (rather than the intake port in port fuel injection).  SGDI requires changes to the injector design, an additional high pressure fuel pump, new fuel rails to handle the higher fuel pressures and changes to the cylinder head and piston crown design.  Direct injection of the fuel into the cylinder improves cooling of the air/fuel charge within the cylinder, which allows for higher compression ratios and increased thermodynamic efficiency without the onset of combustion knock.  Recent injector design advances, improved electronic engine management systems and the introduction of multiple injection events per cylinder firing cycle promote better mixing of the air and fuel, enhance combustion rates, increase residual exhaust gas tolerance and improve cold start emissions.  SGDI engines achieve higher power density and match well with other technologies, such as boosting and variable valvetrain designs.
Several manufacturers have recently introduced vehicles with SGDI engines, including GM and Ford and have announced their plans to increase dramatically the number of SGDI engines in their portfolios.
Turbocharging and Downsizing
The specific power of a naturally aspirated engine is primarily limited by the rate at which the engine is able to draw air into the combustion chambers.  Turbocharging and supercharging (grouped together here as boosting) are two methods to increase the intake manifold pressure and cylinder charge-air mass above naturally aspirated levels.  Boosting increases the airflow into the engine, thus increasing the specific power level, and with it the ability to reduce engine displacement while maintaining performance.  This effectively reduces the pumping losses at lighter loads in comparison to a larger, naturally aspirated engine.
Almost every major manufacturer currently markets a vehicle with some form of boosting.  While boosting has been a common practice for increasing performance for several decades, turbocharging has considerable potential to improve fuel economy and reduce CO2 emissions when the engine displacement is also reduced.  Specific power levels for a boosted engine often exceed 100 hp/L, compared to average naturally aspirated engine power densities of roughly 70 hp/L.  As a result, engines can be downsized roughly 30 percent or higher while maintaining similar peak output levels.  In the last decade, improvements to turbocharger turbine and compressor design have improved their reliability and performance across the entire engine operating range.  New variable geometry turbines and ball-bearing center cartridges allow faster turbocharger spool-up (virtually eliminating the once-common "turbo lag") while maintaining high flow rates for increased boost at high engine speeds.  Low speed torque output has been dramatically improved for modern turbocharged engines.  However, even with turbocharger improvements, maximum engine torque at very low engine speed conditions, for example launch from standstill, is increased less than at mid and high engine speed conditions.  The potential to downsize engines may be less on vehicles with low displacement to vehicle mass ratios for example a very small displacement engine in a vehicle with significant curb weight, in order to provide adequate acceleration from standstill, particularly up grades or at high altitudes.  
The use of GDI in combination with turbocharging and charge air cooling reduces the fuel octane requirements for knock limited combustion enabling the use of higher compression ratios and boosting pressures.  Recently published data with advanced spray-guided injection systems and more aggressive engine downsizing targeted towards reduced fuel consumption and CO2 emissions reductions indicate that the potential for reducing CO2 emissions for turbocharged, downsized GDI engines may be as much as 15 to 30 percent relative to port-fuel-injected engines.[14,15,16,17,18]  Confidential manufacturer data suggests an incremental range of fuel consumption and CO2 emission reduction of 4.8 to 7.5 percent for turbocharging and downsizing.  Other publicly-available sources suggest a fuel consumption and CO2 emission reduction of 8 to 13 percent compared to current-production naturally-aspirated engines without friction reduction or other fuel economy technologies: a joint technical paper by Bosch and Ricardo suggesting fuel economy gain of 8 to 10 percent for downsizing from a 5.7 liter port injection V8 to a 3.6 liter V6 with direct injection using a wall-guided direct injection system;  a Renault report suggesting a 11.9 percent NEDC fuel consumption gain for downsizing from a 1.4 liter port injection in-line 4-cylinder engine to a 1.0 liter in-line 4-cylinder engine, also with wall-guided direct injection;  and a Robert Bosch paper suggesting a 13 percent NEDC gain for downsizing to a turbocharged DI engine, again with wall-guided injection.  These reported fuel economy benefits show a wide range depending on the SGDI technology employed.
Note that for this analysis we determined that this technology path is only applicable to heavy duty applications that have operating conditions more closely associated with light duty vehicles.  This includes vans designed mainly for cargo volume or modest payloads having similar GCWR to light duty applications.  These vans cannot tow trailers heavier than similar light duty vehicles and are largely already sharing engines of significantly smaller displacement and cylinder count compared to heavy duty vehicles designed mainly for trailer towing.
Cooled Exhaust-Gas Recirculation
Cooled exhaust gas recirculation or Boosted EGR is a combustion concept that involves utilizing EGR as a charge diluent for controlling combustion temperatures and cooling the EGR prior to its introduction to the combustion system.  Higher exhaust gas residual levels at part load conditions reduce pumping losses for increased fuel economy.  The additional charge dilution enabled by cooled EGR reduces the incidence of knocking combustion and obviates the need for fuel enrichment at high engine power.  This allows for higher boost pressure and/or compression ratio and further reduction in engine displacement and both pumping and friction losses while maintaining performance.  Engines of this type use GDI and both dual cam phasing and discrete variable valve lift.  The EGR systems considered in this proposed rule, consistent with the proposal, would use a dual-loop system with both high and low pressure EGR loops and dual EGR coolers.  The engines would also use single-stage, variable geometry turbocharging with higher intake boost pressure available across a broader range of engine operation than conventional turbocharged SI engines.  Such a system is estimated to be capable of an additional 3 to 5 percent effectiveness relative to a turbocharged, downsized GDI engine without cooled-EGR.  The agencies have also considered a more advanced version of such a cooled EGR system that employs very high combustion pressures by using dual stage turbocharging.
Diesel Engine Technologies 
Diesel engines have several characteristics that give them superior fuel efficiency compared to conventional gasoline, spark-ignited engines.  Pumping losses are much lower due to lack of (or greatly reduced) throttling.  The diesel combustion cycle operates at a higher compression ratio, with a very lean air/fuel mixture, and turbocharged light-duty diesels typically achieve much higher torque levels at lower engine speeds than equivalent-displacement naturally-aspirated gasoline engines.  Additionally, diesel fuel has a higher energy content per gallon.   However, diesel fuel also has a higher carbon to hydrogen ratio, which increases the amount of CO2 emitted per gallon of fuel used by approximately 15 percent over a gallon of gasoline.
Based on confidential business information and the 2010 NAS Report, two major areas of diesel engine design could be improved during the timeframe of this proposed rule.  These areas include aftertreatment improvements and a broad range of engine improvements.
Aftertreatment Improvements
The HD diesel pickup and van segment has largely adopted the SCR type of aftertreatment system to comply with criteria pollutant emission standards.  As the experience base for SCR expands over the next few years, many improvements in this aftertreatment system such as construction of the catalyst, thermal management, and reductant optimization may result in a reduction in the amount of fuel used in the process.  However, due to uncertainties with these improvements regarding the extent of current optimization and future criteria emissions obligations, the agencies are not considering aftertreatment improvements as a fuel-saving technology in the rulemaking analysis.
Engine Improvements
Diesel engines in the HD pickup and van segment are expected to have several improvements in their base design in the 2021-2027 timeframe.  These improvements include items such as improved combustion management, optimal turbocharger design, and improved thermal management.
Transmission Technologies 
The agencies have also reviewed the transmission technology estimates used in the 2017-2015 light-duty and 2014-2018 heavy-duty final rules.  In doing so, NHTSA and EPA considered or reconsidered all available sources including the 2014 SwRI report and updated the estimates as appropriate.  The section below describes each of the transmission technologies considered for the proposal.
Automatic 8-Speed Transmissions
Manufacturers can also choose to replace 6-speed automatic transmissions with 8-speed automatic transmissions.  Additional ratios allow for further optimization of engine operation over a wider range of conditions, but this is subject to diminishing returns as the number of speeds increases.  As additional gear sets are added, additional weight and friction are introduced requiring additional countermeasures to offset these losses.  Some manufacturers are replacing 6-speed automatics already, and 7- and 8-speed automatics have entered production. 
High Efficiency Transmission
For this proposal, a high efficiency transmission refers to some or all of a suite of incremental transmission improvement technologies that should be available within the 2019 to 2027 timeframe.  The majority of these improvements address mechanical friction within the transmission.  These improvements include but are not limited to: shifting clutch technology improvements, improved kinematic design, dry sump lubrication systems, more efficient seals, bearings and clutches (reducing drag), component superfinishing and improved transmission lubricants.
Electrification/Accessory Technologies
Electrical Power Steering or Electrohydraulic Power Steering
Electric power steering (EPS) or Electrohydraulic power steering (EHPS) provides a potential reduction in CO2 emissions and fuel consumption over hydraulic power steering because of reduced overall accessory loads.  This eliminates the parasitic losses associated with belt-driven power steering pumps which consistently draw load from the engine to pump hydraulic fluid through the steering actuation systems even when the wheels are not being turned.  EPS is an enabler for all vehicle hybridization technologies since it provides power steering when the engine is off.  EPS may be implemented on most vehicles with a standard 12V system.  Some heavier vehicles may require a higher voltage system which may add cost and complexity.
Improved Accessories
The accessories on an engine, including the alternator, coolant and oil pumps are traditionally mechanically-driven.  A reduction in CO2 emissions and fuel consumption can be realized by driving them electrically, and only when needed ("on-demand").  
Electric water pumps and electric fans can provide better control of engine cooling.  For example, coolant flow from an electric water pump can be reduced and the radiator fan can be shut off during engine warm-up or cold ambient temperature conditions which will reduce warm-up time, reduce warm-up fuel enrichment, and reduce parasitic losses.

Indirect benefit may be obtained by reducing the flow from the water pump electrically during the engine warm-up period, allowing the engine to heat more rapidly and thereby reducing the fuel enrichment needed during cold operation and warm-up of the engine.  Faster oil warm-up may also result from better management of the coolant warm-up period. Further benefit may be obtained when electrification is combined with an improved, higher efficiency engine alternator used to supply power to the electrified accessories.  

Intelligent cooling can more easily be applied to vehicles that do not typically carry heavy payloads, so larger vehicles with towing capacity present a challenge, as these vehicles have high cooling fan loads.  However, towing vehicles tend to have large cooling system capacity and flow scaled to required heat rejection levels when under full load situations such as towing at GCWR in extreme ambient conditions.  During almost all other situations, this design characteristic may result in unnecessary energy usage for coolant pumping and heat rejection to the radiator.   

The agencies considered whether to include electric oil pump technology for the rulemaking.  Because it is necessary to operate the oil pump any time the engine is running, electric oil pump technology has insignificant effect on efficiency.  Therefore, the agencies decided to not include electric oil pump technology.
Mild Hybrid
Mild hybrid systems offer idle-stop functionality and a limited level of regenerative braking and power assist.  These systems replace the conventional alternator with a belt or crank driven starter/alternator and may add high voltage electrical accessories (which may include electric power steering and an auxiliary automatic transmission pump).  The limited electrical requirements of these systems allow the use of lead-acid batteries or supercapacitors for energy storage, or the use of a small lithium-ion battery pack.
Strong Hybrid
A hybrid vehicle is a vehicle that combines two significant sources of propulsion energy, where one uses a consumable fuel (like gasoline), and one is rechargeable (during operation, or by another energy source).  Hybrid technology is well established in the U.S. light-duty market and more manufacturers are adding hybrid models to their lineups.  Hybrids reduce fuel consumption through three major mechanisms:
   * The internal combustion engine can be optimized (through downsizing, modifying the operating cycle, or other control techniques) to operate at or near its most efficient point more of the time.  Power loss from engine downsizing can be mitigated by employing power assist from the secondary power source.

   * A significant amount of the energy normally lost as heat while braking can be captured and stored in the energy storage system for later use.

   * The engine is turned off when it is not needed, such as when the vehicle is coasting or when stopped.

Hybrid vehicles utilize some combination of the three above mechanisms to reduce fuel consumption and CO2 emissions.  The effectiveness of fuel consumption and CO2 reduction depends on the utilization of the above mechanisms and how aggressively they are pursued.  One area where this variation is particularly prevalent is in the choice of engine size and its effect on balancing fuel economy and performance.  Some manufacturers choose not to downsize the engine when applying hybrid technologies.  In these cases, overall performance (acceleration) is typically improved beyond the conventional engine. However, fuel efficiency improves less than if the engine was downsized to maintain the same performance as the conventional version.  The non-downsizing approach is used for vehicles like trucks where towing and/or hauling are an integral part of their performance requirements.  In these cases, if the engine is downsized, the battery can be quickly drained during a long hill climb with a heavy load, leaving only a downsized engine to carry the entire load.  Because towing capability is currently a heavily-marketed truck attribute, manufacturers are hesitant to offer a truck with downsized engine which can lead to a significantly diminished towing performance when the battery state of charge level is low, and therefore engines are traditionally not downsized for these vehicles.
Strong Hybrid technology utilizes an axial electric motor connected to the transmission input shaft and connected to the engine crankshaft through a clutch.  The axial motor is a motor/generator that can provide sufficient torque for launch assist, all electric operation, and the ability to recover significant levels of braking energy.
Vehicle Technologies
Mass Reduction
    Mass reduction is a technology that can be used in a manufacturer's strategy to meet the Heavy Duty Greenhouse Gas Phase 2 standards.  Vehicle mass reduction (also referred to as "down-weighting" or `light-weighting"), decreases fuel consumption and GHG emissions by reducing the energy demand needed to overcome inertia forces, and rolling resistance. Automotive companies have worked with mass reduction technologies for many years and a lot of these technologies have been used in production vehicles. The weight savings achieved by adopting mass reduction technologies offset weight gains due to increased vehicle size, larger powertrains, and increased feature content (sound insulation, entertainment systems, improved climate control, panoramic roof, etc.). Sometimes mass reduction has been used to increase vehicle towing and payload capabilities.
    Manufacturers employ a systematic approach to mass reduction, where the net mass reduction is the addition of a direct component or system mass reduction, also referred to as primary mass reduction, plus the additional mass reduction taken from indirect ancillary systems and components, also referred to as secondary mass reduction or mass compounding. There are more secondary mass reductions achievable for light-duty vehicles compared to heavy-duty vehicles, which are limited due to the higher towing and payload requirements for these vehicles. 
    Mass reduction can be achieved through a number of approaches, even while maintaining other vehicle functionalities. As summarized by NAS in its 2011 light duty vehicle report, there are two key strategies for primary mass reduction: 1) changing the design to use less material; 2) substituting lighter materials for heavier materials. 
    The first key strategy of using less material compared to the baseline component can be achieved by optimizing the design and structure of vehicle components, systems and vehicle structure. Vehicle manufacturers have long used these continually-improving CAE tools to optimize vehicle designs. For example, the Future Steel Vehicle (FSV) project sponsored by WorldAutoSteel used three levels of optimization: topology optimization, low fidelity 3G (Geometry Grade and Gauge) optimization, and subsystem optimization, to achieve 30 percent mass reduction in the body structure of a vehicle with a mild steel unibody structure. Using less material can also be achieved through improving the manufacturing process, such as by using improved joining technologies and parts consolidation. This method is often used in combination with applying new materials.
    The second key strategy to reduce mass of an assembly or component involves the substitution of lower density and/or higher strength materials. Material substitution includes replacing materials, such as mild steel, with higher-strength and advanced steels, aluminum, magnesium, and composite materials. In practice, material substitution tends to be quite specific to the manufacturer and situation. Some materials work better than others for particular vehicle components, and a manufacturer may invest more heavily in adjusting to a particular type of advanced material, thus complicating its ability to consider others. The agencies recognize that like any type of mass reduction, material substitution has to be conducted not only with consideration to maintaining equivalent component strength, but also to maintaining all the other attributes of that component, system or vehicle, such as crashworthiness, durability, and noise, vibration and harshness (NVH).
    If vehicle mass is reduced sufficiently through application of the two primary strategies of using less material and material substitution described above, secondary mass reduction options may become available. Secondary mass reduction is enabled when the load requirements of a component are reduced as a result of primary mass reduction. If the primary mass reduction reaches a sufficient level, a manufacturer may use a smaller, lighter, and potentially more efficient powertrain while maintaining vehicle acceleration performance. If a powertrain is downsized, a portion of the mass reduction may be attributed to the reduced torque requirement which results from the lower vehicle mass. The lower torque requirement enables a reduction in engine displacement, changes to transmission torque converter and gear ratios, and changes to final drive gear ratio. The reduced powertrain torque enables the downsizing and/or mass reduction of powertrain components and accompanying reduced rotating mass (e.g., for transmission, driveshafts/halfshafts, wheels, and tires) without sacrificing powertrain durability. Likewise, the combined mass reductions of the engine, drivetrain, and body in turn reduce stresses on the suspension components, steering components, wheels, tires, and brakes, which can allow further reductions in the mass of these subsystems. Reducing the unsprung masses such as the brakes, control arms, wheels, and tires further reduce stresses in the suspension mounting points, which will allow for further optimization and potential mass reduction. However, pickup trucks have towing and hauling requirements which must be taken into account when determining the amount of secondary mass reduction that is possible and so it is less than that of passenger cars.
Ford's MY 2015 F-150 is one example of a light duty manufacturer who has begun producing high volume vehicles with a significant amount of mass reduction identified, specifically 250 to 750 lb per vehicle.  The vehicle is an aluminum intensive design and includes an aluminum cab structure, body panels, and suspension components, as well as a high strength steel frame and a smaller, lighter and more efficient engine. The Executive Summary to Ducker Worldwide's 2014 report states that state that the MY 2015 F-150 contains 1080 pounds of aluminum with at least half of this being aluminum sheet and extrusions for body and closures.  Ford engine range for its light duty truck fleet includes a 2.7L EcoBoost V-6.  It is possible that the strategy of aluminum body panels will be applied to the heavy duty F-250 and F-350 versions when they are redesigned.  
The EPA recently completed a multi-year study with FEV North America, Inc. on the lightweighting of a light-duty pickup truck, a 2011 GMC Silverado, titled "Mass Reduction and Cost Analysis  - Light-Duty Pickup Trucks Model Years 2020-2025".  Results contain a cost curve for various mass reduction percentages with the main solution being evaluated for a 21.4 percent (511 kg/1124 lb) mass reduction resulting in an increased direct incremental manufacturing cost of $2228. In addition, the report outlines the compounding effect that occurs in a vehicle with performance requirements including hauling and towing.  Secondary mass evaluation was performed on a component level based on an overall 20 percent vehicle mass reduction.  Results revealed 84 kg of the 511 kg, or 20 percent, were from secondary mass reduction.  Information on this study is summarized in SAE paper 2015-01-0559.  DOT has also sponsored an on-going pickup truck lightweighting project. This project uses a more recent baseline vehicle, a MY 2014 GMC Silverado, and the project will be finished by early 2016.  Both projects will be utilized for the light-duty GHG and CAFE Midterm Evaluation mass reduction baseline characterization and may be used to update assumptions of mass reduction for HD pickups and vans for the final Phase 2 rulemaking.
In order to determine if technologies identified on light duty trucks are applicable to heavy-duty pickups, the EPA also contracted with FEV North America, Inc. to perform a scaling study in order to evaluate the technologies identified for the light-duty truck would be applicable for a heavy-duty pickup truck, in this study a Silverado 2500, a Mercedes Sprinter and a Renault Master.  This report is currently being drafted and will be peer reviewed and finalized between the NPRM and FRM. The specific results will be presented in the final rulemaking and may be used to update assumptions of mass reduction for the FRM. 
The RIA for this rulemaking shows that mass reduction is assumed to be part of the strategy for compliance for HD pickups and vans. The assumptions of mass reduction for HD pickups and vans as used in this analysis were taken from the recent light-duty fuel economy/GHG rulemaking for light-duty pickup trucks, though they may be updated for the FRM based upon the on-going EPA and NHTSA lightweighting studies as well as other information received in the interim. The cost and effectiveness assumptions for mass reduction technology are described in the RIA.
  
Low Rolling Resistance Tires
Tire rolling resistance is the frictional loss associated mainly with the energy dissipated in the deformation of the tires under load and thus influences fuel efficiency and CO2 emissions.  Other tire design characteristics (e.g., materials, construction, and tread design) influence durability, traction (both wet and dry grip), vehicle handling, and ride comfort in addition to rolling resistance.  A typical LRR tire's attributes would include: increased tire inflation pressure, material changes, and tire construction with less hysteresis, geometry changes (e.g., reduced aspect ratios), and reduction in sidewall and tread deflection.  These changes would generally be accompanied with additional changes to suspension tuning and/or suspension design.

Aerodynamic Drag Reduction
Many factors affect a vehicle's aerodynamic drag and the resulting power required to move it through the air.  While these factors change with air density and the square and cube of vehicle speed, respectively, the overall drag effect is determined by the product of its frontal area and drag coefficient, Cd.  Reductions in these quantities can therefore reduce fuel consumption and CO2 emissions.  Although frontal areas tend to be relatively similar within a vehicle class (mostly due to market-competitive size requirements), significant variations in drag coefficient can be observed.  Significant changes to a vehicle's aerodynamic performance may need to be implemented during a redesign (e.g., changes in vehicle shape).  However, shorter-term aerodynamic reductions, with a somewhat lower effectiveness, may be achieved through the use of revised exterior components (typically at a model refresh in mid-cycle) and add-on devices that currently being applied.  The latter list would include revised front and rear fascias, modified front air dams and rear valances, addition of rear deck lips and underbody panels, and lower aerodynamic drag exterior mirrors.
What Are the Projected Technology Effectiveness Values and Costs
The assessment of the technology effectiveness and costs was determined from a combination of sources.  First an assessment was performed by SwRI under contract with the agencies to determine the effectiveness and costs on several technologies that were generally not considered in the Phase 1 GHG rule time frame.  Some of the technologies were common with the light-duty assessment but the effectiveness and costs of individual technologies were appropriately adjusted to match the expected effectiveness and costs when implemented in a heavy-duty application.  Finally, the agencies performed extensive outreach to suppliers of engine, transmission and vehicle technologies applicable to heavy-duty applications to get industry input on cost and effectiveness of potential GHG and fuel consumption reducing technologies.
To achieve the levels of the proposed standards for gasoline and diesel powered heavy-duty vehicles, a combination of the technologies previously discussed would be required respective to unique gasoline and diesel technologies and their challenges.  Although some of the technologies may already be implemented in a portion of heavy-duty vehicles, none of the technologies discussed are considered ubiquitous in the heavy-duty fleet.  Also, as would be expected, the available test data show that some vehicle models would not need the full complement of available technologies to achieve the proposed standards.  Furthermore, many technologies can be further improved (e.g., aerodynamic improvements) from today's best levels, and so allow for compliance without needing to apply a technology that a manufacturer might deem less desirable. 
Technology costs for HD pickups and vans are shown in Table VI-4.  These costs reflect direct and indirect costs to the vehicle manufacturer for the 2021 model year.  See Chapter 2 of the Draft RIA for a more complete description of the basis of these costs.
Table VI-4 Technology Costs for HD Pickups & Vans Inclusive of Indirect Cost Markups for MY2021 (2012$)
Technology
                                   Gasoline
                                    Diesel
Engine changes to accommodate low friction lubes
                                                                             $6
                                                                             $6
Engine friction reduction  -  level 1
                                                                           $116
                                                                           $116
Engine friction reduction  -  level 2
                                                                           $254
                                                                           $254
Dual cam phasing
                                                                           $183
                                                                           $183
Cylinder deactivation
                                                                           $196
                                                                            N/A
Stoichiometric gasoline direct injection
                                                                           $451
                                                                            N/A
Turbo improvements
                                                                            N/A
                                                                            $16
Cooled EGR
                                                                           $373
                                                                           $373
Turbocharging & downsizing[a]
                                                                           $671
                                                                            N/A
"Right-sized" diesel from larger diesel
                                                                            N/A
                                                                             $0
8s automatic transmission (increment to 6s automatic transmission)
                                                                           $457
                                                                           $457
Improved accessories  -  level 1
                                                                            $82
                                                                            $82
Improved accessories  -  level 2
                                                                           $132
                                                                           $132
Low rolling resistance tires  -  level 1
                                                                            $10
                                                                            $10
Passive aerodynamic improvements (aero 1)
                                                                            $51
                                                                            $51
Passive plus Active aerodynamic improvements (aero2)
                                                                           $230
                                                                           $230
Electric (or electro/hydraulic) power steering
                                                                           $151
                                                                           $151
Mass reduction (10% on a 6500 lb vehicle)
                                                                           $318
                                                                           $318
Driveline friction reduction
                                                                           $139
                                                                           $139
Stop-start (no regenerative braking)
                                                                           $539
                                                                           $539
Mild HEV
                                                                          $2730
                                                                          $2730
Strong HEV without inclusion of any engine changes
                                                                          $6779
                                                                          $6779
   [a] Cost to downsize from a V8 OHC to a V6 OHC engine with twin turbos.


	As noted above, the CAFE model works by adding technologies in an incremental fashion to each particular vehicle in a manufacturer's fleet until that fleet complies with the imposed standards. It does this by following a predefined set of decision trees whereby the particular vehicle is placed on the appropriate decision tree and it follows the predefined progression of technology available on that tree.  At each step along the tree, a decision is made regarding the cost of a given technology relative to what already exists on the vehicle along with the fuel consumption improvement it provides relative to the fuel consumption at the current location on the tree, prior to deciding whether to take that next step on the tree or remain in the current location.  Because the model works in this way, the input files must be structured to provide costs and effectiveness values for each technology relative to whatever technologies have been added in earlier steps along the tree.  Table VI-5 presents the cost and effectiveness values used in the CAFE model input files.



Table VI-5 CAFE Model Input Values for Cost & Effectiveness for Given Technologies[a]

                                  Technology
                                  FC Savings
                         Incremental Cost (2012$)[a,b]


                                     2021
                                     2025
                                     2027
Improved Lubricants and Engine Friction Reduction
                                     1.60%
                                      24
                                      24
                                      23
Coupled Cam Phasing (SOHC)
                                     3.82%
                                      48
                                      43
                                      39
Dual Variable Valve Lift (SOHC)
                                     2.47%
                                      42
                                      37
                                      34
Cylinder Deactivation (SOHC)
                                     3.70%
                                      34
                                      30
                                      27
Intake Cam Phasing (DOHC)
                                     0.00%
                                      48
                                      43
                                      39
Dual Cam Phasing (DOHC)
                                     3.82%
                                      46
                                      40
                                      37
Dual Variable Valve Lift (DOHC)
                                     2.47%
                                      42
                                      37
                                      34
Cylinder Deactivation (DOHC)
                                     3.70%
                                      34
                                      30
                                      27
Stoichiometric Gasoline Direct Injection (OHC)
                                     0.50%
                                      71
                                      61
                                      56
Cylinder Deactivation (OHV)
                                     3.90%
                                      216
                                      188
                                      172
Variable Valve Actuation (OHV)
                                     6.10%
                                      54
                                      47
                                      43
Stoichiometric Gasoline Direct Injection (OHV)
                                     0.50%
                                      71
                                      61
                                      56
Engine Turbocharging and Downsizing
                                       
                                       
                                       
                                       
     Small Gasoline Engines
                                     8.00%
                                      518
                                      441
                                      407
     Medium Gasoline Engines
                                     8.00%
                                      -12
                                      -62
                                      -44
     Large Gasoline Engines
                                     8.00%
                                      623
                                      522
                                      456
Cooled Exhaust Gas Recirculation
                                     3.04%
                                      382
                                      332
                                      303
Cylinder Deactivation on Turbo/downsized Eng.
                                     1.70%
                                      33
                                      29
                                      26
Lean-Burn Gasoline Direct Injection
                                     4.30%
                                     1,758
                                     1,485
                                     1,282
Improved Diesel Engine Turbocharging
                                     2.51%
                                      22
                                      19
                                      18
Engine Friction & Parasitic Reduction
                                       
                                       
                                       
                                       
     Small Diesel Engines
                                     3.50%
                                      269
                                      253
                                      213
     Medium Diesel Engines
                                     3.50%
                                      345
                                      325
                                      273
     Large Diesel Engines
                                     3.50%
                                      421
                                      397
                                      334
Downsizing of Diesel Engines (V6 to I-4)
                                    11.10%
                                       0
                                       0
                                       0
8-Speed Automatic Transmission[c]
                                     5.00%
                                      482
                                      419
                                      382
Electric Power Steering
                                     1.00%
                                      160
                                      144
                                      130
Improved Accessories (Level 1)
                                     0.93%
                                      93
                                      83
                                      75
Improved Accessories (Level 2)
                                     0.93%
                                      57
                                      54
                                      46
Stop-Start System
                                     1.10%
                                      612
                                      517
                                      446
Integrated Starter-Generator
                                     3.20%
                                     1,040
                                      969
                                      760
Strong Hybrid Electric Vehicle
                                    17.20%
                                     3,038
                                     2,393
                                     2,133
Mass Reduction (5%)
                                     1.50%
                                     0.28
                                     0.24
                                     0.21
Mass Reduction (additional 5%)
                                     1.50%
                                     0.87
                                     0.75
                                     0.66
Reduced Rolling Resistance Tires
                                     1.10%
                                      10
                                       9
                                       9
Low-Drag Brakes
                                     0.40%
                                      106
                                      102
                                      102
Driveline Friction Reduction
                                     0.50%
                                      153
                                      137
                                      124
Aerodynamic Improvements (10%)
                                     0.70%
                                      58
                                      52
                                      47
Aerodynamic Improvements (add'l 10%)
                                     0.70%
                                      193
                                      182
                                      153
a Values for other model years available in CAFE model input files available at NHTSA web site.
b For mass reduction, cost reported on mass basis (per pound of curb weight reduction).
[c] 8 speed automatic transmission costs include costs for high efficiency gearbox and aggressive shift logic whereas those costs were kept separate in prior analyses.
Summary of Alternatives Analysis
The major outputs of the CAFE model analysis are summarized in Table VI-6 and Table VI-7 below for the flat and dynamic baselines, respectively. For a more detailed analysis of the alternatives, please refer to Section D below as well as the draft RIA.
Table VI-6 Summary of HD Pickup and Van Alternatives' Analysis  -  Method A using the Flat Baseline
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Standard Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase through MY
                                     2025
                                     2027
                                     2025
                                     2025
Total Stringency Increase
                                     9.6%
                                     16.2%
                                     16.3%
                                     18.5%
--------------------------------------------------------------------------------
Average Fuel Economy (miles per gallon)
--------------------------------------------------------------------------------
Required
                                     19.05
                                     20.58
                                     20.58
                                     21.14
Achieved
                                     19.12
                                     20.58
                                     20.83
                                     21.32
--------------------------------------------------------------------------------
Average Fuel Consumption (gallons /100 mi.)
--------------------------------------------------------------------------------
Required
                                     5.25
                                     4.86
                                     4.86
                                     4.73
Achieved
                                     5.23
                                     4.86
                                     4.80
                                     4.69
                    Average Greenhouse Gas Emissions (g/mi)
Required
                                      495
                                      458
                                      458
                                      446
Achieved
                                      493
                                      458
                                      453
                                      442
                  Incremental Technology Cost (vs. No-Action)
Average ($/vehicle) [a]
                                      700
                                     1,324
                                     1,804
                                     2,135
Payback period (m) b
                                      24
                                      26
                                      34
                                      36
Total ($m)
                                      529
                                     1,001
                                     1,363
                                     1,614
             Benefit-Cost Summary, MYs 2021 - 2030 ($billion) [b]
Fuel Savings (bil. gall.)
                                      6.1
                                     10.1
                                     11.9
                                     13.3
CO2 Reduction (mmt)
                                      73
                                      118
                                      139
                                      155
Total Social Cost
                                      3.3
                                      5.6
                                      8.7
                                     10.2
Total Social Benefit
                                     18.4
                                     29.0
                                     34.4
                                     37.9
Net Social Benefit
                                     15.1
                                     23.4
                                     25.7
                                     27.7
         [a] Values also used in Method B
         [b] at a 3% discount rate.
         
Table VI-7 Summary of HD Pickup and Van Alternatives' Analysis  -  Method A using the Dynamic Baseline
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Standard Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase through MY
                                     2025
                                     2027
                                     2025
                                     2025
Total Stringency Increase
                                     9.6%
                                     16.2%
                                     16.3%
                                     18.5%
--------------------------------------------------------------------------------
Average Fuel Economy (miles per gallon)
--------------------------------------------------------------------------------
Required
                                     19.04
                                     20.57
                                     20.57
                                     21.14
Achieved
                                     19.14
                                     20.61
                                     20.83
                                     21.27
--------------------------------------------------------------------------------
Average Fuel Consumption (gallons /100 mi.)
--------------------------------------------------------------------------------
Required
                                     5.25
                                     4.86
                                     4.86
                                     4.73
Achieved
                                     5.22
                                     4.85
                                     4.80
                                     4.70
                    Average Greenhouse Gas Emissions (g/mi)
Required
                                      495
                                      458
                                      458
                                      446
Achieved
                                      491
                                      458
                                      453
                                      444
                  Incremental Technology Cost (vs. No-Action)
Average ($/vehicle) [a]
                                      578
                                     1,348
                                     1,655
                                     2,080
Payback period (m) b
                                      25
                                      31
                                      34
                                      38
Total ($m)
                                      437
                                     1,019
                                     1,251
                                     1,572
             Benefit-Cost Summary, MYs 2021 - 2030 ($billion) [b]
Fuel Savings (bil. gall.)
                                      5.0
                                      8.9
                                     10.5
                                     11.9
CO2 Reduction (mmt)
                                      59
                                      104
                                      122
                                      139
Total Social Cost
                                      3.3
                                      6.8
                                      9.5
                                     13.0
Total Social Benefit
                                     14.3
                                     23.6
                                     28.2
                                     32.8
Net Social Benefit
                                     11.0
                                     16.8
                                     18.7
                                     19.8
         [a] Values also used in Method B
         [b] at a 3% discount rate.
    In general, the proposed standards are projected to cause manufacturers to produce HD pickups and vans that are lighter, more aerodynamic, and more technologically complex across all the alternatives, while social benefits continue to increase across all alternatives.  As  shown, there is a major difference between the relatively small improvements in required fuel consumption and average incremental technology cost between the alternatives, suggesting that the challenge of improving fuel consumption and CO2 emissions accelerates as stringency increases (i.e., that there may be a "knee" in the dependence of the challenge and on the stringency).  Despite the fact that the required average fuel consumption level only changes by 3 percent between Alternative 4 and Alternative 5, average technology cost increases by more than 25 percent.
    
    	Note further that the difference in estimated costs, effectiveness, degree of technology penetration required, and overall benefits do not vary significantly under either the flat or dynamic baseline assumptions.  The agencies view these results as corroborative of the basic reasonableness of the approach proposed.

Consistency of the Proposed Standards with the Agencies' Respective Legal Authorities 
Based on the information currently before the agencies, we believe that Alternative 3 would be maximum feasible and appropriate for this segment for the model years in question, and reflect a reasonable balancing of the statutory factors of technology effectiveness, feasibility, cost, lead time, and safety for purposes of CAA sections 202 (a)(1) and (2). The agencies have projected a compliance path for the proposed standards showing aggressive implementation of technologies that the agencies consider to be available in the time frame of this rule.  Under this approach, manufacturers are expected to implement these technologies at aggressive adoption rates on essentially all vehicles across this sector by 2027 model year.  In the case of several of these technologies, adoption rates are projected to approach 100 percent.  This includes a combination of engine, transmission and vehicle technologies as described in this section across every vehicle. The proposal also is premised on less aggressive penetration of particular advanced technologies, including strong hybrid electric vehicles.
     We project the proposed standards to be achievable within known design cycles, and we believe these standards would allow different paths to compliance in addition to the one we outline and cost here.  As discussed below and throughout this analysis, our proposal places a higher value on maintaining functionality and capability of vehicles designed for work (versus light-duty), and on the assurance of in use reliability and market acceptance of new technology, particularly in initial model years of the program.  Nevertheless, it may be possible to have additional adoption rates of the technologies than we project so that further reductions could be available at reasonable cost and cost-effectiveness.  
     Alternative 4 is also discussed in detail below because the agencies believe it has the potential to be the maximum feasible alternative, and otherwise appropriate. The agencies could decide to adopt Alternative 4, in whole or in part, in the final rule.  In particular, the agencies believe Alternative 4, which would achieve the same stringency as the proposed standards with two years less lead time, merits serious consideration. However, the agencies are uncertain whether the projected technologies and market penetration rates that could be necessary to meet the stringencies would be practicable within the lead time provided in Alternative 4. The proposed standards are generally designed to achieve the levels of fuel consumption and GHG stringency that Alternative 4 would achieve, but with several years of additional lead time, meaning that manufacturers could, in theory, apply new technology at a more gradual pace and with greater flexibility.  The agencies seek comment on these alternatives, including their corresponding lead times.  
     Alternative 4 is based on a year-over-year increase in stringency of 3.5 percent in MYs 2021-2025 whereas the proposed preferred Alternative 3 is based on a 2.5 percent year-over-year increase in stringency in MY 2021-2027.  The agencies project that the higher rate of increase in stringency associated with Alternative 4 and the shorter lead time would necessitate the use of a different technology mix under Alternative 4 compared to Alternative 3.  Alternative 3 would achieve the same final stringency increase as Alternative 4 at about 80 percent of the average per-vehicle cost increase, and without the expected deployment of more advanced technology at high penetration levels. In particular, under the agencies' primary analysis that includes the use of strong hybrids manufacturers are estimated to deploy strong hybrids in approximately 8 percent of new vehicles (in MY2027) under Alternative 3, compared to 12 percent under Alternative 4 (in MY 2025). Less aggressive electrification technologies also appear on 33 percent of new vehicles simulated to be produced in MY2027 under Alternative 4, but are not necessary under Alternative 3.   Additionally, it is important to note that due to the shorter lead time of Alternative 4, there are fewer vehicle refreshes and redesigns during the phase-in period of MY 2021-2025.  While the CAFE model's algorithm accounts for manufacturers' consideration of upcoming stringency changes and credit carry-forward, the steeper ramp-up of the standard in Alternative 4, coupled with the five-year credit life, results in a prediction that manufacturers would take less cost-effective means to comply with the standards compared with the proposed alternative 3 phase-in period of MY 2021-2027.  For example, the model predicts that some manufacturers would not implement any amount of  strong hybrids on their vans during the 2021-2025 timeframe and instead would implement less effective technologies such as mild hybrids at higher rates than what would otherwise have been required if they had implemented a small percentage of strong hybrids. Whereas for Alternative 3, the longer, shallower phase-in of the standards allows for more compliance flexibility and closer matching with the vehicle redesign cycles, which (as noted above) can be up to ten years for HD vans.
There is also a high degree of sensitivity to the estimated effectiveness levels of individual technologies.  At high penetration rates of all technologies on a vehicle, the result of a reduced effectiveness of even a single technology could be non-compliance with the standards.  If the standards do not account for this uncertainty, there would be a real possibility that a manufacturer who followed the exact technology path we project would not meet their target because a technology performed slightly differently in their application.  NHTSA has explored this uncertainty, among others, in the uncertainty analysis described in Section D below.
As discussed above, the proposed Alternative 3 standards and the Alternative 4 standards are based on the application of the technologies described in this section.  These technologies are projected to be available within the lead time provided under Alternative 3  -  i.e., by MY 2027, as discussed in Draft RIA Chapter 2.6.  The proposed standards and Alternative 4 would require an aggressive implementation schedule of most of these technologies during the program phase-in. Heavy-duty pickups and vans would need to have a combination of many individual technologies to achieve the proposed standards.  The proposed standards are projected to yield significant emission and fuel consumption reductions without requiring a large segment transition to strong hybrids, a technology that while successful in light-duty passenger cars, cross-over vehicles and SUVs, may impact vehicle work capabilities and have questionable customer acceptance in a large portion of this segment dedicated to towing.
Table VI-8 below shows that the agencies' analysis estimates that the most cost-effective way to meet the requirements of Alternative 3 would be to use strong hybrids in up to 9.9 percent of pickups and 5.5 percent of vans on an industry-wide basis whereas Alternative 4 shows strong hybrids on up to 19 percent of pickups.  The analysis shows that the two years of additional lead time provided by the proposed Alternative 3 would provide manufacturers with a better opportunity to maximize the use of more cost effective technologies over time thereby reducing the need for strong hybrids which may be particularly challenging for this market segment.  The agencies seek comment on the potential use of technologies in response to Alternatives 3 and 4, as well as the corresponding lead times proposed in each alternative.   
Table VI-8 CAFE Model Technology Adoption Rates for Proposal and Alternative 4 Summary  -  Flat Baseline
                                       
                           Proposal (2.5% per year)
                                 2021 to 2027
                         Alternative 4 (3.5% per year)
                                 2021 to 2025
                                  Technology
                                 Pickup Trucks
                                     Vans
                                 Pickup Trucks
                                     Vans
                            Low friction lubricants
                                     100%
                                     100%
                                     100%
                                     100%
                           Engine friction reduction
                                     100%
                                     100%
                                     100%
                                     100%
                             Cylinder deactivation
                                      22%
                                      19%
                                      22%
                                      19%
                             Variable valve timing
                                      22%
                                      82%
                                      22%
                                      82%
                           Gasoline direct injection
                                      0%
                                      63%
                                      0%
                                      80%
                          Diesel engine improvements
                                      60%
                                     3.6%
                                      60%
                                     3.6%
                            Turbo downsized engine 
                                      0%
                                      63%
                                      0%
                                      63%
                             8 speed transmission
                                      98%
                                      92%
                                      98%
                                      92%
                         Low rolling resistance tires
                                     100%
                                      92%
                                     100%
                                      59%
                          Aerodynamic drag reduction
                                     100%
                                     100%
                                     100%
                                     100%
                         Mass reduction and materials
                                     100%
                                     100%
                                     100%
                                     100%
                            Electric power steering
                                     100%
                                      49%
                                     100%
                                      46%
                             Improved accessories
                                     100%
                                      87%
                                     100%
                                      36%
                                Low drag brakes
                                     100%
                                      45%
                                     100%
                                      45%
                           Stop/start engine systems
                                      0%
                                      0%
                                      15%
                                     1.5%
                                  Mild hybrid
                                      0%
                                      0%
                                      29%
                                      15%
                                 Strong hybrid
                                     9.9%
                                     5.5%
                                      19%
                                      0%
As discussed earlier, the agencies also conducted a sensitivity analysis to determine a compliance pathway where no strong hybrids would be selected.  Although the agencies project that strong hybrids may be the most cost effective approach, manufacturers may select another compliance path.  This no strong hybrid analysis included the use of downsized turbocharged engine in vans currently equipped with large V-8 engines.  Turbo-downsized engines were not allowed on 6+ liter gasoline vans in the primary analysis because the agencies sought to preserve consumer choice with respect to vans that have large V-8s for towing.  However, given the recent introduction of vans with considerable towing capacity and turbo-downsized engines, the agencies believe it would be feasible for vans in the time-frame of this proposed rule.  Table VI-9 below reflects the difference in penetration rates of technologies for the proposal and Alternative 4 if strong hybridization is not chosen as a technology pathway.  For simplicity, pickup trucks and vans are combined into a single industry wide penetration rate.  While strong hybridization may provide the most cost effective path for a manufacturer to comply with the Proposal or Alternative 4, there are other means to comply with the requirements, mainly a 20 percent penetration rate of mild hybrids for the Proposal or a 66 percent penetration of mild hybrids for Alternative 4.  The modeling of both alternatives predicts a 1 to 4 percent penetration of stop/start engine systems.   
The table also shows that when strong hybrids are used as a pathway to compliance, penetration rates of all hybrid technologies increase substantially between the proposal and Alternative 4.  The analysis predicts an increase in strong hybrid penetration from 8 percent to 12 percent, a 23 percent penetration of mild hybrids and a 10 percent penetration stop/start engine systems for Alternative 4 compared with the proposal.  Also, by having the final standards apply in MY2027 instead of MY2025, the proposal is not premised on use of any mild hybrids or stop/start engine systems to achieve the same level of stringency as Alternative 4.    
Table VI-9 CAFE Model Technology Adoption Rates for Proposal and Alternative 4 Combined Fleet and Fuels Summary -  Flat Baseline
                                       
                           Proposal (2.5% per year)
                                 2021 to 2027
                         Alternative 4 (3.5% per year)
                                 2021 to 2025
                                  Technology
                              With strong hybrids
                                       
                            Without strong hybrids
                              With strong hybrids
                                       
                            Without strong hybrids
                            Low friction lubricants
                                     100%
                                     100%
                                     100%
                                     100%
                           Engine friction reduction
                                     100%
                                     100%
                                     100%
                                     100%
                             Cylinder deactivation
                                      21%
                                      22%
                                      21%
                                      14%
                             Variable valve timing
                                      46%
                                      46%
                                      46%
                                      46%
                           Gasoline direct injection
                                      25%
                                      45%
                                      31%
                                      45%
                          Diesel engine improvements
                                      38%
                                      38%
                                      38%
                                     38 %
                           Turbo downsized engine a
                                      25%
                                      31%
                                      25%
                                      31%
                             8 speed transmission
                                      96%
                                      96%
                                      96%
                                      96%
                         Low rolling resistance tires
                                      97%
                                      97%
                                      84%
                                      84%
                          Aerodynamic drag reduction
                                     100%
                                     100%
                                     100%
                                     100%
                         Mass reduction and materials
                                     100%
                                     100%
                                     100%
                                     100%
                            Electric power steering
                                      80%
                                      92%
                                      79%
                                      79%
                             Improved accessories
                                      67%
                                      77%
                                      75%
                                      75%
                                Low drag brakes
                                      78%
                                      93%
                                      78%
                                      78%
                           Stop/start engine systems
                                      0%
                                      1 %
                                      10%
                                      4%
                                  Mild hybrid
                                      0%
                                      20%
                                      23%
                                      66%
                                 Strong hybrid
                                      8%
                                      0%
                                      12%
                                      0%
[a] The 6+ liter V8 vans were allowed to convert to turbocharged and downsized engines in the "without strong hybrid" analysis for both the Proposal and the Alternative 4 to provide a compliance path.
Table VI-10 and Table VI-11 below provide a further breakdown of projected technology adoption rates specifically for gasoline-fueled pickups and vans which shows potential adoption rates of strong hybrids for each vehicle type.  Strong hybrids are not projected to be used in diesel applications.  The Alternative 4 analysis shows the use of strong hybrids in up to 48 percent of gasoline pickups, depending on the mix of strong and mild hybrids, and stop/start engine systems in 20 percent of gasoline pickups (the largest gasoline HD segment). It is important to note that this analysis only shows one pathway to compliance, and the manufacturers may make other decisions, e.g., changing the mix of strong vs. mild hybrids, or applying electrification technologies to HD vans instead.  The technology adoption rates projected for gasoline pickups and gasoline vans due to the proposed Alternative 3 and Alternative 4 are shown in Table VI-10 and Table VI-11, respectively.  
Table VI-10 CAFE Model Technology Adoption Rates for Proposal and Alternative 4 on Gasoline Pickup Trucks  -  Flat Baseline
                                       
                           Proposal (2.5% per year)
                                 2021 to 2027
                         Alternative 4 (3.5% per year)
                                 2021 to 2025
                                  Technology
                              With strong hybrids
                            Without strong hybrids
                              With strong hybrids
                            Without strong hybrids
                            Low friction lubricants
                                     100%
                                     100%
                                     100%
                                     100%
                           Engine friction reduction
                                     100%
                                     100%
                                     100%
                                     100%
                             Cylinder deactivation
                                      56%
                                      56%
                                      56%
                                      56%
                             Variable valve timing
                                      56%
                                      56%
                                      56%
                                      56%
                           Gasoline direct injection
                                      0%
                                      56%
                                      0%
                                      56%
                             8 speed transmission
                                     100%
                                     100%
                                     100%
                                     100%
                         Low rolling resistance tires
                                     100%
                                     100%
                                     100%
                                     100%
                          Aerodynamic drag reduction
                                     100%
                                     100%
                                     100%
                                     100%
                         Mass reduction and materials
                                     100%
                                     100%
                                     100%
                                     100%
                            Electric power steering
                                     100%
                                     100%
                                     100%
                                     100%
                             Improved accessories
                                     100%
                                     100%
                                     100%
                                     100%
                                Low drag brakes
                                     100%
                                     100%
                                     100%
                                     100%
                         Driveline friction reduction
                                      44%
                                      68%
                                      68%
                                      68%
                           Stop/start engine systems
                                      0%
                                      0%
                                      20%
                                      0%
                                  Mild hybrid
                                  Up to 42% a
                                      0%
                                  18 - 86% a
                                      86%
                                 Strong hybrid
                                   Up to 25%
                                       -
                                   Up to 48%
                                       -
[a] Depending on extent of strong hybrid adoption as hybrid technologies can replace each other, however they will have different effectiveness and costs.
Table VI-11 CAFE Model Technology Adoption Rates for Proposal and Alternative 4 on Gasoline Vans  -  Flat Baseline
                                       
                           Proposal (2.5% per year)
                                 2021 to 2027
                         Alternative 4 (3.5% per year)
                                 2021 to 2025
                                  Technology
                              With strong hybrids
                            Without strong hybrids
                              With strong hybrids
                            Without strong hybrids
                            Low friction lubricants
                                     100%
                                     100%
                                     100%
                                     100%
                           Engine friction reduction
                                     100%
                                     100%
                                     100%
                                     100%
                             Cylinder deactivation
                                      23%
                                      3%
                                      23%
                                      3%
                             Variable valve timing
                                     100%
                                     100%
                                     100%
                                     100%
                           Gasoline direct injection
                                      57%
                                      97%
                                      97%
                                      97%
                           Turbo downsized engine a
                                      77%
                                      97%
                                      77%
                                      97%
                             8 speed transmission
                                      97%
                                      97%
                                      97%
                                      97%
                         Low rolling resistance tires
                                     100%
                                     100%
                                      60%
                                      60%
                          Aerodynamic drag reduction
                                     100%
                                     100%
                                     100%
                                     100%
                         Mass reduction and materials
                                     100%
                                     100%
                                     100%
                                     100%
                            Electric power steering
                                      55%
                                      85%
                                      53%
                                      53%
                             Improved accessories
                                      23%
                                      38%
                                      43%
                                      43%
                                Low drag brakes
                                      53%
                                      89%
                                      53%
                                     100%
                           Stop/start engine systems
                                      0%
                                      0%
                                      2%
                                      0%
                                  Mild hybrid
                                 Up to 13%[b]
                                      13%
                                      18%
                                      40%
                                 Strong hybrid
                                   Up to 7%
                                       -
                                      0%
                                       -
[a] The 6+ liter V8 vans were allowed to convert to turbocharged and downsized engines in the "without strong hybrid" analysis for both the Proposal and the Alternative 4 to provide a compliance path.
b Depending on extent of strong hybrid adoption as hybrid technologies can replace each other, however they will have different effectiveness and costs.
The tables above show that many technologies would be at or potentially approach 100 percent adoption rates according to the analysis.  If certain technologies turn out to be not well suited for certain vehicle models or less effective that projected, other technology pathways would be needed.  The additional lead time provided by the proposed Alternative 3 reduces these concerns because manufacturers would have more flexibility to implement their compliance strategy and are more likely to contain a product redesign cycle necessary for many new technologies to be implemented.    
GM may have a particular challenge meeting new standards compared to other manufacturers because their production consists of a larger portion of gasoline-powered vehicles and because they continue to offer a traditional style HD van equipped only with a V-8 engine.  Under the strong hybrid analysis for Alternative 3, GM is projected to apply strong hybrids to 46 percent of their HD gasoline pickups and 17 percent their HD gasoline vans.  Under Alternative 4, GM is projected to apply a combination of 53 percent strong and 43 percent mild hybrids to their HD gasoline pickups and 44 percent mild hybrids to their HD vans.  The no strong hybrid analysis shows that GM could comply without strong hybrids based on the use of turbo downsizing on all of their HD gasoline vans to fully comply with either Alternative 3 or Alternative 4.  As modeled, Alternative 4 would also require GM to additionally utilize several other technologies such as higher penetration of mild hybridization.  If GM were to choose to maintain a V-8 version of their current HD van and not fully utilize turbo downsizing, another compliance path such as some use of strong hybrids would be needed.  This would also be the case if GM chose not to fully utilize some other technologies under Alterative 4 as well.
In addition to the possibility of an increased level of hybridization, the agencies are also requesting comment on other possible outcomes associated especially with Alternative 4; in particular, the possibility of traditional van designs or other products being discontinued.  Several manufacturers now offer or are moving to European style HD vans.  Ford, for example, has discontinued its E-series body on frame HD van and has replaced it with the unibody Transit van for MY 2015. While other manufacturers have replaced their traditional style vans with new European style van designs, GM continues to offer the traditional full frame style van with eight cylinder gasoline engines for higher towing capability (up to 16,000 lb GCWR).  Typically, the European style vans are equipped with smaller engines offering better fuel consumption and lower CO2 emissions but with reduced towing capability, similar to light-duty trucks (though Ford offers a Transit van with a GCWR of 15,000 lb).  
The agencies request comment on the potential for Alternative 4 in particular to incentivize GM to discontinue its current traditional style van and replace it with an as yet to be designed European style van similar to its competitor's products.  See Bluewater Network v. EPA, 370 F. 3d 1, 22 (D.C. Cir. 2004) (standard implementing technology-forcing provision of CAA remanded to EPA for an explanation of why the standard was not based on discontinuation of a particular model); International Harvester v. Ruckelshaus, 478 F. 2d 615, 640-41 (D.C. Cir. 1973) ("We are inclined to agree with the Administrator that as long as feasible technology permits the demand for new passenger automobiles to be generally met, the basic requirements of the Act would be satisfied, even though this might occasion fewer models and a more limited choice of engine types").  Such an outcome could limit consumer choice both on the style of van available in the marketplace and on the range of capabilities of the vehicles available.  The agencies have not attempted to cost out this possible compliance path.  The agencies request comments on the likelihood of this type of redesign as a possible outcome of Alternative 3 and Alternative 4, and whether it would be appropriate.  We are especially interested in comments on the potential impact on consumer choice and the costs associated with this type of wholesale vehicle model replacement.
In addition, another potential outcome of Alternative 4 would be that manufacturers could change the product utility.  For example, although GM's traditional van discussed above currently offers similar towing capacity as gasoline pick-ups, GM could choose to replace engines designed for those towing capacities with small gas or diesel engines.  The agencies request comment on the potential for Alternative 4 to lead to this type of compliance approach.
The agencies also request comment on the possibility that Alternative 4 could lead to increased dieselization of the HD pickup and van fleet.  Dieselization is not a technology path the agencies included in the analysis for the Phase 1 rule or the Phase 2 proposal but it is something the agencies could consider as a technology path under Alternative 4.  As discussed earlier, diesel engines are fundamentally more efficient than gasoline engines providing the same power (even gasoline engines with the technologies discussed above).  Alternative 4 could result in manufacturers switching from gasoline engines to diesel engines in certain challenging segments.  However, while technologically feasible, this pathway could cause a distortion in consumer choices and significantly increase the cost of those vehicles, particularly considering Alternative 4 is projected to require penetration of some form of hybridization.  Also, if dieselization occurs by manufacturers equipping vehicles with larger diesel engines rather than "right-sized" engines, the towing capability of the vehicles could increase resulting in higher work factors for the vehicles, higher targets, and reduced program benefits.  The issue of surplus towing capability is also discussed above in VI.B. (1).    
The technologies associated with meeting the proposed standards are estimated to add costs to heavy-duty pickups and vans as shown in Table VI-12 and Table VI-13 for the flat baseline and dynamic baseline, respectively.  These costs are the average fleet-wide incremental vehicle costs relative to a vehicle meeting the MY2018 standard in each of the model years shown.  Reductions associated with these costs and technologies are considerable, estimated at a 13.6 percent reduction of fuel consumption and CO2eq emissions from the MY 2018 baseline for gasoline and diesel engine equipped vehicles.  A detailed cost and cost effectiveness analysis for both the proposed preferred Alternative 3 are provided in Section IX and Chapter 7.1 of the draft RIA.  As shown by the analysis, the long-term cost effectiveness of the proposal is similar to that of the Phase 1 HD pickup and van standards and also falls within the range of the cost effectiveness for Phase 2 standards proposed for the other HD sectors.   The cost of controls would be fully recovered by the operator due to the associated fuel savings, with a payback period somewhere in the third year of ownership, as shown in Section IX.L of this preamble.   Consistent with the agencies' respective statutory authorities under CAA Section 202 (a) and 49 U.S.C. 32902(k)(2)., and based on the agencies' analysis, EPA and NHTSA are proposing Alternative 3.  The agencies seek comment on Alternative 4, as we may seek to adopt it in whole or in part in the final rule.  
We also show the costs for the potential Alternative 4 standards in Table VI-14 and Table VI-15. As shown, the costs under Alternative 4 would be significantly higher compared to Alternative 3. 
Table VI-12 HD Pickups and Vans Incremental Technology Costs per Vehicle
Preferred Alternative vs. Flat Baseline (2012$)
                                                                               
                                                                           2021
                                                                           2022
                                                                           2023
                                                                           2024
                                                                           2025
                                                                           2026
                                                                           2027
HD Pickups & Vans
                                                                           $516
                                                                           $508
                                                                           $791
                                                                           $948
                                                                         $1,161
                                                                         $1,224
                                                                         $1,342

Table VI-13 HD Pickups and Vans Incremental Technology Costs per Vehicle
Preferred Alternative vs Dynamic Baseline (2012$)
                                                                               
                                                                           2021
                                                                           2022
                                                                           2023
                                                                           2024
                                                                           2025
                                                                           2026
                                                                           2027
HD Pickups & Vans
                                                                           $493
                                                                           $485
                                                                           $766
                                                                           $896
                                                                         $1,149
                                                                         $1,248
                                                                         $1,366

Table VI-14 HD Pickups and Vans Incremental Technology Costs per Vehicle
Alternative 4 vs. Flat Baseline (2012$)
                                                                               
                                                                           2021
                                                                           2022
                                                                           2023
                                                                           2024
                                                                           2025
                                                                           2026
                                                                           2027
HD Pickups & Vans
                                                                         $1,050
                                                                         $1,033
                                                                         $1,621
                                                                         $1,734
                                                                         $1,825
                                                                         $1,808
                                                                         $1,841

Table VI-15 HD Pickups and Vans Incremental Technology Costs per Vehicle
Alternative 4 vs. Dynamic Baseline (2012$)
                                                                               
                                                                           2021
                                                                           2022
                                                                           2023
                                                                           2024
                                                                           2025
                                                                           2026
                                                                           2027
HD Pickups & Vans
                                                                           $909
                                                                           $894
                                                                         $1,415
                                                                         $1,532
                                                                         $1,627
                                                                         $1,649
                                                                         $1,684

DOT CAFE Model Analysis of the Regulatory Alternatives for HD Pickups and Vans
Considering the establishment of potential HD pickup and van fuel consumption and GHG standards to follow those already in place through model year 2018, the agencies evaluated a range of potential regulatory alternatives.  The agencies estimated the extent to which manufacturers might add fuel-saving and CO2-avoiding technologies under each regulatory alternative, including the no-action alternative described in Section X. of this proposal.  For HD pickups and vans both agencies analyzed two no-action alternatives, where one no-action alternative could be described as a "flat baseline" and the other as a "dynamic baseline".  Please refer to Section X. of this proposal for a complete discussion of the assumptions that underlie these baselines. The agencies then estimated the extent to which additional technology that would be implemented to meet each regulatory alternative would incrementally (compared to the no-action alternative) impact costs to manufacturers and vehicle buyers, physical outcomes such as highway travel, fuel consumption, and greenhouse gas emissions, and economic benefits and costs to vehicle owners and society.  The remainder of this section and portions of Sections VII through X present the regulatory alternatives the agencies have considered, summarize the agencies' analyses, and explain the agencies' selection of the HD pickup and van preferred alternative defined by today's proposed standards.
    The agencies conducted coordinated and complementary analyses by employing both DOT's CAFE model and EPA's MOVES model and other analytical tools to project fuel consumption and GHG emissions impacts resulting from the proposed standards for HD pickups and vans, against both the flat and dynamic baselines.  In addition to running the DOT CAFE model to provide per vehicle cost and technology values, NHTSA also used the model to estimate the full range of impacts for pickups and vans, including fuel consumption and GHG emissions, including downstream vehicular emissions as well as emissions from upstream processes related to fuel production, distribution, and delivery.  The CAFE model applies fuel properties (density and carbon content) to estimated fuel consumption in order to calculate vehicular CO2 emissions, applies per-mile emission factors (in this analysis, from MOVES) to estimated VMT in order to calculate vehicular CH4 and N2O emissions (as well, as discussed below, of non-GHG pollutants), and applies per-gallon upstream emission factors (in this analysis, from GREET) in order to calculate upstream GHG (and non-GHG) emissions. EPA also ran its MOVES model for all HD categories, namely tractors and trailers, vocational vehicles and HD pickups and vans, to develop a consistent set of fuel consumption and CO2 reductions for all HD categories.  The MOVES runs followed largely the procedures described above, with some differences.  MOVES used the same technology application rates and costs that are part of the inputs, and used cost per vehicle outputs of the CAFE model to evaluate the proposed standards for HD pickup trucks and vans. The agencies note that these two independent analyses of aggregate costs and benefits both support the proposed standards.
While both agencies fully analyzed the regulatory alternatives against both baselines, NHTSA considered its primary analysis to be based on the dynamic baseline, where certain cost-effective technologies are assumed to be applied by manufacturers to improve fuel efficiency beyond the Phase 1 requirements in the absence of new Phase 2 standards.  On the other hand, EPA considered both baselines and EPA's less dynamic or flat baseline analysis is presented in Sections VII through X of this proposal as well as the draft Regulatory Impact Analysis accompanying this proposal.  In Section X both the flat and dynamic baseline analyses are presented for all of the regulatory alternatives.  
This section provides a discussion of the CAFE model, followed by the comprehensive results of the CAFE model against the dynamic baseline to show costs, benefits, and environmental impacts of the regulatory alternatives for HD pickups and vans.  This presentation of regulatory analysis is consistent with NHTSA's presentation of similar analyses conducted in support of the agencies joint light-duty vehicle fuel economy and GHG regulations.  The CAFE analysis against the flat baseline as well as EPA's complementary analysis of GHG impacts, non-GHG impacts, and economic and other impacts using MOVES is presented in Sections VII through IX of this proposal, as well as in the draft Regulatory Impact Analysis accompanying this proposal.  These are presented side-by-side with the agencies' joint analyses of the other heavy-duty sectors (i.e., tractors, trailers, vocational vehicles).  The presentation of the EPA analyses of HD pickups and vans in these sections is consistent with the agencies' presentation of similar analyses conducted as part of the agencies' joint HD Phase 1 regulations and with EPA's presentation of similar analyses conducted in support of the agencies' joint light-duty vehicle fuel economy and GHG regulations.  The agencies' intention for presenting both of these complementary and coordinated analyses is to offer interested readers the opportunity to compare the regulatory alternatives considered for Phase 2 in both the context of our Phase 1 analytical approaches and our light-duty vehicle analytical approaches.
Evaluation of Regulatory Alternatives
As discussed in Section C above, the agencies used DOT's CAFE model to conduct an analysis of potential standards for HD pickups and vans.  The basic operation of the CAFE model was described in section VI.C.2, so will not be repeated here. However, this section provides additional detail on the model operation, inputs, assumptions, and outputs.
 DOT developed the CAFE model in 2002 to support the 2003 issuance of CAFE standards for MYs 2005-2007 light trucks.  DOT has since significantly expanded and refined the model, and has applied the model to support every ensuing CAFE rulemaking;
   * 2006:  MYs 2008-2011 light trucks
   * 2008:  MYs 2011-2015 passenger cars and light trucks (final rule prepared but withheld)
   * 2009:  MY 2011 passenger cars and light trucks
   * 2010:  MYs 2012-2016 passenger cars and light trucks (joint rulemaking with EPA)
   * 2012:  MYs 2017-2021 passenger cars and light trucks (joint rulemaking with EPA)
Past analyses conducted using the CAFE model have been subjected to extensive and detailed review and comment, much of which has informed the model's expansion and refinement.  NHTSA's use of the model was considered and supported in Center for Biological Diversity v. National Highway Traffic Safety Admin., 538 F.3d 1172, 1194 (9th Cir. 2008).  For further discussion see 76 FR 57198, and the model has been subjected to formal peer review and review by the General Accounting Office (GAO) and National Research Council (NRC).  NHTSA makes public the model, source code, and -- except insofar as doing so would compromise confidential business information (CBI) manufacturers have provided to NHTSA -- all model inputs and outputs underlying published rulemaking analyses. 
This analysis reflects several changes made to the model since 2012, when NHTSA used the model to estimate the effects, costs, and benefits of final CAFE standards for light-duty vehicles produced during MYs 2017-2021, and augural standards for MYs 2022-2025.  Some of these changes specifically enable analysis of potential fuel consumption standards (and, hence, related CO2 emissions standards harmonized with fuel consumption standards) for heavy-duty pickups and vans; other changes implement more general improvements to the model.  Key changes include the following:
   * Expansion and restructuring of model inputs, compliance calculations, and reporting to accommodate standards for heavy-duty pickups and vans, including attribute-based standards involving targets that vary with "work factor".
   * Explicit calculation of test weight, taking into account test weight "bins" and differences in the definition of test weight for light-duty vehicles (curb weight plus 300 pound) and heavy-duty pickups and vans (average of GVWR and curb weight).
   * Procedures to estimate increases in payload when curb weight is reduced, increases in towing capacity if GVWR is reduced, and calculation procedures to correspondingly update calculated work factors.
   * Expansion of model inputs, procedures, and outputs to accommodate technologies not included in prior analyses.
   * Changes to the algorithm used to apply technologies, enabling more explicit accounting for shared vehicle platforms and adoption and "inheritance" of major engine changes.
   * Expansion of the Monte Carlo simulation procedures used to perform probabilistic uncertainty analysis.
These changes are reflected in updated model documentation available at NHTSA's web site, the documentation also providing more information about the model's purpose, scope, structure, design, inputs, operation, and outputs.  DOT invites comment on the updated model, and in particular, on the updated handling of shared vehicle platforms, engines, and transmissions, and on the new procedures to estimate changes to test weight, GVWR, and GCWR as vehicle curb weight is reduced.
         Product Cadence
Past comments on the CAFE model have stressed the importance of product cadence -- i.e., the development and periodic redesign and freshening of vehicles -- in terms of involving technical, financial, and other practical constraints on applying new technologies, and DOT has steadily made changes to the model with a view toward accounting for these considerations.  For example, early versions of the model added explicit "carrying forward" of applied technologies between model years, subsequent versions applied assumptions that most technologies would be applied when vehicles are freshened or redesigned, and more recent versions applied assumptions that manufacturers would sometimes apply technology earlier than "necessary" in order to facilitate compliance with standards in ensuing model years.  Thus, for example, if a manufacturer is expected to redesign many of its products in model years 2018 and 2023, and the standard's stringency increases significantly in model year 2021, the CAFE model will estimate the potential that the manufacturer will add more technology than necessary for compliance in MY 2018, in order to carry those product changes forward through the next redesign and contribute to compliance with the MY 2021 standard.  
The model also accommodates estimates of overall limits (expressed as "phase-in caps" in model inputs) on the rates at which manufacturers' may practicably add technology to their respective fleets.  So, for example, even if a manufacturer is expected to redesign half of its production in MY 2016, if the manufacturer is not already producing any strong hybrid electric vehicles (SHEVs), a phase-in cap can be specified in order to assume that manufacturer will stop applying SHEVs in MY 2016 once it has done so to at least 3 percent of its production in that model year.
After the light-duty rulemaking analysis accompanying the 2012 final rule regarding post-2016 CAFE standards and related GHG emissions standards, DOT staff began work on CAFE model changes expected to better reflect additional considerations involved with product planning and cadence.  These changes, summarized below, interact with preexisting model characteristics discussed above.
         Platforms and Technology
The term "platform" is used loosely in industry, but generally refers to a common structure shared by a group of vehicle variants.  The degree of commonality varies, with some platform variants exhibiting traditional "badge engineering" where two products are differentiated by little more than insignias, while other platforms be used to produce a broad suite of vehicles that bear little outer resemblance to one another.
Given the degree of commonality between variants of a single platform, manufacturers do not have complete freedom to apply technology to a vehicle: while some technologies (e.g. low rolling resistance tires) are very nearly "bolt-on" technologies, others involve substantial changes to the structure and design of the vehicle, and therefore necessarily are constant between vehicles that share a common platform.  DOT staff has, therefore, modified the CAFE model such that all mass reduction and aero technologies are forced to be constant between variants of a platform.  The agencies request comment on the suitability of this viewpoint, and which technologies can deviate from one platform variant to another.
Within the analysis fleet, each vehicle is associated with a specific platform.  As the CAFE model applies technology, it first defines a platform "leader" as the vehicle variant of a platform with the highest technology utilization vehicle of mass reduction and aerodynamic technologies.  As the vehicle applies technologies, it effectively harmonizes to the highest common denominator of the platform.  If there is a tie, the CAFE model begins applying aerodynamic and mass reduction technology to the vehicle with the lowest average sales across all available model years.  If there remains a tie, the model begins by choosing the vehicle with the highest average MSRP across all available model years.  The model follows this formulation due to previous market trends suggesting that many technologies begin deployment at the high-end, low-volume end of the market as manufacturers build their confidence and capability in a technology, and later expand the technology across more mainstream product lines.
In the HD pickup and van market, there is a relatively small amount of diversity in platforms produced by manufacturers: typically 1-2 truck platforms and 1-2 van platforms.  However, accounting for platforms will take on greater significance in future analyses involving the light-duty fleet, and the agency requests comments on the general use of platforms within CAFE rulemaking.
         Engine and Transmission Inheritance
In practice, manufacturers are limited in the number of engines and transmissions that they produce.  Typically a manufacturer produces a number of engines -- perhaps six or eight engines for a large manufacturer -- and tunes them for slight variants in output for a variety of car and truck applications.  Manufacturers limit complexity in their engine portfolio for much the same reason as they limit complexity in vehicle variants: they face engineering manpower limitations, and supplier, production and service costs that scale with the number of parts produced.
In previous usage of the CAFE model, engines and transmissions in individual models were allowed relative freedom in technology application, potentially leading to solutions that would, if followed, involve unaccounted-for costs associated with increased complexity in the product portfolio.  The lack of a constraint in this area allowed the model to apply different levels of technology to the engine in each vehicle at the time of redesign or refresh, independent of what was done to other vehicles using a previously identical engine.
In the current version of the CAFE model, engines and transmissions that are shared between vehicles must apply the same levels of technology in all technologies dictated by engine or transmission inheritance.  This forced adoption is referred to as "engine inheritance" in the model documentation.
As with platform-shared technologies, the model first chooses an "engine leader" among vehicles sharing the same engine.  The leader is selected first by the vehicle with the lowest average sales across all available model years.  If there is a tie, the vehicle with the highest average MSRP across model years is chosen.  The model applies the same logic with respect to the application of transmission changes.  As with platforms, this is driven by the concept that vehicle manufacturers typically deploy new technologies in small numbers prior to deploying widely across their product lines. 
         Interactions between Regulatory Classes
Like earlier versions, the current CAFE model provides for integrated analysis spanning different regulatory classes, accounting both for standards that apply separately to different classes and for interactions between regulatory classes.  Light vehicle CAFE standards are specified separately for passenger cars and light trucks.  However, there is considerable sharing between these two regulatory classes.  Some specific engines and transmissions are used in both passenger cars and light trucks, and some vehicle platforms span these regulatory classes.  For example, some sport-utility vehicles are offered in 2WD versions classified as passenger cars and 4WD versions classified as light trucks.  Integrated analysis of manufacturers' passenger car and light truck fleets provides the ability to account for such sharing and reduce the likelihood of finding solutions that could involve impractical levels of complexity in manufacturers' product lines.  In addition, integrated analysis provides the ability to simulate the potential that manufactures could earn CAFE credits by over complying with one standard and use those credits toward compliance with the other standard (i.e., to simulate credit transfers between regulatory classes).
HD pickups and vans are regulated separately from light-duty vehicles.  While manufacturers cannot transfer credits between light-duty and MDHD classes, there is some sharing of engineering and technology between light-duty vehicles and HD pickups and vans.  For example, some passenger vans with GVWR over 8,500 pounds are classified as medium-duty passenger vehicles (MDPVs) and thus included in manufacturers' light-duty truck fleets, while cargo vans sharing the same nameplate are classified as HD vans.
While today's analysis examines the HD pickup and van fleet in isolation, as a basis for analysis supporting the planned final rule, the agencies intend to develop an overall analysis fleet spanning both the light-duty and HD pickup and van fleets.  Doing so could show some technology "spilling over" to HD pickups and vans due, for example, to the application of technology in response to current light-duty standards.  More generally, modeling the two fleets together should tend to more realistically limit the scope and complexity of estimated compliance pathways.
The agencies anticipate that the impact of modeling a combined fleet will primarily arise from engine-transmission inheritance.  While platform sharing between the light-duty and MD pickup and van fleets is relatively small (MDPVs aside), there are a number of instances of engine and transmission sharing across the two fleets.  When the fleets are modeled together, the agencies anticipate that engine inheritance will be implemented across the combined fleet, and therefore only one engine-transmission leader can be defined across the combined fleet.  As with the fleets separately, all vehicles using a shared engine/transmission would automatically adopt technologies adopted by the engine-transmission leader.
The agencies request comment on plans to analyze the light-duty and MD pickup and van fleets jointly in support of planning for the final rule.
         Phase-In Caps
The CAFE model retains the ability to use phase-in caps (specified in model inputs) as proxies for a variety of practical restrictions on technology application.  Unlike vehicle-specific restrictions related to redesign, refreshes or platforms/engines, phase-in caps constrain technology application at the vehicle manufacturer level. They are intended to reflect a manufacturer's overall resource capacity available for implementing new technologies (such as engineering and development personnel and financial resources), thereby ensuring that resource capacity is accounted for in the modeling process.
In previous CAFE rulemakings, redesign/refresh schedules and phase-in caps were the primary mechanisms to reflect an OEM's limited pool of available resources during the rulemaking time frame and the years leading up to the rulemaking time frame, especially in years where many models may be scheduled for refresh or redesign.  The newly-introduced representation platform-, engine-, and transmission-related considerations discussed above augment the model's preexisting representation of redesign cycles and accommodation of phase-in caps.  Considering these new constraints, inputs for today's analysis de-emphasize reliance on phase-in caps.
In this application of the CAFE model, phase-in caps are used only for the most advanced technologies included in the analysis, i.e., SHEVs and lean-burn GDI engines, considering that these technologies are most likely to involve implementation costs and risks not otherwise accounted for in corresponding input estimates of technology cost.  For these two technologies, the agencies have applied caps that begin at 3 percent (i.e., 3 percent of the manufacturer's production) in MY 2017, increase at 3 percent annually during the ensuing nine years (reaching 30 percent in the MY 2026), and subsequently increasing at 5 percent annually for four years (reaching 50 percent in MY 2030).  Note that the agencies did not feel that lean-burn engines were feasible in the timeframe of this rulemaking, so decided to reject any model runs where they were selected. Due to the cost ineffectiveness of this technology, it was never chosen. The agencies request comment on the appropriateness of these phase-in caps as proxies for constraints that, though not monetized by the agencies, nonetheless limit rates at which these two technologies can practicably be deployed, and on the appropriateness of setting inputs to stop applying phase-in caps to other technologies in this analysis.  Comments on this issue should provide information supporting any alternative recommended inputs.
         Impact of Vehicle Technology Application Requirements
Compared to prior analyses of light-duty standards, these model changes, along with characteristics of the HD pickup and van fleet result in some changes in the broad characteristics of the model's application of technology to manufacturers' fleets.  First, since the number of HD pickup and van platforms in a portfolio is typically small, compliance with standards may appear especially "lumpy" (compared to previous applications of the CAFE model to the more highly segmented light-duty fleet), with significant over compliance when widespread redesigns precede stringency increases, and/or significant application of carried-forward (aka "banked") credits.
Second, since the use of phase-in caps has been de-emphasized and manufacturer technology deployment remains tied strongly to estimated product redesign and freshening schedules, technology penetration rates may jump more quickly as manufacturers apply technology to high-volume products in their portfolio.
By design, restrictions that enforce commonality of mass reduction and aerodynamic technologies on variants of a platform, and those that enforce engine inheritance, will result in fewer vehicle-technology combinations in a manufacturer's future modeled fleet.  These restrictions are expected to more accurately capture the true costs associated with producing and maintaining a product portfolio.
         Accounting for Test Weight, Payload, and Towing Capacity
As mentioned above, NHTSA has also revised the CAFE model to explicitly account for the regulatory "binning" of test weights used to certify light-duty fuel economy and HD pickup and van fuel consumption for purposes of evaluating fleet-level compliance with fuel economy and fuel consumption standards.   For HD pickups and vans, test weight (TW) is based on adjusted loaded vehicle weight (ALVW), which is defined as the average of gross vehicle weight rating (GVWR) and curb weight (CW). TW values are then rounded, resulting in TW "bins":
      ALVW <= 4,000 lb.:  TW rounded to nearest 125 lb.
      4000 lb. < ALVW <= 5,500 lb.:  TW rounded to nearest 250 lb.
      ALVW > 5,500 lb.:  TW rounded to nearest 500 lb.
This "binning" of TW is relevant to calculation of fuel consumption reductions accompanying mass reduction.  Model inputs for mass reduction (as an applied technology) are expressed in terms of a percentage reduction of curb weight and an accompanying estimate of the percentage reduction in fuel consumption, setting aside rounding of test weight.  Therefore, to account for rounding of test weight, NHTSA has modified these calculations as follows:
∆FCrounded_TW=∆TWx∆FCunrounded_TW∆CW
where:
      ∆CW = % change in curb weight (from model input),
            ∆FCunrounded_TW = % change in fuel consumption (from model input), without TW rounding,
      ∆TW = % change in test weight (calculated), and
      ∆FCrounded_TW = % change in fuel consumption (calculated), with TW rounding.
As a result, some applications of vehicle mass reduction will produce no compliance benefit at all, in cases where the changes in ALVW are too small to change test weight when rounding is taken into account.  On the other hand, some other applications of vehicle mass reduction will produce significantly more compliance benefit than when rounding is not taken into account, in cases where even small changes in ALVW are sufficient to cause vehicles' test weights to increase by, e.g., 500 pounds when rounding is accounted for.  Model outputs now include initial and final TW, GVWR, and GCWR (and, as before, CW) for each vehicle model in each model year, and the agencies invite comment on the extent to which these changes to account explicitly for changes in TW are likely to produce more realistic estimates of the compliance impacts of reductions in vehicle mass.
In addition, considering that the regulatory alternatives in the agencies' analysis all involve attribute-based standards in which underlying fuel consumption targets vary with "work factor" (defined by the agencies as the sum of three quarters of payload, one quarter of towing capacity, and 500 lb. for vehicles with 4WD), NHTSA has modified the CAFE model to apply inputs defining shares of curb weight reduction to be "returned" to payload and shares of GVWR reduction to be returned to towing capacity.  The standards' dependence on work factor provides some incentive to increase payload and towing capacity, both of which are buyer-facing measures of vehicle utility.  In the agencies' judgment, this provides reason to assume that if vehicle mass is reduced, manufacturers are likely to "return" some of the change to payload and/or towing capacity.  For this analysis, the agencies have applied the following assumptions:
   * GVWR will be reduced by half the amount by which curb weight is reduced.  In other words, 50 percent of the curb weight reduction will be returned to payload.
   * GCWR will not be reduced.  In other words, 100 percent of any GVWR reduction will be returned to towing capacity.
   * GVWR/CW and GCWR/GVWR will not increase beyond levels observed among the majority of similar vehicles (or, for outlier vehicles, initial values):
Table VI-16 Ratios for Modifying GVW and GCW as a Function of Mass Reduction

               Maximum Ratios Assumed Enabled by Mass Reduction
Group
                                    GVWR/CW
                                   GCWR/GVWR
Unibody
                                     1.75
                                     1.50
Gasoline pickups > 13k GVWR
                                     2.00
                                     1.50
Other gasoline pickups
                                     1.75
                                     2.25
Diesel SRW pickups
                                     1.75
                                     2.50
All other
                                     1.75
                                     2.25

The first of two of these inputs are specified along with standards for each regulatory alternative, and the GVWR/CW and GCWR/GVWR "caps" are specified separately for each vehicle model in the analysis fleet.
In addition, DOT has changed the model to prevent HD pickup and van GVWR from falling below 8,500 pounds when mass reduction is applied (because doing so would cause vehicles to be reclassified as light-duty vehicles), and to treat any additional mass for hybrid electric vehicles as reducing payload by the same amount (e.g., if adding a strong HEV package to a vehicle involves a 350 pound penalty, GVWR is assumed to remain unchanged, such that payload is also reduced by 350 pounds).
The agencies invite comment on these methods for estimating how changes in vehicle mass may impact fuel consumption, GVWR, and GCWR, and on corresponding inputs to today's analysis.
Development of the Analysis Fleet
As discussed above, both agencies used DOT's CAFE modeling system to estimate technology costs and application rates under each regulatory alternative, including the no action alternative (which reflects continuation of previously-promulgated standards).  Impacts under each of the "action" alternatives are calculated on an incremental basis relative to impacts under the no action alternative.  The modeling system relies on many inputs, including an analysis fleet.  In order to estimate the impacts of potential standards, it is necessary to estimate the composition of the future vehicle fleet.  Doing so enables estimation of the extent to which each manufacturer may need to add technology in response to a given series of attribute-based standards, accounting for the mix and fuel consumption of vehicles in each manufacturer's regulated fleet.  The agencies create an analysis fleet in order to track the volumes and types of fuel economy-improving and CO2-reducing technologies that are already present in the existing vehicle fleet. This aspect of the analysis fleet helps to keep the CAFE model from adding technologies to vehicles that already have these technologies, which would result in "double counting" of technologies' costs and benefits.  An additional step involved projecting the fleet sales into MYs 2019-2030.  This represents the fleet volumes that the agencies believe would exist in MYs 2019-2030.  The following presents an overview of the information and methods applied to develop the analysis fleet, and some basic characteristics of that fleet.  
The resultant analysis fleet is provided in detail at NHTSA's web site, along with all other inputs to and outputs from today's analysis.  The agencies invite comment on this analysis fleet and, in particular, on any other information that should be reflected in an analysis fleet used to update the agencies' analysis for the final rule.  Also, the agencies also invites comment on the potential expansion of this analysis fleet such that the impacts of new HD pickup and van standards can be estimated within the context of an integrated analysis of light-duty vehicles and HD pickups and vans, accounting for interactions between the fleets.
         Data Sources
Most of the information about the vehicles that make up the 2014 analysis fleet was gathered from the 2014 Pre-Model Year Reports submitted to EPA by the manufacturers under Phase 1 of Fuel Efficiency and GHG Emission Program for Medium- and Heavy-Duty Trucks, MYs 2014-2018.

The major manufacturers of class 2b and class 3 trucks (Chrysler, Ford and GM) were asked to voluntarily submit updates to their Pre-Model Year Reports.  Updated data were provided by Chrysler and GM.  These updated data were used in constructing the analysis fleet for these manufacturers.
The agencies agreed to treat this information as Confidential Business Information (CBI) until the publication of the NPRM.  This information can be made public at this time because by now all MY2014 vehicle models have been produced, which makes data about them essentially public information.
These data (by individual vehicle configuration produced in MY2014) include: Projected Production Volume/MY2014 Sales, Drive Type, Axle Ratio, Work Factor, Curb Weight, Test Weight, GVWR, GCWR, Fuel Consumption (gal/100 mile), engine type (gasoline or diesel), engine displacement, transmission type and number of gears.
The column "Engine" of the Pre-Model Year report for each OEM was copied to the column "Engine Code" of the vehicle sheet of the CAFE model market data input file.  Values of "Engine" were changed to Engine Codes for use in the CAFE model.  The codes indicated on the vehicle sheet map the detailed engine data on the engine sheet to the appropriate vehicle on the vehicle sheet of the CAFE model input file.
The column "Trans Class" of the Pre-Model Year report for each OEM was copied to the column "Transmission Code" of the vehicle sheet of the market data input file.   Values of "Trans Class" were changed to Transmission Codes for use in the CAFE model.  The codes indicated on the vehicle sheet map the detailed transmission data on the transmission sheet to the appropriate vehicle on the vehicle sheet of the CAFE model input file.
In addition to information about each vehicle, the agencies need additional information about the fuel economy-improving/CO2-reducing technologies already on those vehicles in order to assess how much and which technologies to apply to determine a path toward future compliance.  Thus, the agencies augmented this information with publicly-available data that includes more complete technology descriptions.  Specific engines and transmissions associated with each manufacturer's trucks were identified using their respective internet sites. Detailed technical data on individual engines and transmissions indicated on the engine sheet and transmission sheet of the CAFE model input file were then obtained from manufacturer internet sites, spec sheets and product literature, Ward's Automotive Group and other commercial internet sites such as cars.com, edmunds.com, and motortrend.com. Specific additional information included:

         *       "Fuel Economy on Secondary Fuel" was calculated as E85 = .74 gasoline fuel economy, or B20 = .98 diesel fuel economy.  These values were duplicated in the columns "Fuel Economy (Ethanol-85)" and "Fuel Economy (Biodiesel-20)" of the CAFE market data input file.  

         *       Values in the columns "Fuel Share (Gasoline)", "Fuel Share (Ethanol-85)", "Fuel Share (Diesel)," and "Fuel Share (Biodiesel-20)" are Volpe assumptions.	

         *       The CAFE model also requires that values of Origin, Regulatory Class, Technology Class, Safety Class, and Seating (Max) be present in the file in order for the model to run.  Placeholder values were added in these columns.

         *       In addition to the data taken from the OEM Pre Model Year submittals, NHTSA added additional data for use by the CAFE model.  These included Platform, Refresh Years, Redesign Years, MSRP, Style, Structure and Fuel Capacity.

         *       MSRP was obtained from web2carz.com and the OEM web sites.

         *       Fuel capacity was obtained from OEM spec sheets and product literature.

         *       The Structure values (Ladder, Unibody) used by the CAFE model were added.  These were determined from OEM product literature and the automotive press.  It should be noted that the new vans such as the Transit in fact utilize a ladder/unibody structure.  Ford product literature uses the term "Uniladder" to describe the structure.  Vans based on this structure are noted in the Vehicle Notes column of the NHTSA input file.

         *       Style values used by the CAFE model were also added: Chassis Cab, Cutaway, Pickup and Van.

Vehicle Redesign Schedules and Platforms  
Product cadence in the Class 2b and 3 pickup market has historically ranged from 7-9 years between major redesigns. However, due to increasing competitive pressures and consumer demands the agency anticipates that manufacturers will generally shift to shorter design cycles resembling those of the light duty market.  Pickup truck manufacturers in the Class 2b and 3 segments are shown to adopt redesign cycles of six years, allowing two redesigns prior to the end of the regulatory period in 2025.  The agencies request comment on the anticipated future use of redesign cycles in this product segment. 
The Class 2b and 3 van market has changed markedly from five years ago.  Ford, Nissan, Ram and Daimler have adopted vans of "Euro Van" appearance, and in many cases now use smaller turbocharged gasoline or diesel engines in the place of larger, naturally-aspirated V8s.  The 2014 Model Year used in this analysis represents a period where most manufacturers, with the exception of General Motors, have recently introduced a completely redesigned product after many years.  The van segment has historically been one of the slowest to be redesigned of any product segment, with some products going two decades or more between redesigns.
Due to new entrants in the field and increased competition, the agencies anticipate that most manufacturers will increase the pace of product redesigns in the van segment, but that they will continue to trail other segments.  The cycle time used in this analysis is approximately ten years between major redesigns, allowing manufacturers only one major redesign during the regulatory period.   The agencies request comment on this anticipated product design cycle.
Additional detail on product cadence assumptions for specific manufacturers is located in Chapter 10 of the draft RIA.
Sales Volume Forecast
Since each manufacturer's required average fuel consumption and GHG levels are sales-weighted averages of the fuel economy/GHG targets across all model offerings, sales volumes play a critical role in estimating that burden.  The CAFE model requires a forecast of sales volumes, at the vehicle model-variant level, in order to simulate the technology application necessary for a manufacturer to achieve compliance in each model year for which outcomes are simulated.
For today's analysis, the agencies relied on the MY 2014 pre-model-year compliance submissions from manufacturers to provide sales volumes at the model level based on the level of disaggregation in which the models appear in the compliance data.  However, the agencies only use these reported volumes without adjustment for MY 2014.  For all future model years, we combine the manufacturer submissions with sales projections from the 2014 Annual Energy Outlook Reference Case and IHS Automotive to determine model variant level sales volumes in future years.   The projected sales volumes by class that appear in the 2014 Annual Energy Outlook as a result of a collection of assumptions about economic conditions, demand for commercial miles traveled, and technology migration from light-duty pickup trucks in response to the concurrent light-duty CAFE/GHG standards. These are shown in Chapter 2 of the draft RIA.
For this analysis, the agencies have limited this analysis fleet to class 2b and 3 HD pickups and vans.  However, especially considering interactions between the light-duty and HD pickup and van fleets (e.g., MDPVs being included in the light-duty fleet), the agencies are evaluating the potential to analyze the fleets in an integrated fashion for the final rule, and invite comment on the extent to which doing so could provide more realistic estimates of the incremental impacts of new standards applicable HD pickups and vans.
The projection of total sales volumes for the Class 2b and 3 market segment was based on the total volumes in the 2014 AEO Reference Case.  For the purposes of this analysis, the AEO2014 calendar year volumes have been used to represent the corresponding model-year volumes.  While AEO2014 provides enough resolution in its projections to separate the volumes for the Class 2b and 3 segments, the agencies deferred to the vehicle manufacturers and chose to rely on the relative shares present in the pre-model-year compliance data.
The relative sales share by vehicle type (van or pickup truck, in this case) was derived from a sales forecast that the agencies purchased from IHS Automotive, and applied to the total volumes in the AEO2014 projection. Table VI-17 shows the implied shares of the total new 2b/3 vehicle market broken down by manufacturer and vehicle type.  
Table VI-17 IHS Automotive Market Share Forecast for 2b/3 vehicles
 
 
                            Model Year Market Share
Manufacturer
Style
                                     2015
                                     2016
                                     2017
                                     2018
                                     2019
                                     2020
                                     2021
Daimler
Van
                                      3%
                                      3%
                                      3%
                                      3%
                                      3%
                                      3%
                                      3%
Fiat
Van
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      3%
Ford
Van
                                      16%
                                      17%
                                      17%
                                      17%
                                      18%
                                      18%
                                      18%
General Motors
Van
                                      12%
                                      12%
                                      11%
                                      12%
                                      13%
                                      13%
                                      13%
Nissan
Van
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
                                      2%
 
 
                                       
                                       
                                       
                                       
                                       
                                       
                                       
Daimler
Pickup
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
Fiat
Pickup
                                      14%
                                      14%
                                      14%
                                      14%
                                      11%
                                      12%
                                      12%
Ford
Pickup
                                      28%
                                      27%
                                      30%
                                      30%
                                      30%
                                      27%
                                      26%
General Motors
Pickup
                                      23%
                                      23%
                                      21%
                                      21%
                                      21%
                                      22%
                                      23%
Nissan
Pickup
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%
                                      0%

Within those broadly defined market shares, volumes at the manufacturer/model-variant level were constructed by applying the model-variant's share of manufacturer sales in the pre-model-year compliance data for the relevant vehicle style, and multiplied by the total volume estimated for that manufacturer and that style.
After building out a set of initial future sales volumes based on the sources described above, the agencies attempted to incorporate new information about changes in sales mix that would not be captured by either the existing sales forecasts or the simulated technology changes in vehicle platforms.  In particular, Ford has announced intentions to phase out their existing Econoline vans, gradually shifting volumes to the new Transit platform for some model variants (notably chassis cabs and cutaways variants) and eliminating offerings outright for complete Econoline vans as early as model year 2015.  In the case of complete Econoline vans, the volumes for those vehicles were allocated to MY2015 Transit vehicles based on assumptions about likely production splits for the powertrains of the new Transit platform.  The volumes for complete Econoline vans were shifted at ratios of 50 percent, 35 percent, and 15 percent for 3.7 L, 3.5 L Eco-boost, and 3.2 L diesel, respectively.  Within each powertrain, sales were allocated based on the percentage shares present in the pre-model-year compliance data. The chassis cab and cutaway variants of the Econoline were phased out linearly between MY2015 and MY2020, at which time the Econolines cease to exist in any form and all corresponding volume resides with the Transits.
Additional Technology Cost and Effectiveness Inputs
In addition to the base technology cost and effectiveness inputs described in 0of this preamble, the CAFE model has some additional cost and effectiveness inputs, described as follows.
The CAFE model accommodates inputs to adjust accumulated effectiveness under circumstances when combining multiple technologies could result in underestimation or overestimation of total incremental effectiveness relative to an "unevolved" baseline vehicle. These so-called synergy factors may be positive, where the combination of the technologies results in greater improvement than the additive improvement of each technology, or negative, where the combination of the technologies is lower than the additive improvement of each technology.  The synergy factors used in this analysis are described in VI-18.
Table VI-18 Technology Pair Effectiveness Synergy Factors for HD Pickups and Vans
                                Technology Pair
                                  Adjustment
                                       
                                Technology Pair
                                  Adjustment
                                   8SPD/CCPS
                                    -4.60%
                                       
                                   IATC/CCPS
                                    -1.30%
                                  8SPD/DEACO
                                    -4.60%
                                       
                                  IATC/DEACO
                                    -1.30%
                                   8SPD/ICP
                                    -4.60%
                                       
                                   IATC/ICP
                                    -1.30%
                                  8SPD/TRBDS1
                                     4.60%
                                       
                                  IATC/TRBDS1
                                     1.30%
                                  AERO2/SHEV1
                                     1.40%
                                       
                                   MR1/CCPS
                                     0.40%
                                  CCPS/IACC1
                                    -0.40%
                                       
                                   MR1/DCP 
                                     0.40%
                                  CCPS/IACC2
                                    -0.60%
                                       
                                    MR1/VVA
                                     0.40%
                                   DCP/IACC1
                                    -0.40%
                                       
                                   MR2/ROLL1
                                    -0.10%
                                   DCP/IACC2
                                    -0.60%
                                       
                                   MR2/SHEV1
                                    -0.40%
                                  DEACD/IATC
                                    -0.10%
                                       
                                  NAUTO/CCPS
                                    -1.70%
                                  DEACO/IACC2
                                    -0.80%
                                       
                                  NAUTO/DEACO
                                    -1.70%
                                  DEACO/MHEV
                                    -0.70%
                                       
                                   NAUTO/ICP
                                    -1.70%
                                  DEACS/IATC
                                    -0.10%
                                       
                                   NAUTO/SAX
                                    -0.40%
                                  DTURB/IATC
                                     1.00%
                                       
                                 NAUTO/TRBDS1
                                     1.70%
                                  DTURB/MHEV
                                    -0.60%
                                       
                                  ROLL1/AERO1
                                     0.10%
                                  DTURB/SHEV1
                                    -1.00%
                                       
                                  ROLL1/SHEV1
                                     1.10%
                                  DVVLD/8SPD
                                    -0.60%
                                       
                                  ROLL2/AERO2
                                     0.20%
                                  DVVLD/IACC2
                                    -0.80%
                                       
                                 SHFTOPT/MHEV
                                    -0.30%
                                  DVVLD/IATC
                                    -0.60%
                                       
                                  TRBDS1/MHEV
                                     0.80%
                                  DVVLD/MHEV
                                    -0.70%
                                       
                                 TRBDS1/SHEV1
                                    -3.30%
                                  DVVLS/8SPD
                                    -0.60%
                                       
                                  TRBDS1/VVA
                                    -8.00%
                                  DVVLS/IACC2
                                    -0.80%
                                       
                                  TRBDS2/EPS
                                    -0.30%
                                  DVVLS/IATC
                                    -0.50%
                                       
                                 TRBDS2/IACC2
                                    -0.30%
                                  DVVLS/MHEV
                                    -0.70%
                                       
                                 TRBDS2/NAUTO
                                    -0.50%
                                       
                                       
                                       
                                   VVA/IACC1
                                    -0.40%
                                       
                                       
                                       
                                   VVA/IACC2
                                    -0.60%
                                       
                                       
                                       
                                   VVA/IATC
                                    -0.60%
The CAFE model also accommodates inputs to adjust accumulated incremental costs under circumstances when the application sequence could result in underestimation or overestimation of total incremental costs relative to an "unevolved" baseline vehicle.  For today's analysis, the agencies have applied one such adjustment, increasing the cost of medium-sized gasoline engines by $513 in cases where turbocharging and engine downsizing is applied with variable valve actuation.
The analysis performed using Method A also applied cost inputs to address some costs encompassed neither by the agencies' estimates of the direct cost to apply these technologies, nor by the agencies' methods for "marking up" these costs to arrive at increases in the new vehicle purchase costs.  To account for the additional costs that could be incurred if a technology is applied and then quickly replaced, the CAFE model accommodates inputs specifying a "stranded capital cost" specific to each technology.  For this analysis, the model was run with inputs to apply about $78 of additional cost (per engine) if gasoline engine turbocharging and downsizing (separately for each "level" considered) is applied and then immediately replaced, declining steadily to zero by the tenth model year following initial application of the technology.  The model also accommodates inputs specifying any additional changes owners might incur in maintenance and post-warranty repair costs.  For this analysis, the model was run with inputs indicating that vehicles equipped with less rolling-resistant tires could incur additional tire replacement costs equivalent to $21-$23 (depending on model year) in additional costs to purchase the new vehicle.  The agencies did not, however, include inputs specifying any potential changes repair costs that might accompany application of any of the above technologies.  A sensitivity analysis using Method A, discussed below, includes a case in which repair costs are estimated using factors consistent with those underlying the indirect cost multipliers used to mark up direct costs for the agencies' central analysis.
The agencies invite comment on all efficacy and cost inputs involved in today's analysis and request that commenters provide any additional data or forward-looking estimates that could be used to support alternative inputs, including those related to costs beyond those reflected in the cost to purchase new vehicles.
Other Analysis Inputs

In addition to the inputs summarized above, the analysis of potential standards for HD pickups and vans makes use of a range of other estimates and assumptions specified as inputs to the CAFE modeling system.  Some significant inputs (e.g., estimates of future fuel prices) also applicable to other MDHD segments are discussed below in Section IX.  Others more specific to the analysis of HD pickups and vans are as follows:
         Vehicle Survival and Mileage Accumulation:  
Today's analysis estimates the travel, fuel consumption, and emissions over the useful lives of vehicles produced during model years 2014-2030.  Doing so requires initial estimates of these vehicles' survival rates (i.e., shares expected to remain in service) and mileage accumulation rates (i.e., anticipated annual travel by vehicles remaining in service), both as a function of vehicle vintage (i.e., age).  These estimates are based on an empirical analysis of changes in the fleet of registered vehicles over time, in the case of survival rates, and usage data collected as part of the last Vehicle In Use Survey (the 2002 VIUS), in the case of mileage accumulation.
         Rebound Effect
Expressed as an elasticity of mileage accumulation with respect to the fuel cost per mile of operation, the agencies have applied a rebound effect of 10 percent for today's analysis.
         On-Road "Gap"
The model was run with a 20 percent adjustment to reflect differences between on-road and laboratory performance.
         Fleet Population Profile
Though not reported here, cumulative fuel consumption and CO2 emissions are presented in the accompanying draft EIS, and these calculations utilize estimates of the numbers of vehicles produced in each model year remaining in service in calendar year 2014.  The initial age distribution of the registered vehicle population in 2014 is based on vehicle registration data acquired by NHTSA from R.L. Polk Company.  
         Past Fuel Consumption Levels
Though not reported here, cumulative fuel consumption and CO2 emissions are presented in the accompanying draft EIS, and these calculations require estimates of the performance of vehicles produced prior to model year 2014.  Consistent with AEO 2014, the model was run with the assumption that gasoline and diesel HD pickups and vans averaged 14.9 mpg and 18.6 mpg, respectively, with gasoline versions averaging about 48 percent of production.
         Long-Term Fuel Consumption Levels
Though not reported here, longer-term estimates of fuel consumption and emissions are presented in the accompanying draft EIS.  These estimates include calculations involving vehicle produced after MY 2030 and, consistent with AEO 2014, the model was run with the assumption that fuel consumption and CO2 emission levels will continue to decline at 0.05 percent annually (compounded) after MY 2030.
         Payback Period
To estimate in what sequence and to what degree manufacturers might add fuel-saving technologies to their respective fleets, the CAFE model iteratively ranks remaining opportunities (i.e., applications of specific technologies to specific vehicles) in terms of effective cost, primary components of which are the technology cost and the avoided fuel outlays, attempting to minimize effective costs incurred.  Depending on inputs, the model also assumes manufacturers may improve fuel consumption beyond requirements insofar as doing so will involve applications of technology at negative effective cost -- i.e., technology application for which buyers' up-front costs are quickly paid back through avoided fuel outlays.  This calculation includes only fuel outlays occurring within a specified payback period.  For this analysis, a payback period of 6 months was applied for the dynamic baseline case, or Alternative 1b.  Thus, for example, a manufacturer already in compliance with standards is projected to apply a fuel consumption improvement projected to cost $250 (i.e., as a cost that could be charged to the buyer at normal profit to the manufacturer) and reduce fuel costs by $500 in the first year of vehicle operation.  The agencies have conducted the same analysis applying a payback period of 0 months for the flat baseline case, or Alternative 1a.  
         Civil Penalties
EPCA and EISA require that a manufacturer pay civil penalties if it does not have enough credits to cover a shortfall with one or both of the light-duty CAFE standards in a model year. While these provisions do not apply to HD pickups and vans, at this time, the CAFE model will show civil penalties owed in cases where available technologies and credits are estimated to be insufficient for a manufacturer to achieve compliance with a standard.  These model-reported estimates have been excluded from this analysis.
         Coefficients for Fatality Calculations
Today's analysis includes estimates of the extent to which HD pickups and vans produced during MYs 2014-2030 may be involved in fatal crashes, considering the mass, survival, and mileage accumulation of these vehicles, taking into account changes in mass and mileage accumulation under each regulatory alternative.  These calculations make use of the same coefficients applied to light trucks by DOT in its 2012 rulemaking analysis supporting post-2017 CAFE standards.  Baseline rates of involvement in fatal crashes are 13.03 and 13.24 fatalities per billion miles for vehicles with initial curb weights above and below 4,594 pounds, respectively.  Considering that the data underlying the corresponding statistical analysis included observations only through calendar year 2010, these rates are reduced by 9.6 percent to account for subsequent impacts of recent Federal Motor Vehicle Safety Standards (FMVSS) and anticipated behavioral changes (e.g., continued increases in seat belt use).  For vehicles above 4,594 pounds -- i.e., the majority of the HD pickup and van fleet -- mass reduction is estimated to reduce the net incidence of highway fatalities by 0.34 percent per 100 pounds of removed curb weight, because in crashes involving multiple vehicles, fatalities among occupants of other vehicles will be reduced.  For the few HD pickups and vans below 4,594 pounds, mass reduction is estimated to increase the net incidence of highway fatalities by 0.52 percent per 100 pounds.  Consistent with new DOT guidance, the social cost of highway fatalities is estimated using a VSL (value of statistical life) of $9.36m in 2014, increasing thereafter at 1.18 percent annually.
         Compliance Credit Provisions
Today's analysis accounts for the potential to over comply with standards and thereby earn compliance credits, applying these credits to ensuring compliance requirements.  In doing so, the agencies treat any unused carried-forward credits as expiring after five model years, consistent with current and proposed standards.  For today's analysis, the agencies are not estimating the potential to "borrow" -- i.e., to carry credits back to past model years.
         Emission Factors
While CAFE model calculates vehicular CO2 emissions directly on a per-gallon basis using fuel consumption and fuel properties (density and carbon content), the model calculates emissions of other pollutants (methane, nitrogen oxides, ozone precursors, carbon monoxide, sulfur dioxide, particulate matter, and air toxics) on a per-mile basis.  In doing so, the Method A analysis used corresponding emission factors estimated using EPA's MOVES model.  To estimate emissions (including CO2) from upstream processes involved in producing, distributing, and delivering fuel, NHTSA has applied emission factors -- all specified on a gram per gallon basis -- derived from Argonne National Laboratory's GREET model.
         Refueling Time Benefits
To estimate the value of time savings associated with vehicle refueling, the Method A analysis used estimates that an average refueling event involves refilling 60 percent of the tank's capacity over the course of 3.5 minutes, at an hourly cost of $27.22..
         External Costs of Travel
Changes in vehicle travel will entail economic externalities.  To estimate these costs, the Method A analysis used estimates that congestion-, accident-, and noise-related externalities will total 5.1 cent/mi., 2.8 cent/mi., and 0.1 cent/mi., respectively.
         Ownership and Operating Costs
Method A results predict that the total cost of vehicle ownership and operation will change not just due to changes in vehicle price and fuel outlays, but also due to some other costs likely to vary with vehicle price.  To estimate these costs, NHTSA has applied factors of 5.5 percent (of price) for taxes and fees, 15.3 percent for financing, 19.2 percent for insurance, 1.9 percent for relative value loss.  The Method A analysis also estimates that average vehicle resale value will increase by 25 percent of any increase in new vehicle price.
DOT CAFE Model Analysis of Impacts of Regulatory Alternatives for HD Pickups and Vans
         Industry Impacts
The agencies' analysis fleet provides a starting point for estimating the extent to which manufacturers might add fuel-saving (and, therefore, CO2-avoiding) technologies under various regulatory alternatives, including the no-action alternative that defines a baseline against which to measure estimated impacts of new standards.  The analysis fleet is a forward-looking projection of production of new HD pickups and vans, holding vehicle characteristics (e.g., technology content and fuel consumption levels) constant at model year 2014 levels, and adjusting production volumes based on recent DOE and commercially-available forecasts.  This analysis fleet includes some significant changes relative to the market characterization that was used to develop the Phase 1 standards applicable starting in model year 2014; in particular, the analysis fleet includes some new HD vans (e.g., Ford's Transit and Fiat/Chrysler's Promaster) that are considerably more fuel-efficient than HD vans these manufacturers have previously produced for the U.S. market.
While the proposed standards are scheduled to begin in model year 2021, the requirements they define are likely to influence manufacturers' planning decisions several years in advance.  This is true in light-duty planning, but accentuated by the comparatively long redesign cycles and small number of models and platforms offered for sale in the 2b/3 market segment.  Additionally, manufacturers will respond to the cost and efficacy of available fuel consumption improvements, the price of fuel, and the requirements of the Phase 1 standards that specify maximum allowable average fuel consumption and GHG levels for MY2014-MY2018 HD pickups and vans (the final standard for MY2018 is held constant for model years 2019 and 2020).  The forward-looking nature of product plans that determine which vehicle models will be offered in the model years affected by the proposed standards lead to additional technology application to vehicles in the analysis fleet that occurs in the years prior to the start of the proposed standards.  From the industry perspective, this means that manufacturers will incur costs to comply with the proposed standards in the baseline and that the total cost of the proposed regulations will include some costs that occur prior to their start, and represent incremental changes over a world in which manufacturers will have already modified their vehicle offerings compared to today.
Table VI-19 MY2021 Baseline Costs for Manufacturers in 2b/3 Market Segment in the Dynamic Baseline, or Alternative 1b
                                 Manufacturer
                          Average Technology Cost ($)
                           Total Cost Increase ($m)
                                 Chrysler/Fiat
                                      275
                                      27
                                    Daimler
                                      18
                                       0
                                     Ford
                                      258
                                      78
                                General Motors
                                      782
                                      191
                                    Nissan
                                      282
                                       3
                                   Industry
                                      442
                                      300
As Table VI-19 shows, the industry as a whole is expected to add about $440 of new technology to each new vehicle model by 2021 under the no-action alternative defined by the Phase 1 standards.  Reflecting differences in projected product offerings in the analysis fleet, some manufacturers (notably Daimler) are significantly less constrained by the Phase 1 standards than others and face lower cost increases as a result.  General Motors (GM) shows the largest increase in average vehicle cost, but results for GM's closest competitors (Ford and Chrysler/Fiat) do not include the costs of their recent van redesigns, which are already present in the analysis fleet (discussed in greater detail below).
The above results reflect the assumption that manufacturers having achieved compliance with standards might act as if buyers are willing to pay for further fuel consumption improvements that "pay back" within 6 months (i.e., those improvements whose incremental costs are exceeded by savings on fuel within the first six months of ownership).  It is also possible that manufacturers will choose not to migrate cost-effective technologies to the 2b/3 market segment from similar vehicles in the light-duty market.  To examine this possibility, all regulatory alternatives were also analyzed using the DOT CAFE model (Method A) with a 0-month payback period in lieu of the 6-month payback period discussed above.  (A sensitivity analysis using Method A, discussed below, also explores longer payback periods, as well as the combined effect of payback period and fuel price on vehicle design decisions.)  Resultant technology costs in model year 2021 results for the no-action alternative, summarized in Table VI-20 below, are quite similar to those shown above for the 6-month payback period. Due to the similarity between the two baseline characterizations, results in the following discussion represent differences relative to only the 6-month payback baseline.
Table VI-20 MY2021 Baseline Costs for HD Pickups and Vans in the Flat Baseline, or Alternative 1a
                                 Manufacturer
                          Average Technology Cost ($)
                           Total Cost Increase ($m)
                                 Chrysler/Fiat
                                      268
                                      27
                                    Daimler
                                       0
                                       0
                                     Ford
                                      248
                                      75
                                General Motors
                                      767
                                      188
                                    Nissan
                                      257
                                       3
                                   Industry
                                      431
                                      292
The results below represent the impacts of several regulatory alternatives, including those defined by the proposed standards, as incremental changes over the baseline, where the baseline is defined as the state of the world in the absence of the proposed regulatory action. Large-scale, macroeconomic conditions like fuel prices are constant across all alternatives, including the baseline, as are the fuel economy improvements under the no-action alternative defined by the Phase 1 MDHD rulemaking that covers model years 2014  -  2018 and is constant from model year 2018 through 2020.  In the baseline scenario, the Phase 1 standards are assumed to remain in place and at 2018 levels throughout the analysis (i.e. MY 2030).  The only difference between the definitions of the alternatives is the stringency of the proposed standards starting in MY 2021 and continuing through either MY 2025 or MY 2027, and all of the differences in outcomes across alternatives are attributable to differences in the standards. 
The standards vary in stringency across regulatory alternatives (1  -  5), but as discussed above, all of the standards are based on the curve developed in the Phase 1 standards that relate fuel economy and GHG emissions to a vehicle's work factor. The alternatives considered here represent different rates of annual increase in the curve defined for model year 2018, growing from a 0 percent annual increase (Alternative 1, the baseline or "no-action" alternative) up to a 4 percent annual increase (Alternative 5).  Table VI-21 shows a summary of outcomes by alternative incremental to the baseline (Alternative 1b) for Model Year 2030, with the exception of technology penetration rates, which are absolute.  
The technologies applied by the CAFE model have been grouped (in most cases) to give readers a general sense of which types of technology are applied more frequently than others, and are more likely to be offered in new class 2b/3 vehicles once manufacturers are fully compliant with the standards in the alternative.  Model year 2030 was chosen to account for technology application that occurs once the standards have stabilized, but manufacturers are still redesigning products to achieve compliance  -  generating technology costs and benefits in those model years.  The summaries of technology penetration are also intended to reflect the relationship between technology application and cost increases across the alternatives.  The table rows present the degree to which specific technologies will be present in new class 2b and class 3 vehicles in 2030, and correspond to: Variable valve timing (VVT) and/or variable valve lift (VVL), cylinder deactivation, direct injection, engine turbocharging, 8-speed automatic transmissions, electric power-steering and accessory improvements, micro-hybridization (which reduces engine idle, but does not assist propulsion), full hybridization (integrated starter generator or strong hybrid that assists propulsion and recaptures braking energy), and aerodynamic improvements to the vehicle shape.  In addition to the technologies in the following tables, there are some lower-complexity technologies that have high market penetration across all the alternatives and manufacturers; low rolling-resistance tires, low friction lubricants, and reduced engine friction, for example. 
Table VI-21 Summary of HD Pickups and Vans Alternatives' Impact on Industry versus the Dynamic Baseline, Alternative 1b
                                  Alternative
                                       2
                                       3
                                       4
                                       5
                          Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
                        Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                           Total Stringency Increase
                                     9.6%
                                     16.2%
                                     16.3%
                                     18.5%
                   Average Fuel Economy  (miles per gallon)
                                   Required
                                     19.04
                                     20.57
                                     20.57
                                     21.14
                                   Achieved
                                     19.14
                                     20.61
                                     20.83
                                     21.27
--------------------------------------------------------------------------------
Average Fuel Consumption (gallons /100 mi.)
--------------------------------------------------------------------------------
Required
                                     5.25
                                     4.86
                                     4.86
                                     4.73
                                   Achieved
                                     5.22
                                     4.85
                                     4.80
                                     4.70
                    Average Greenhouse Gas Emissions (g/mi)
                                   Required
                                      495
                                      458
                                      458
                                      446
                                   Achieved
                                      491
                                      458
                                      453
                                      444
                          Technology Penetration (%)
                                VVT and/or VVL
                                      46
                                      46
                                      46
                                      46
                                Cylinder Deac.
                                      29
                                      21
                                      21
                                      21
                               Direct Injection
                                      17
                                      25
                                      31
                                      32
                                 Turbocharging
                                      55
                                      63
                                      63
                                      63
                                  8-Speed AT
                                      67
                                      96
                                      96
                                      97
                               EPS, Accessories
                                      54
                                      80
                                      79
                                      79
                                  Stop Start
                                       0
                                       0
                                      10
                                      13
                               Hybridization[a]
                                       0
                                       8
                                      35
                                      51
                              Aero. Improvements
                                      36
                                      78
                                      78
                                      78
                        Mass Reduction (vs. No-Action)
                                   CW (lb.)
                                      239
                                      243
                                      325
                                      313
                                    CW (%)
                                      3.7
                                      3.7
                                      5.0
                                      4.8
                        Technology Cost (vs. No-Action)
                                Average ($) [b]
                                      578
                                     1,348
                                     1,655
                                     2,080
                                 Total ($m) c
                                      437
                                     1,019
                                     1,251
                                     1,572
                             Payback period (m) c
                                      25
                                      31
                                      34
                                      38
         a Includes mild hybrids (ISG) and strong HEVs.
         [b] Values used in Methods A & B
         [c] Values used in Method A, calculated using a 3% discount rate.
In general, the model projects that the standards would cause manufacturers to produce HD pickups and vans that are lighter, more aerodynamic, and more technologically complex across all the alternatives.  As  Table VI-21 shows, there is a difference between the relatively small increases in required fuel economy and average incremental technology cost between the alternatives, suggesting that the challenge of improving fuel consumption and CO2 emissions accelerates as stringency increases (i.e., that there may be a "knee" in the relationship between technology cost and reductions in fuel consumption/GHG emissions).  Despite the fact that the required average fuel consumption level changes by about 3 percent between Alternative 4 and Alternative 5, average technology cost increases by more than 25 percent.  These differences help illustrate the clustered character of this market segment, where relatively small increases in fuel economy can lead to much larger cost increases if entire platforms must be changed in response to the standards. 
The contrast between alternatives 3 and 4 is even more prominent, with an identical required fuel economy improvement leading to price increases greater than 20 percent based on the more rapid rate of increase and shorter time span of Alternative 4, which achieves all of its increases by MY 2025 while Alternative 3 continues to increase at a slower rate until MY 2027.  Despite these differences, the increase in average payback period when moving from Alternative 3 to Alternative 4 to Alternative 5 is fairly constant at around an additional three months for each jump in stringency.
Manufacturers offer few models, typically only a pickup truck and/or a cargo van, and while there are a large number of variants of each model, the degree of component sharing across the variants can make diversified technology application either economically impractical or impossible.  This forces manufacturers to apply some technologies more broadly in order to achieve compliance than they might do in other market segments (passenger cars, for example).  This difference between broad and narrow application  -  where some technologies must be applied to entire platforms, while some can be applied to individual model variants  -  also explains why certain technology penetration rates decrease between alternatives of increasing stringency (cylinder deactivation or mass reductions in Table VI-21, for example).  For those cases, narrowly applying a more advanced (and costly) technology can be a more cost effective path to compliance and lead to reductions in the amount of lower-complexity technology that is applied. 
One driver of the change in technology cost between Alternative 3 and Alternative 4 is the amount of hybridization projected to result from the implementation of the standards.  While only about 5 percent full hybridization (defined as either integrated starter-generator or strong hybrid) is expected to be needed to comply with Alternative 3, the higher rate of increase and compressed schedule moving from Alternative 3 to Alternative 4 is enough to increase the percentage of the fleet adopting full hybridization by a factor of two.  To the extent that manufacturers are concerned about introducing hybrid vehicles in the 2b and 3 market, it is worth noting that new vehicles subject to Alternative 3 achieve the same fuel economy as new vehicle subject to Alternative 4 by 2030, with less hybridization required to achieve the improvement.
The alternatives also lead to important differences in outcomes at the manufacturer level, both from the industry average and from each other.  General Motors, Ford, and Chrysler (Fiat), are expected to have approximately 95 percent of the 2b/3 new vehicle market during the years that the proposed standards are being phased in.  Due to their importance to this market and the similarities between their model offerings, these three manufacturers are discussed together and a summary of the way each is impacted by the standards appears below in Table VI-22, Table VI-23, and Table VI-24 for General Motors, Ford, and Chrysler/Fiat, respectively.
Table VI-22 Summary of impacts on General Motors by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
                                  Alternative
                                       2
                                       3
                                       4
                                       5
                          Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
                        Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
                                   Required
                                     18.38
                                     19.96
                                      20
                                     20.53
                                   Achieved
                                     18.43
                                     19.95
                                     20.24
                                     20.51
                  Average Fuel Consumption (gallons /100 mi.)
                                   Required
                                     5.44
                                     5.01
                                       5
                                     4.87
                                   Achieved
                                     5.42
                                     5.01
                                     4.94
                                     4.87
                    Average Greenhouse Gas Emissions (g/mi)
                                   Required
                                      507
                                      467
                                      467
                                      455
                                   Achieved
                                      505
                                      468
                                      461
                                      455
                          Technology Penetration (%)
                                VVT and/or VVL
                                      64
                                      64
                                      64
                                      64
                                Cylinder Deac.
                                      47
                                      47
                                      47
                                      47
                               Direct Injection
                                      18
                                      18
                                      36
                                      36
                                 Turbocharging
                                      53
                                      53
                                      53
                                      53
                                  8-Speed AT
                                      36
                                      100
                                      100
                                      100
                               EPS, Accessories
                                      100
                                      100
                                      100
                                      100
                                  Stop Start
                                       0
                                       0
                                       2
                                       0
                                 Hybridization
                                       0
                                      19
                                      79
                                      100
                              Aero. Improvements
                                      100
                                      100
                                      100
                                      100
                        Mass Reduction (vs. No-Action)
                                   CW (lb.)
                                      325
                                      161
                                      158
                                      164
                                    CW (%)
                                      5.3
                                      2.6
                                      2.6
                                      2.7
                        Technology Cost (vs. No-Action)
                                Average ($) [a]
                                      785
                                     1,706
                                     2,244
                                     2,736
                         Total ($m, undiscounted) [b]
                                      214
                                      465
                                      611
                                      746
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

Table VI-23 Summary of Impacts on Ford by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
                                  Alternative
                                       2
                                       3
                                       4
                                       5
                          Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
                        Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
                                   Required
                                     19.42
                                     20.96
                                     20.92
                                     21.51
                                   Achieved
                                     19.5
                                     21.04
                                     21.28
                                     21.8
                  Average Fuel Consumption (gallons /100 mi.)
                                   Required
                                     5.15
                                     4.77
                                     4.78
                                     4.65
                                   Achieved
                                     5.13
                                     4.75
                                     4.70
                                     4.59
                    Average Greenhouse Gas Emissions (g/mi)
                                   Required
                                      485
                                      449
                                      450
                                      438
                                   Achieved
                                      482
                                      447
                                      443
                                      433
                          Technology Penetration (%)
                                VVT and/or VVL
                                      34
                                      34
                                      34
                                      34
                                Cylinder Deac.
                                      18
                                       0
                                       0
                                       0
                               Direct Injection
                                      16
                                      34
                                      34
                                      34
                                 Turbocharging
                                      51
                                      69
                                      69
                                      69
                                  8-Speed AT
                                      100
                                      100
                                      100
                                      100
                               EPS, Accessories
                                      41
                                      62
                                      59
                                      59
                                  Stop Start
                                       0
                                       0
                                      20
                                      29
                                 Hybridization
                                       0
                                       2
                                      14
                                      30
                              Aero. Improvements
                                       0
                                      59
                                      59
                                      59
                        Mass Reduction (vs. No-Action)
                                   CW (lb.)
                                      210
                                      202
                                      379
                                      356
                                    CW (%)
                                      3.2
                                       3
                                      5.7
                                      5.3
                        Technology Cost (vs. No-Action)
                                Average ($) [a]
                                      506
                                     1,110
                                     1,353
                                     1,801
                         Total ($m, undiscounted) [b]
                                      170
                                      372
                                      454
                                      604
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate
         
Table VI-24 Summary of Impacts on Fiat/Chrysler by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
Required
                                     18.73
                                     20.08
                                     20.12
                                     20.70
Achieved
                                     18.83
                                     20.06
                                     20.10
                                     20.70
                  Average Fuel Consumption (gallons /100 mi.)
Required
                                     5.34
                                     4.98
                                     4.97
                                     4.83
Achieved
                                     5.31
                                     4.99
                                     4.97
                                     4.83
                    Average Greenhouse Gas Emissions (g/mi)
Required
                                      515
                                      480
                                      479
                                      466
Achieved
                                      512
                                      481
                                      480
                                      467
                          Technology Penetration (%)
VVT and/or VVL
                                      40
                                      40
                                      40
                                      40
Cylinder Deac.
                                      23
                                      23
                                      23
                                      23
Direct Injection
                                      17
                                      17
                                      17
                                      17
Turbocharging
                                      74
                                      74
                                      74
                                      74
8-Speed AT
                                      65
                                      88
                                      88
                                      88
EPS, Accessories
                                       0
                                      100
                                      100
                                      100
Stop-Start
                                       0
                                       0
                                       0
                                       0
Hybridization
                                       0
                                       3
                                       3
                                      10
Aero. Improvements
                                       0
                                      100
                                      100
                                      100
                        Mass Reduction (vs. No-Action)
CW (lb.)
                                      196
                                      649
                                      648
                                      617
CW (%)
                                      2.8
                                      9.1
                                      9.1
                                      8.7
                        Technology Cost (vs. No-Action)
Average ($) [a]
                                      434
                                     1,469
                                     1,486
                                     1,700
Total ($m, undiscounted) [b]
                                      48
                                      163
                                      164
                                      188
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

The fuel consumption and GHG standards require manufacturers to achieve an average level of compliance, represented by a sales-weighted average across the specific targets of all vehicles offered for sale in a given model year, such that each manufacturer will have a unique required consumption/emissions level determined by the composition of its fleet, as illustrated above.  However, there are more interesting differences than the small differences in required fuel economy levels among manufacturers.  In particular, the average incremental technology cost increases with the stringency of the alternative for each manufacturer, but the size of the cost increase from one alternative to the next varies among them, with General Motors showing considerably larger increases in cost moving from Alternative 3 to Alternative 4, than from either Alternative 2 to Alternative 3 or Alternative 4 to Alternative 5. Ford is estimated to have more uniform cost increases from each alternative to the next, in increasing stringency, though still benefits from the reduced pace and longer period of increase associated with Alternative 3 compared to Alternative 4.   
The simulation results show all three manufacturers facing cost increases when the stringency of the standards move from 2.5 percent annual increases over the period from MY 2021  -  2027 to 3.5 percent annual increases from MY 2021 - 2025, but General Motors has the largest at 75 percent more than the industry average price increase for Alternative 4.  GM also faces higher cost increases in Alternative 2 about 50 percent more than either Ford or Fiat/Chrysler.  And for the most stringent alternative considered, the agencies estimate that General Motors would face average cost increases of more than $2,700, in addition to the more than $700 increase in the baseline  -  approaching nearly $3,500 per vehicle over today's prices.
Technology choices also differ by manufacturer, and some of those decisions are directly responsible for the largest cost discrepancies.  For example, GM is estimated to engage in the least amount of mass reduction among the Big 3 after Phase 1, and much less than Chrysler/Fiat, but reduces average vehicle mass by over 300 pounds in the baseline  -  suggesting that some of GM's easiest Phase 1 compliance opportunities can be found in lightweighting technologies.  Similarly, Chrysler/Fiat is projected to apply less hybridization than the others, and much less than General Motors, which is simulated to have full hybrids (either integrated starter generator or complete hybrid system) on all of its fleet by 2030, nearly 20 percent of which will be strong hybrids, in Alternative 4 and the strong hybrid share decreases to about 18 percent in Alternative 5, as some lower level technologies are applied more broadly.  Because the analysis applies the same technology inputs and the same logic for selecting among available opportunities to apply technology, the unique situation of each manufacturer determined which technology path is projected as the most cost-effective.  
In order to understand the differences in incremental technology costs and fuel economy achievement across manufacturers in this market segment, it is important to understand the differences in their starting position relative to the proposed standards.  One important factor, made more obvious in the following figures, is the difference between the fuel economy and performance of the recently redesigned vans offered by Fiat/Chrysler and Ford (the Promaster and Transit, respectively), and the more traditionally-styled vans that continue to be offered by General Motors (the Express/Savannah).  In MY 2014, Ford began the phase-out of the Econoline van platform, moving those volumes to the Euro-style Transit vans (discussed in more detail in Section 0D.2).  The Transit platform represents a significant improvement over the existing Econoline platform from the perspective of fuel economy, and for the purpose of complying with the standards, the relationship between the Transit's work factor and fuel economy is a more favorable one than the Econoline vans it replaces.  Since the redesign of van offerings from both Chrysler/Fiat and Ford occur in (or prior to) the 2014 model year, the costs, fuel consumption improvements, and reductions of vehicle mass associated with those redesigns are included in the analysis fleet, meaning they are not carried as part of the compliance modeling exercise.  By contrast, General Motors is simulated to redesign their van offerings after 2014, such that there is a greater potential for these vehicles to incur additional costs attributable to new standards, unlike the costs associated with the recent redesigns of their competitors.  The inclusion of these new Ford and Chrysler/Fiat products in the analysis fleet is the primary driver of the cost discrepancy between GM and its competitors in both the baseline and Alternative 2, when Ford and Chrysler/Fiat have to apply considerably less technology to achieve compliance. 
The remaining 5 percent of the 2b/3 market is attributed to two manufacturers, Daimler and Nissan, which, unlike the other manufacturers in this market segment, only produce vans.  The vans offered by both manufacturers currently utilize two engines and two transmissions, although both Nissan engines are gasoline engines and both Daimler engines are diesels.  Despite the logical grouping, these two manufacturers are impacted much differently by the proposed standards.  For the least stringent alternative considered, Daimler adds no technology and incurs no incremental cost in order to comply with the standards.  At stringency increases greater than or equal to 3.5 percent per year, Daimler only really improves some of their transmissions and improves the electrical accessories of its Sprinter vans.  By contrast, Nissan's starting position is much weaker and their compliance costs closer to the industry average in Table VI-21.  This difference could increase if the analysis fleet supporting the final rule includes forthcoming Nissan HD pickups.
Table VI-25 Summary of Impacts on Daimler by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
Required
                                     23.36
                                     25.19
                                     25.25
                                     25.91
Achieved
                                     25.23
                                     25.79
                                     25.79
                                     26.53
                  Average Fuel Consumption (gallons /100 mi.)
Required
                                     4.28
                                     3.97
                                     3.96
                                     3.86
Achieved
                                     3.96
                                     3.88
                                     3.88
                                     3.77
                    Average Greenhouse Gas Emissions (g/mi)
Required
                                      436
                                      404
                                      404
                                      393
Achieved
                                      404
                                      395
                                      395
                                      384
                          Technology Penetration (%)
VVT and/or VVL
                                       0
                                       0
                                       0
                                       0
Cylinder Deac.
                                       0
                                       0
                                       0
                                       0
Direct Injection
                                       0
                                       0
                                       0
                                       0
Turbocharging
                                      44
                                      44
                                      44
                                      44
8-Speed AT
                                       0
                                      44
                                      44
                                      100
EPS, Accessories
                                       0
                                       0
                                       0
                                       0
Stop-Start
                                       0
                                       0
                                       0
                                       0
Hybridization
                                       0
                                       0
                                       0
                                       0
Aero. Improvements
                                       0
                                       0
                                       0
                                       0
                        Mass Reduction (vs. No-Action)
CW (lb.)
                                       0
                                       0
                                       0
                                       0
CW (%)
                                       0
                                       0
                                       0
                                       0
                        Technology Cost (vs. No-Action)
Average ($) [a]
                                       0
                                      165
                                      165
                                      374
Total ($m, undiscounted) [b]
                                       0
                                       4
                                       4
                                       9
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

Table VI-26 Summary of Impacts on Nissan by 2030 in the HD Pickup and Van Market versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                   Average Fuel Economy  (miles per gallon)
Required
                                     19.64
                                     21.19
                                     20.92
                                     21.46
Achieved
                                     19.84
                                     21.17
                                     21.19
                                     21.51
                  Average Fuel Consumption (gallons /100 mi.)
Required
                                     5.09
                                     44.72
                                     4.78
                                     4.66
Achieved
                                     5.04
                                     4.72
                                     4.72
                                     4.65
                    Average Greenhouse Gas Emissions (g/mi)
Required
                                      452
                                      419
                                      425
                                      414
Achieved
                                      448
                                      419
                                      419
                                      413
                          Technology Penetration (%)
VVT and/or VVL
                                      100
                                      100
                                      100
                                      100
Cylinder Deac.
                                      49
                                      49
                                      49
                                      49
Direct Injection
                                      51
                                      51
                                      51
                                      100
Turbocharging
                                      51
                                      51
                                      51
                                      50
8-Speed AT
                                       0
                                      51
                                      51
                                      51
EPS, Accessories
                                       0
                                      100
                                      100
                                      100
Stop-Start
                                       0
                                       0
                                       0
                                       0
Hybridization
                                       0
                                       0
                                       0
                                      28
Aero. Improvements
                                       0
                                      100
                                      100
                                      100
                        Mass Reduction (vs. No-Action)
CW (lb.)
                                       0
                                       0
                                      307
                                      303
CW (%)
                                       0
                                       0
                                       5
                                      4.9
                        Technology Cost (vs. No-Action)
Average ($) [a]
                                      378
                                     1,150
                                     1,347
                                     1,935
Total ($m, undiscounted) [b]
                                       5
                                     15.1
                                     17.7
                                     25.4
      a Values used in Methods A & B
b Values used in Method A, calculated at a 3% discount rate

As Table VI-25 and Table VI-26 show, Nissan applies more technology than Daimler in the less stringent alternatives and significantly more technology with increasing stringency.  The Euro-style Sprinter vans that comprise all of Daimler's model offerings in this segment put Daimler in a favorable position.  However, those vans are already advanced  -  containing downsized diesel engines and advanced aerodynamic profiles.  Much like the Ford Transit vans, the recent improvements to the Sprinter vans occurred outside the scope of the compliance modeling so the costs of the improvements are not captured in the analysis.
Although Daimler's required fuel economy level is much higher than Nissan's (in miles per gallon), Nissan starts from a much weaker position than Daimler and must incorporate additional engine, transmission, platform-level technologies (e.g. mass reduction and aerodynamic improvements) in order to achieve compliance.  In fact, more than 25 percent of Nissan's van offerings are projected to contain integrated starter generators by 2030 in Alternative 5.  
While the agencies do not allow sales volumes for any manufacturer (or model) to vary across regulatory alternatives in the analysis, it is conceivable that under the most stringent alternatives individual manufacturers could lose market share to their competitors if the prices of their new vehicles rise more than the industry average without compensating fuel savings and/or changes to other features.  
         Estimated Consumer Impacts with Respect to HD Pickups and Vans Using Method A
The consumer impacts of the proposed rule are more straightforward. Table VI-27 shows the impact on the average consumer who buys a new class 2b or 3 vehicle in model year 2030 using the worst case assumption that manufacturers pass through the entire cost of technology to the purchaser.  (All dollar values are discounted at a rate of 7 percent per year from the time of purchase, except the average price increase, which occurs at the time of purchase).  The additional costs associated with increases in taxes, registration fees, and financing costs are also captured in the table.
Table VI-27 Summary of Individual Consumer Impacts in MY 2030 in the HD Pickup and Van Market Segment using Method A and versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase Increases
                                    2.0%/y
                                    2.5%/y
                                    3.5%/y
                                    4.0%/y
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
           Value of Lifetime Fuel Savings (discounted 2012 dollars)
Pretax
                                     2,068
                                     3,924
                                     4,180
                                     4,676
Tax
                                      210
                                      409
                                      438
                                      491
Total
                                     2,278
                                     4,334
                                     4,618
                                     5,168
                  Economic Benefits (discounted 2012 dollars)
Mobility Benefit
                                      244
                                      437
                                      472
                                      525
Avoided Refueling Time
                                      86
                                      164
                                      172
                                      193
               New Vehicle Purchase (vs. No-Action Alternative)
Avg.  Price Increase ($)
                                      578
                                     1,348
                                     1,655
                                     2,080
Avg. Payback (years)
                                      2.5
                                       3
                                      3.4
                                      3.9
Additional costs ($)
                                      120
                                      280
                                      344
                                      432
                 Net Lifetime Consumer Benefits (discounted $)
Total Net Benefits
                                     1,910
                                     3,307
                                     3,263
                                     3,374
        [*]All dollar values are discounted at a rate of 7 percent per year from the time of purchase, except the average price increase, which occurs at the time of purchase).  

As expected, a consumer's lifetime fuel savings increase monotonically across the alternatives.  The mobility benefit in Table VI-27 refers to the value of additional miles that an individual consumer travels as a result of reduced per-mile travel costs.  The additional miles result in additional fuel consumption and represent foregone fuel savings, but are valued by consumers at the cost of the additional fuel plus the consumer surplus (a measure of the increase in welfare that consumers achieve by having more mobility).  The refueling benefit measures the value of time saved through reduced refueling events, the result of improved fuel economy and range in vehicles that have been modified in response to the standards.  
There are some limitations to using payback period as a measure, as it accounts for fuel expenditures and incremental costs associated with taxes, registration fees and financing, and increased maintenance costs, but not the cost of potential repairs or replacements, which may or may not be more expensive with more advanced technology.   
Overall, the average consumer is likely to see discounted lifetime benefits that are multiples of the price increases faced when purchasing the new vehicle in MY 2030 (or the few model years preceding 2030).  In particular, the net present value of future benefits at the time of purchase are estimated to be 3.5, 3.0, 2.2, and 1.8 times the price increase of the average new MY2030 vehicle for Alternatives 2  -  5, respectively. As Table VI-27 illustrates, the preferred alternative has the highest ratio of discounted future consumer benefits to consumer costs.
         Estimated Social and Environmental Impacts for HD Pickups and Vans
Social benefits increase with the increasing stringency of the alternatives.  As in the consumer analysis, the net benefits continue to increase with increasing stringency  -  suggesting that benefits are still increasing faster than costs for even the most stringent alternative.  
Table VI-28 Summary of Total Social Costs and Benefits Through MY2029 in the HD Pickup and Van Market Segment using Method A and versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                     2.0%
                                     2.5%
                                     3.5%
                                     4.0%
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
                           Fuel Purchases ($billion)
Pretax Savings
                                      9.6
                                     15.9
                                     19.1
                                     22.2
                         Fuel Externalities ($billion)
Energy Security
                                      0.5
                                      0.9
                                      1.1
                                      1.3
CO2 emissions[a]
                                      1.9
                                      3.2
                                      3.8
                                      4.4
                     VMT-Related Externalities ($billion)
Driving Surplus
                                      1.1
                                      1.8
                                      2.1
                                      2.4
Refueling Surplus
                                      0.4
                                      0.7
                                      0.8
                                      0.9
Congestion
                                     -0.2
                                     -0.4
                                     -0.4
                                     -0.5
Accidents
                                     -0.1
                                     -0.2
                                     -0.2
                                     -0.3
Noise
                                       0
                                       0
                                       0
                                       0
Fatalities
                                      0.1
                                     -0.2
                                     -0.2
                                     -0.5
Criteria Emissions
                                      0.6
                                      1.1
                                      1.3
                                      1.6
                   Technology Costs vs. No-Action ($billion)
Incremental Cost
                                      2.5
                                      5.0
                                      7.2
                                      9.7
Additional Costs
                                      0.5
                                      1.0
                                      1.5
                                      2.0
                        Benefit Cost Summary ($billion)
Total Social Cost
                                      3.3
                                      6.8
                                      9.5
                                     13.0
Total Social Benefit
                                     13.9
                                     22.7
                                     27.4
                                     31.7
Net Social Benefit
                                     10.6
                                     15.9
                                     17.9
                                     18.7
          [*]All dollar values are discounted at a rate of 3 percent per year from the time of purchase.  
          [a] Using the 3% average social cost of CO2 value. There are four distinct social cost of CO2 values presented in the Technical Support Document: Social Cost of Carbon for Regulatory Impact Analysis under Executive Order 12866 (2010 and 2013). The CO2 emissions presented here would be valued lower with one of those other three values and higher at the other two values.
Table VI-28 provides a summary of benefits and costs, cumulative from MY2015  -  MY2029 (although the early years of the series typically have no incremental costs and benefits over the baseline), for each alternative.  In the social perspective, fuel savings are considered net of fuel taxes, which are a transfer from purchasers of fuel to society at large.  The energy security component represents the risk premium associated with exposure to oil price spikes and the economic consequences of adapting to them.  This externality is monetized on a per-gallon basis, just as the social cost of carbon is used in this analysis.  Just as the previous two externalities are caused by fuel consumption, others are caused by travel itself.  The additional VMT resulting from the increase in travel demand that occurs when the price of driving decreases (i.e. the rebound effect), not only leads to increased mobility (which is a benefit to drivers), but also to increases in congestion, noise, accidents, and per-mile emissions of criteria pollutants like carbon monoxide and diesel particulates.  Although increases in VMT lead to increases in tailpipe emissions of criteria pollutants, the proposed regulations decrease overall consumption enough that the emissions reductions associated with the remainder of the fuel cycle (extraction, refining, transportation and distribution) are large enough to create a net reduction in the emissions of criteria pollutants (shown below in Table VI-29 and VI-30).  A full presentation of the costs and benefits, and the considerations that have gone into each cost and benefit category -- such as how energy security premiums were developed, how the social costs of carbon and co-pollutant benefits were developed, etc. -- is presented in Section IX of this preamble and in Chapters 7 and 8 of the draft RIA for each regulated segment (engines, HD pickups and vans, vocational vehicles, tractors and trailers). 
Another side effect of increased VMT is the likely increase in traffic fatalities, which is a function of the total vehicle travel in each year.  As Table VI-28 illustrates, the positive social cost associated with traffic fatalities is the result of an additional -10 (implying that Alternative 2 actually leads to a reduction in fatalities over the baseline, due to the application of mass reduction technologies), 35, 36, and 66 fatalities for Alternatives 2-5, respectively.  To put those numbers in context, the baseline contains nearly 25,000 fatalities attributable to 2b/3 vehicles over the same period.  The incremental fatalities associated with the alternatives translate to less than -0.4, 0.1, 0.1, and 0.3 percent increases over the MY2015-2029 baseline, respectively. 
One notable facet of Table VI-28  is that while consumer benefits are also social benefits, the external portions of the net benefits to society (composed of reductions in CO2 emissions, improved energy security, congestion, accidents, noise, and criteria pollutant emissions) are smaller than the total technology cost in each alternative -- at least when valuing CO2 emissions using the 3 percent average SCC value and not including the value of other GHGs being reduced.  In the case of the more stringent alternatives, they sum to only about half the technology cost, whereas pretax fuel savings, alone, are considerably greater than technology costs for each regulatory alternative.  Therefore, while any of the regulatory alternatives considered today would be cost-beneficial considering all the benefits and costs, none would be cost-beneficial considering only economic and environmental externalities.
The CAFE model was used to estimate the emissions impacts of the various alternatives that are the result of lower fuel consumption, but increased vehicle miles traveled for vehicle produced in model years subject to the standards in the alternatives. Criteria pollutants are largely the result of vehicle use, and accrue on a per-mile-of-travel basis, but the alternatives still generally lead to emissions reductions.  Although vehicle use increases under each of the alternatives, upstream emissions associated with fuel refining, transportation and distribution are reduced for each gallon of fuel saved and that savings is larger than the incremental increase in emissions associated with increased travel.  The net of the two factors is a savings of criteria (and other) pollutant emissions.
Table VI-29 Summary of Environmental Impacts Through MY2029 in the HD Pickup and Van Market Segment, using Method A and versus the Dynamic Baseline, Alternative 1b
Alternative
                                       2
                                       3
                                       4
                                       5
Annual Stringency Increase
                                     2.0%
                                     2.5%
                                     3.5%
                                     4.0%
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
              Greenhouse Gas Emissions  vs. No-Action Alternative
CO2 (MMT)
                                      54
                                      91
                                      110
                                      127
CH4 and N2O (tons)
                                    65,600
                                    111,400
                                    133,700
                                    155,300
               Other Emissions vs. No-Action Alternative (tons)
CO
                                    10,400
                                    20,700
                                    25,800
                                    30,400
VOC and NOx
                                    23,800
                                    43,600
                                    53,500
                                    62,200
PM
                                     1,470
                                     2,550
                                     3,090
                                     3,590
SO2
                                    11,400
                                    19,900
                                    24,100
                                    28,000
Air Toxics
                                      44
                                      47
                                      49
                                      55
Diesel PM10
                                     2,470
                                     4,350
                                     5,300
                                     6,160
            Other Emissions vs. No-Action Alternative (% reduction)
CO
                                      0.1
                                      0.3
                                      0.4
                                      0.4
VOC and NOx
                                      1.1
                                      2.1
                                      2.6
                                      3.0
PM
                                      1.7
                                      3.0
                                      3.6
                                      4.2
SO2
                                      2.9
                                      5.1
                                      6.2
                                      7.2
Air Toxics
                                      0.1
                                      0.1
                                      0.1
                                      0.2
Diesel PM10
                                      2.7
                                      4.8
                                      5.9
                                      6.8
In addition to comparing environmental impacts of the alternatives against a dynamic baseline that shows some improvement over time, compared to today's fleet, even in the absence of the alternatives, the environmental impacts from the Method A analysis were compared against a flat baseline.  This other comparison is summarized below, but both comparisons are discussed in greater detail in the Draft EIS.
Table VI-30 Summary of Environmental Impacts Through MY2029 in the HD Pickup and Van Market Segment, using Method A and versus the Flat Baseline, Alternative 1a
                                  Alternative
                                       2
                                       3
                                       4
                                       5
                          Annual Stringency Increase
                                     2.0%
                                     2.5%
                                     3.5%
                                     4.0%
Stringency Increase Through MY
                                     2025
                                     2027
                                     2025
                                     2025
              Greenhouse Gas Emissions  vs. No-Action Alternative
CO2 (MMT)
                                      66
                                      105
                                      127
                                      142
CH4 and N2O (tons)
                                    79,700
                                    127,400
                                    154,800
                                    172,800
               Other Emissions vs. No-Action Alternative (tons)
CO
                                    11,630
                                    22,160
                                    28,030
                                    32,370
VOC and NOx
                                    28,280
                                    48,770
                                    60,180
                                    68,050
PM
                                     1,780
                                     2,900
                                     3,550
                                     3,980
SO2
                                    13,780
                                    22,580
                                    27,660
                                    31,020
Air Toxics
                                      60
                                      65
                                      72
                                      73
Diesel PM10
                                     2,980
                                     4,930
                                     6,060
                                     6,810
            Other Emissions vs. No-Action Alternative (% reduction)
CO
                                      0.2
                                      0.3
                                      0.4
                                      0.4
VOC and NOx
                                      1.4
                                      2.3
                                      2.9
                                      3.3
PM
                                      2.1
                                      3.4
                                      4.2
                                      4.7
SO2
                                      3.5
                                      5.7
                                      7.0
                                      7.9
Air Toxics
                                      0.2
                                      0.2
                                      0.2
                                      0.2
Diesel PM10
                                      3.3
                                      5.4
                                      6.7
                                      7.5
 
Sensitivity Analysis to Different Inputs to the DOT CAFE Model
This section describes some of the principal sensitivity results, obtained by running the various scenarios describing the policy alternatives with alternative inputs.  OMB Circular A-4 indicates that "it is usually necessary to provide a sensitivity analysis to reveal whether, and to what extent, the results of the analysis are sensitive to plausible changes in the main assumptions and numeric inputs."  Considering this guidance, a number of sensitivity analyses were performed using analysis Method A to examine important assumptions and inputs, including the following, all of which are discussed in greater detail in the accompanying RIA:
   1. Payback Period:  In addition to the 0 and 6 month payback periods discussed above (denoted pb-00_central  and pb-06_central in the tables below), also evaluated cases involving payback periods of 12, 18, and 24 months.
   2. Fuel Prices:  Evaluated cases involving fuel prices from the AEO 2014 low and high oil price scenarios. (See AEO-Low and AEO-High in the tables.)
   3. Fuel Prices and Payback Period:  Evaluated one side case involving a 0 month payback period combined with fuel prices from the AEO 2014 low oil price scenario, and one side case with a 24 month payback period combined with fuel prices from the AEO 2014 high oil price scenario.
   4. Benefits to Vehicle Buyers:  The main Method A analysis assumes there is no loss in value to consumers resulting from vehicles that have an increase in price and higher fuel economy.  NHTSA performed this sensitivity analysis assuming that there is a 25, or 50 percent loss in value to consumers  -  equivalent to the assumption that consumers will only value the calculated benefits they will achieve at 75, or 50 percent, respectively, of the main analysis estimates. (These are labeled as 75pctConsumerBenefit and 50pctConsumerBenefit.)
   5. Value of Avoided GHG Emissions:  Evaluated side cases involving lower and higher valuation of avoided CO2 emissions, expressed as the social cost of carbon (SCC).  A side case involving valuation of methane (CH4) and nitrous oxide (N2O) emissions was also evaluated.
   6. Rebound Effect:  Evaluated side cases involving rebound effect values of 5 percent, 15 percent, and 20 percent. (These are labeled as 05PctReboundEffect, 15PctReboundEffect and  20PctReboundEffect.)
   7. RPE-based Markup:  Evaluated a side case using a retail price equivalent (RPE) markup factor of 1.5 for non-electrification technologies, which is consistent with the NAS estimation for technologies manufactured by suppliers, and a RPE markup factor of 1.33 for electrification technologies (mild and strong HEV).
   8. ICM-based Post-Warranty Repair Costs:  NHTSA evaluated a side case that scaled the frequency of repair by vehicle survival rates, assumes that per-vehicle repair costs during the post-warranty period are the same as in the in-warranty period, and that repair costs are proportional to incremental direct costs (therefore vehicles with additional components will have increased repair costs).
   9. Mass-Safety Effect:  Evaluated side cases with the mass-safety impact coefficient at the values defining the 5[th] and 95[th] percent points of the confidence interval estimated in the underlying statistical analysis. (These are labeled MassFatalityCoeff05pct and MassFatalityCoeff95pct.)
   10. Strong HEVs:  Evaluated a side case in which strong HEVs were excluded from the set of technology estimated to be available for HD pickups and vans through model year 2030.
   11. Diesel Downsizing:  Evaluated a side case in which downsizing of diesel engines was estimated to be more widely available to HD pickups and vans.
   12. Technology Effectiveness:  Evaluated side cases involving inputs reflecting lower and higher impacts of technologies on fuel consumption.
   13. Technology Direct Costs:  Evaluated side cases involving inputs reflecting lower and higher direct incremental costs for fuel-saving technologies.
   14. Fleet Mix:  Evaluated a side case in which the shares of individual vehicle models and configurations were kept constant at estimated current levels.
Table VI-31Table VI-31 below, summarizes key results for each of the cases included in the sensitivity analysis using Method A for the proposed alternative.  The table reflects the changes in the metrics (columns) due to the particular sensitivity case (rows) for the proposed alternative 3. The last year of the analysis, 2030, is shown to highlight the movement of outcomes. More detailed results for all alternatives are available in the accompanying RIA Chapter 10.


Table VI-31 Sensitivity Analysis Results from CAFE Model in the HD Pickup and Van Market Segment using Method A and versus the Dynamic Baseline, Alternative 1b (2.5 % growth in stringency: Cells are percent change from base case)
Sensitivity Case
                       Average Achieved Fuel Consumption
                            Total Fuel Consumption
                                 C02 Reduction
                              Total Social Costs
                             Total Social Benefits
                              Social Net Benefits
pb-06_central
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    206.1%
                                     7.7%
                                     6.2%
pb-00_central
                                    -15.0%
                                    -13.7%
                                     13.6%
                                    247.1%
                                     8.4%
                                     7.0%
50pctConsumerBenefit
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    206.1%
                                     6.4%
                                     4.5%
75pctConsumerBenefit
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    206.1%
                                     7.1%
                                     5.5%
05PctReboundEffect
                                    -13.7%
                                    -13.2%
                                     13.0%
                                    206.1%
                                     8.0%
                                     6.5%
15PctReboundEffect
                                    -13.7%
                                    -12.0%
                                     11.8%
                                    206.1%
                                     7.4%
                                     5.9%
20PctReboundEffect
                                    -13.7%
                                    -11.5%
                                     11.3%
                                    206.1%
                                     7.0%
                                     5.6%
MassFatalityCoeff05pct
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    206.1%
                                     7.7%
                                     6.2%
MassFatalityCoeff95pct
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    206.1%
                                     7.7%
                                     6.2%
07PctDiscountRate
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    188.2%
                                     8.1%
                                     6.5%
07PctDR_00Payback
                                    -15.0%
                                    -13.7%
                                     13.6%
                                    252.9%
                                     8.9%
                                     7.3%
AEO-Low
                                    -13.4%
                                    -12.7%
                                     12.5%
                                    219.0%
                                     6.9%
                                     5.2%
AEO-High
                                    -13.5%
                                    -12.0%
                                     11.8%
                                    172.7%
                                     8.0%
                                     6.8%
AEO-Low_00MonthPayback
                                    -14.7%
                                    -13.9%
                                     13.7%
                                    265.0%
                                     7.6%
                                     5.8%
AEO-High_24MonthPayback
                                     -6.8%
                                     -6.0%
                                     5.8%
                                     -5.5%
                                     3.8%
                                     2.9%
12MonthPayback
                                    -13.1%
                                    -12.0%
                                     11.8%
                                    185.1%
                                     7.3%
                                     5.8%
18MonthPayback
                                     -9.5%
                                     -8.7%
                                     8.6%
                                     91.2%
                                     5.2%
                                     3.9%
24MonthPayback
                                     -8.2%
                                     -7.5%
                                     7.4%
                                     47.8%
                                     4.5%
                                     3.3%
LowSCC
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    206.1%
                                     7.3%
                                     5.7%
LowSCC_00PayBack
                                    -15.0%
                                    -13.7%
                                     13.6%
                                    247.1%
                                     8.1%
                                     6.5%
HighSCC
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    206.1%
                                     7.9%
                                     6.5%
HighSCC_00PayBack
                                    -15.0%
                                    -13.7%
                                     13.6%
                                    247.1%
                                     8.7%
                                     7.3%
VeryHighSCC
                                    -13.7%
                                    -12.6%
                                     12.4%
                                    206.1%
                                     8.4%
                                     7.2%
VeryHighSCC_00PayBack
                                    -15.0%
                                    -13.7%
                                     13.6%
                                    247.1%
                                     9.3%
                                     8.0%
RPE-BasedMarkup
                                    -12.8%
                                    -11.7%
                                     11.7%
                                    327.4%
                                     7.5%
                                     5.4%
NoSHEVs
                                    -12.4%
                                    -11.4%
                                     11.3%
                                    288.8%
                                     7.2%
                                     5.3%
LowerEffectiveness
                                    -13.3%
                                    -12.2%
                                     12.0%
                                    187.6%
                                     7.5%
                                     5.2%
HigherEffectiveness
                                    -12.7%
                                    -11.7%
                                     11.5%
                                    128.5%
                                     7.0%
                                     6.0%
LowerDirectCosts
                                    -13.0%
                                    -11.9%
                                     11.9%
                                    330.4%
                                     7.6%
                                     5.8%
HigherDirectCosts
                                    -13.5%
                                    -12.5%
                                     12.3%
                                    226.5%
                                     7.7%
                                     4.9%
WiderDieselDownsizing
                                    -13.6%
                                    -12.5%
                                     12.4%
                                    178.8%
                                     7.7%
                                     6.3%
AllowGasToDiesel
                                    -15.3%
                                    -14.2%
                                     13.0%
                                    295.7%
                                     7.7%
                                     5.8%
AllowGasToDiesel_00Payback
                                    -16.7%
                                    -15.5%
                                     14.3%
                                    375.9%
                                     8.6%
                                     6.6%
flat_mix_after_2016
                                    -13.5%
                                    -12.4%
                                     12.2%
                                    216.9%
                                     7.7%
                                     6.1%

For some of the cases for which results are presented above, the sensitivity of results to changes in inputs is simple, direct, and easily observed.  For example, changes to valuation of avoided GHG emissions impact only this portion of the estimated economic benefits; manufacturers' responses and corresponding costs are not impacted.  Some other cases warrant closer consideration:
First, cases involving alternatives to the reference six-month payback period involve different degrees of fuel consumption improvement, and these differences are greatest in the no-action alternative defining the baseline.  Because all estimated impacts of the proposed standards are shown as incremental values relative to this baseline, longer payback periods correspond to smaller estimates of incremental impacts.
Second, cases involving different fuel prices similarly involve different degrees of fuel consumption improvement, with differences also being greatest for the no-action alternative.  Lower fuel prices correspond to larger estimates of incremental impacts, and higher fuel prices correspond to smaller estimates of incremental impacts.
Third, because the payback period and fuel price inputs work together (along with other inputs) to influence the degree of fuel consumption improvement, the two side cases involving changes to both payback period and fuel prices result in larger (for shorter payback periods combined with lower fuel prices) and smaller (for longer payback periods combined with higher fuel prices) estimates of incremental impacts.
Fourth, the cases involving different inputs defining the availability of some technologies do not impact equally the estimated impacts across all manufacturers.  Section C.8 above provides a discussion of a sensitivity analysis that excludes strong hybrids and includes the use of downsized turbocharged engine in vans currently equipped with large V-8 engines.  The modeling results for this analysis are provided in Section C.8 and in the table above. The no strong hybrid analysis shows that GM could comply with the proposed preferred Alternative 3 without strong hybrids based on the use of turbo downsizing on all of their HD gasoline vans.  Alternatively, when the analysis is modified to allow for wider application of diesel engines, strong HEV application for GM drops slightly (from 19% to 17%) in MY2030, average per-vehicle costs drop slightly (by about $50), but MY2030 additional penetration rates of diesel engines increase by about 10%.  Manufacturer-specific model results accompanying today's rule show the extent to which individual manufacturers' potential responses to the standards vary with these alternative assumptions regarding the availability and applicability of fuel-saving technologies.
Fifth, the case involving a static fleet mix involves market forecast changes that impact manufacturers' average requirements and potential responses under each regulatory alternative, including the no-action alternative.
Compliance and Flexibility for HD Pickup and Van Standards
Averaging, Banking, and Trading
The Phase 1 program established substantial flexibility in how manufacturers can choose to implement EPA and NHTSA standards while preserving the benefits for the environment and for energy consumption and security.  Primary among these flexibilities are the gradual phase-in schedule, and the corporate fleet average approach which encompasses averaging, banking and trading described below.  See Section IV.A. of the Phase 1 preamble (76 FR 57238) for additional discussion of the Phase 1 averaging, banking, and trading and Section IV.A (3) of the Phase 1 preamble (76 FR 57243) for a discussion of the credit calculation methodology.
Manufacturers in this category typically offer gasoline and diesel versions of HD pickup and van vehicle models.  The agencies established chassis-based Phase 1 standards that are equivalent in terms of stringency for gasoline and diesel vehicles and are proposing the same approach to stringency for Phase 2.  In Phase 1, the agencies established that HD pickups and vans are treated as one large averaging set that includes both gasoline and diesel vehicles and the agencies are proposing to maintain this averaging set approach for Phase 2.
As explained in Section II.C(3) of the Phase 1 preamble (76 FR 57167), and in Section VI.B (3) above, the program is structured so that final compliance is determined at the end of each model year, when production for the model year is complete.  At that point, each manufacturer calculates production-weighted fleet average CO2 emission and fuel consumption rates along with its production-weighted fleet average standard.  Under this approach, a manufacturer's HD pickup and van fleet that achieves a fleet average CO2 or fuel consumption level better than its standard would be allowed to generate credits.  Conversely, if the fleet average CO2 or fuel consumption level does not meet its standard, the fleet would incur debits (also referred to as a shortfall).  
A manufacturer whose fleet generates credits in a given model year will have several options for using those credits to offset emissions from other HD pickups and vans. These options include credit carry-back, credit carry-forward, and credit trading within the HD pickup and van averaging set.  These types of credit provisions also exist in the light-duty 2012-2016 and 2017-2025 MY vehicle rules, as well as many other mobile source standards issued by EPA under the CAA.  The manufacturer will be able to carry back credits to offset a deficit that had accrued in a prior model year and was subsequently carried over to the current model year, with a limitation on the carry-back of credits to three model years.  After satisfying any need to offset pre-existing deficits, a manufacturer may bank remaining credits for use in future years, with a limitation on the carry-forward of credits to five model years.  Averaging vehicle credits with engine credits or between vehicle weight classes is not allowed, as discussed in Section I.  The agencies are not proposing changes to any of these provisions for the Phase 2 program.  
While the agencies are proposing to retain 5 year carry-forward of credits for all HD sectors, the agencies request comment on the merits of a temporary credit carry-forward period of longer than 5 years for HD pick-ups and vans, allowing Phase 1 credits generated in MYs 2014-2019 to be used through MY 2027.  EPA included a similar provision in the MY 2017-2025 light-duty vehicle rule, which allows a one-time credit carry-forward of  MY 2010-2015 credits to be carried forward through MY 2021.  Such a credit carry-forward extension for HD pick-ups and vans may provide manufacturers with additional flexibility during the transition to the proposed Phase 2 standards.  A temporary credit carry-forward period of longer than five years for Phase 1 credits may help manufacturers resolve lead-time issues they might face as the proposed more stringent Phase 2 standards phase-in and help avoid negative impacts to their product redesign cycles which tend to be longer than those for light-duty vehicles.
As discussed in Section VI.B.4., EPA is proposing to change the HD pickup and van useful life for GHG emissions from the current 11 years/120,000 miles to 15 years/150,000 miles to make the useful life for GHG emissions consistent with the useful life of criteria pollutants recently updated in the Tier 3 rule.  As shown in the Equation VI-1 credits calculation formula below, established by the Phase 1 rule, useful life in miles is a multiplicative factor included in the calculation of CO2 and fuel consumption credits.  In order to ensure banked credits maintain their value in the transition from Phase 1 to Phase 2, NHTSA and EPA propose an adjustment factor of 1.25 for credits that are carried forward from Phase 1 to the MY 2021 and later Phase 2 standards.  Without this adjustment factor the proposed change in useful life would effectively result in a discount of banked credits that are carried forward from Phase 1 to Phase 2, which is not the intent of the change in the useful life.  The agencies do not believe that this proposed adjustment results in a loss of program benefits because there is little or no deterioration anticipated for CO2 emissions and fuel consumption over the life of the vehicles.  Also, as described in the standards and feasibility sections above, the carry-forward of credits is an integral part of the program, helping to smoothing the transition to the new Phase 2 standards.  The agencies believe that effectively discounting carry-forward credits from Phase 1 to Phase 2 would be unnecessary and could negatively impact the feasibility of the proposed Phase 2 standards.  EPA and NHTSA request comment on all aspects of the averaging, banking, and trading program.
Equation VI-1: Total Model Year Credit (Debit) Calculation
CO2 Credits (Mg) = [(CO2 Std  -  CO2 Act) x Volume x UL] / 1,000,000
Fuel Consumption Credits (gallons) = (FC Std  -  FC Act) x Volume x UL x 100 
Where: 
CO2 Std = Fleet average CO2 standard (g/mi) 
FC Std = Fleet average fuel consumption standard (gal/100 mile) 
CO2 Act = Fleet average actual CO2 value (g/mi) 
FC Act = Fleet average actual fuel consumption value (gal/100 mile) 
Volume = the total production of vehicles in the regulatory category 
UL = the useful life for the regulatory category (miles)
 
Advanced Technology Credits
The Phase 1 program included on an interim basis advanced technology credits for MYs 2014 and later in the form of a multiplier of 1.5 for the following technologies: 
         * Hybrid powertrain designs that include energy storage systems
         * Waste heat recovery
         * All-electric vehicles
         * Fuel cell vehicles 
The advanced technology credit program is intended to encourage early development of technologies that are not yet commercially available.  This multiplier approach means that each advanced technology vehicle would count as 1.5 vehicles in a manufacturer's compliance calculation.  A manufacturer also has the option to subtract these vehicles out of its fleet and determine their performance as a separate fleet calculating advanced technology credits that can be used for all other HD vehicle categories, but these credits would, of course, not then be reflected in the manufacturer's conventional pickup and van category credit balance.  The credits are thus `special' in that they can be applied across the entire heavy-duty sector, unlike the ABT and early credits discussed above and the proposed off-cycle technology credits discussed in the following subsection.  The agencies also capped the amount of advanced credits that can be transferred into any averaging set into any model year at 60,000 Mg to prevent market distortions.
	The advanced technology multipliers were included on an interim basis in the Phase 1 program and the agencies are proposing to end the incentive multipliers beginning in MY 2021, when the more stringent Phase 2 standards are proposed to begin phase-in.  The agencies are proposing a similar approach for the other HD sectors as discussed in Section I.C. (1).  The advanced technology incentives are intended to promote the commercialization of technologies that have the potential to provide substantially better GHG emissions and fuel consumption if they were able to overcome major near-term market barriers.  However, the incentives are not intended to be a permanent part of the program as they result in a decrease in overall GHG emissions and fuel consumption benefits associated with the program when used.  More importantly, as explained in Section I. above, the agencies are already predicating the stringency of the proposed standards on development and deployment of two of these Phase 1 advanced technologies (waste heat recovery and strong hybrid technology), so that it would be inappropriate (and essentially a windfall) to include credits for use of these technologies in Phase 2.  
	As discussed in Section I, the agencies request comment on the proposed approach for the advanced technology multipliers for HD pickups and vans as well as the other HD sectors, including comments on whether or not the credits should be extended to later model years for more advanced technologies such as EVs and fuel cell vehicles.  These technologies are not projected to be part of the technology path used by manufacturer to meet the proposed Phase 2 standards for HD pickups and vans. Waste heat recovery is also not projected to be used for HD pickups and vans in the time frame of the proposed rule.  EV and fuel cell technologies would presumably need to overcome the highest hurdles to commercialization for HD pickups and vans in the time frame of the proposed rule, and also have the potential to provide the highest level of benefit.  We welcome comments on the need for such incentives, including information on why an incentive for specific technologies in this time frame may be warranted, recognizing that the incentive would result in reduced benefits in terms of CO2 emissions and fuel use due to the Phase 2 program. 
NHTSA and EPA established that for Phase 1, EVs and other zero tailpipe emission vehicles be factored into the fleet average GHG and fuel consumption calculations based on the diesel standards targets for their model year and work factor.  The agencies also established for electric and zero emission vehicles that in the credits equation the actual emissions and fuel consumption performance be set to zero (i.e. that emissions be considered on a tailpipe basis exclusively) rather than including upstream emissions or energy consumption associated with electricity generation.  As we look to the future, we are not projecting the adoption of electric HD pickups and vans into the market; therefore, we believe that this provision is still appropriate.  Unlike the MY2012-2016 light-duty rule, which adopted a cap whereby upstream emissions would be counted after a certain volume of sales (see 75 FR 25434-25436), we believe there is no need to propose a cap for HD pickups and vans because of the infrequent projected use of EV technologies in the Phase 2 timeframe.  In Phase 2, we propose to continue to deem electric vehicles as having zero CO2, CH4, and N2O emissions as well as zero fuel consumption.  We welcome comments on this approach.  See also Section I for a discussion of the treatment of lifecycle emissions for alternative fuel vehicles and Section XI for the treatment of lifecycle emissions for natural gas specifically.
Off-cycle Technology Credits
The Phase 1 program established an opportunity for manufacturers to generate credits by applying innovative technologies whose CO2 and fuel consumption benefits are not captured on the 2-cycle test procedure (i.e., off-cycle).  As discussed in Sections III.F. and V.E.3., the agencies are proposing approaches for Phase 2 off-cycle technology credits for tractors and vocational vehicles with proposed provisions tailored for those sectors.  For HD pickups and vans, the approach for off-cycle technologies established in Phase 1 is similar to that established for light-duty vehicles due to the use of the same basic chassis test procedures.  The agencies are proposing to retain this approach for Phase 2.  To generate credits, manufacturers are required to submit data and a methodology for determining the level of credits for the off-cycle technology subject to EPA and NHTSA review and approval.  The application for off-cycle technology credits is also subject to a public evaluation process and comment period.  EPA and NHTSA would approve the methodology and credits only if certain criteria were met.  Baseline emissions and fuel consumption and control emissions and fuel consumption need to be clearly demonstrated over a wide range of real world driving conditions and over a sufficient number of vehicles to address issues of uncertainty with the data.  Data must be on a vehicle model-specific basis unless a manufacturer demonstrated model-specific data were not necessary.  Once a complete application is submitted by the manufacturer, the regulations require that the agencies publish a notice of availability in the Federal Register notifying the public of a manufacturer's proposed off-cycle credit calculation methodology and provide opportunity for comment.  
As noted above, the approach finalized for HD pickups and vans paralleled provisions for off-cycle credits in the MY 2012-2016 light-duty vehicle GHG program.  In the MY 2017-2025 light-duty vehicle program, EPA revised the off-cycle credits program for light-duty vehicles to streamline the credits process.  In addition to the process established in the MY 2012-2016 rule, EPA added a list or "menu" of pre-approved off-cycle technologies and associated credit levels.  Manufacturers may use the pre-defined off-cycle technology menu to generate light-duty vehicle credits by demonstrating at time of certification that the vehicles are equipped with the technology without providing additional test data.  Different levels of credits are provided for cars and light trucks in the light-duty program.  NHTSA also included these credits in the CAFE program (in gallons/mile equivalent) starting with MY 2017.  The list of pre-approved off-cycle technologies for light-duty vehicles is shown below.
Table VI-32 Pre-Approved Off-Cycle Technologies for Light-Duty Vehicles      
                           Pre-approved technologies
High Efficiency Exterior Lighting (at 100W)
Waste Heat Recovery (at 100W; scalable)
Solar Roof Panels (for 75 W, battery charging only)
Solar Roof Panels (for 75 W, active cabin ventilation plus battery charging)
Active Aerodynamic Improvements (scalable)
Engine Idle Start-Stop w/ heater circulation system
Engine Idle Start-Stop without/ heater circulation system
Active Transmission Warm-Up
Active Engine Warm-Up
Solar/Thermal Control
  
The agencies initially note that where vehicles are not chassis-certified, but rather evaluate compliance using the GEM simulation tool, with the proposed modifications to GEM, many more technologies (especially those related to engine and transmission improvements) will now be `on-cycle'  -  evaluated directly by the GEM compliance tool.  However, with respect to the proposed standards which would be chassis-certified  -  namely, the standards for heavy duty pickups and vans, the effectiveness of some technologies will be only partially captured (or not captured at all).  EPA and NHTSA are requesting comment on establishing a pre-defined technology menu list for HD pickups and vans.  The list for HD pickups and vans could include some or all of the technologies listed in Table VI-32.  As with the light-duty program, the pre-defined list may simplify the process for generating off-cycle credits and may further encourage the introduction of these technologies.  However, the appropriate default level of credits for the heavier vehicles would need to be established.  The agencies request comments with supporting HD pickup and van specific data and analysis that would provide a substantive basis for appropriate adjustments to the credits levels for the HD pickup and van category.  The data and analysis would need to demonstrate that the pre-defined credit level represents real-world emissions reductions and fuel consumption improvements not captured by the 2-cycle test procedures.  
As with the light-duty vehicle program, the agencies would also consider including a cap on credits generated from a pre-defined list established for HD pickups and vans.  The cap for the light-duty vehicle program is 10 g/mile (and gallons/mi equivalent) applied on a manufacturer fleet-wide basis.  The 10 g/mile cap limits the total off-cycle credits allowed based on the pre-defined list across the manufacturer's light-duty vehicle fleet.  The agencies adopted the cap on credits to address issues of uncertainty regarding the level of credits automatically assigned to each technology.  Manufacturers able to demonstrate that a technology provides improvements beyond the menu credit level would be able to apply for additional credits through the individual demonstration process noted above.  Credits based on the individual manufacturer demonstration would not count against the credit cap. If a menu list of credits is developed to be included in the HD pickup and van program, a cap may also be appropriate depending on the technology list and credit levels. The agencies request comments on all aspects of the off-cycle credits program for HD trucks and vans.
Demonstrating Compliance for Heavy-duty Pickup Trucks and Vans
The Phase 1 rule established a comprehensive compliance program for HD pickups and vans that NHTSA and EPA are generally retaining for Phase 2.  The compliance provisions cover details regarding the implementation of the fleet average standards including vehicle certification, demonstrating compliance at the end of the model year, in-use standards and testing, carryover of certification test data, and reporting requirements.  Please see Section V.B (1) of the Phase 1 rule preamble (76 FR 57256-57263) for a detailed discussion of these provisions.
The Phase 1 rule contains special provisions regarding loose engines and optional chassis certification of certain vocational vehicles over 14,000 lbs. GVWR.  The agencies are proposing to extend the optional chassis certification provisions to Phase 2 and are not proposing to extend the loose engine provisions.  See the vocational vehicle Section V.E. and XIV.A.2 for a detailed discussion of the proposal for optional chassis certification and II.D. for the discussion of loose engines. 

Aggregate GHG, Fuel Consumption, and Climate Impacts
Given that the purpose of setting these Phase 2 standards is to reduce fuel consumption and greenhouse gas (GHG) emissions from heavy-duty vehicles, it is necessary for the agencies to analyze the extent to which the proposed standards would accomplish that purpose.  This section describes the agencies' methodologies for projecting the reductions in greenhouse gas (GHG) emissions and fuel consumption, and the methodologies the agencies used to quantify the impacts associated with the proposed standards, as well as the impacts of Alternative 4.  In addition, EPA's analyses of the projected change in atmospheric carbon dioxide (CO2) concentration and consequent climate change impacts are discussed.  Because of NHTSA's NEPA obligations, NHTSA further analyzes the projected environmental impacts related to fuel consumption, GHG emissions, and climate change resulting from its proposed rule and reasonable alternatives in Chapters 3 and 5 of its DEIS and refers the interested reader there for more information.
         What Methodologies Did the Agencies Use to Project GHG Emissions and Fuel Consumption Impacts?
 Different tools exist for estimating potential fuel consumption and GHG emissions impacts associated with fuel efficiency and GHG emissions standards.  One such tool is EPA's official mobile source emissions inventory model named Motor Vehicle Emissions Simulator (MOVES).  The agencies used the most current version of the model, MOVES2014, to quantify the impacts of the proposed standards on GHG emissions and fuel consumption.  MOVES was run with user input databases, described in more detail below, that reflected the projected technological improvements resulting from the proposed rules, such as the improvements in engine and vehicle efficiency, aerodynamic drag, and tire rolling resistance.
Another such tool is DOT's CAFE model, which estimates how manufacturers could potentially apply technology improvements in response to new standards, and then calculates, among other things, resultant changes in national fuel consumption and GHG emissions.  For today's analysis of potential new standards for HD pickups and vans, the model was reconfigured to use the work-based attribute metric of "work factor" established in the Phase 1 rule for heavy-duty pickups and vans instead of the light-duty "footprint" attribute metric.  The CAFE model takes user-specified inputs on, among other things, vehicles that will be produced in a given model year, technologies available to improve fuel efficiency on those vehicles, potential regulatory standards that would drive improvements in fuel efficiency, and economic assumptions.  The CAFE model takes every vehicle in each manufacturer's fleet and decides what technologies to add to those vehicles in order to allow each manufacturer to comply with the standards in the most cost-effective way.  Based on the resulting improved vehicle fleet, the CAFE model then calculates total fuel consumption and GHG emissions impacts based on those inputs, along with economic costs and benefits.  The DOT's CAFE model is further described in detail in Section VI.C of the preamble and Chapter 2 of the draft RIA.  
For this rule, the agencies conducted coordinated and complementary analyses by employing both DOT's CAFE model and EPA's MOVES model.  These models were used to project fuel consumption and GHG emissions impacts resulting from the proposed standards.  The agencies used EPA's MOVES model to estimate fuel consumption and emissions impacts for tractor-trailers (including the engines which power the vehicle), and vocational vehicles (including the engine which powers the vehicle).  For heavy-duty pickups and vans, the agencies performed complementary analyses using the CAFE model ("Method A") and the MOVES model ("Method B") to estimate fuel consumption and emissions from these vehicles.  For both methods, the agencies analyzed the impact of the proposed rules and Alternative 4, relative to two different reference cases  -  less dynamic and more dynamic.  The less dynamic baseline projects very little improvement in new vehicles in the absence of new Phase 2 standards.  In contrast, the more dynamic baseline projects more improvements in vehicle fuel efficiency.  The agencies considered both reference cases (for additional details, see Chapter 11 of the draft RIA).  The results for all of the regulatory alternatives relative to both reference cases, derived via the same methodologies discussed in this section, are presented in Section X of the preamble.    
For brevity, a subset of these analyses are presented in this section, and the reader is referred to both the RIA Chapter 11 and NHTSA's DEIS Chapters 3 and 5 for complete sets of these analyses.  In this section, Method A is presented for both the proposed standards (i.e., Alternative 3 -- the agencies' preferred alternative) and for the standards the agencies considered in Alternative 4, relative to both the more dynamic baseline (Alternative 1b) and the less dynamic baseline (Alternative 1a).  Method B is presented also for the proposed standards and Alternative 4, but relative only to the less dynamic baseline.  The agencies' intention for presenting both of these complementary and coordinated analyses is to offer interested readers the opportunity to compare the regulatory alternatives considered for Phase 2 in both the context of our HD Phase 1 analytical approaches and our light-duty vehicle analytical approaches.  The agencies view these analyses as corroborative and reinforcing: both support agencies' conclusion that the proposed standards are appropriate and at the maximum feasible levels.
Because reducing fuel consumption also affects emissions that occur as a result of fuel production and distribution (including renewable fuels), the agencies also calculated those "upstream" changes using the "downstream" fuel consumption reductions predicted by the CAFE model and the MOVES model.  As described in Section VI, Method A uses the CAFE model to estimate fuel consumption and emissions impacts for HD pickups and vans and to calculate upstream fuel consumption improvements as well.  Method B uses the same upstream tools originally created for the Renewable Fuel Standard 2 (RFS2) rulemaking analysis, used in the LD GHG rulemakings, HD GHG Phase 1, and updated for the current analysis.  The estimate of emissions associated with production and distribution of gasoline and diesel from crude oil is based on emission factors in the "Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation" model (GREET) developed by DOE's Argonne National Lab.  In some cases, the GREET values were modified or updated by the agencies to be consistent with the National Emission Inventory (NEI) and emission factors from MOVES.  For additional details, see Chapter 5 of the draft RIA.  The upstream tool used for the Method B can be found in the docket.  As noted in Section VI above, these analyses corroborate each other's results.  
The agencies analyzed the anticipated emissions impacts of the proposed rules and Alternative 4 on carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and hydrofluorocarbons (HFCs) for a number of calendar years (for purposes of the discussion in this proposed rule, only 2025, 2035 and 2050 will be shown) by comparing to both reference cases.  Additional runs were performed for just the three of the greenhouse gases (CO2, CH4, and N2O) and for fuel consumption for every calendar year from 2014 to 2050, inclusive, which fed the economy-wide modeling, monetized greenhouse gas benefits estimation, and climate impacts analyses, discussed in sections below.
         Analysis of Fuel Consumption and GHG Emissions Impacts Resulting from Proposed Standards and Alternative 4
The following sections describe the model inputs and assumptions for both the less dynamic and more dynamic reference cases and the control case representing the agencies' proposed fuel efficiency and GHG standards.  For additional details, see Chapter 5 of the draft RIA.  The details of all the MOVES runs, and input data tables can be found in the docket.   See Section VI.C for the discussion of the model inputs and assumptions for the analysis of the HD pickups and vans using DOT's CAFE Model.
Model Inputs and Assumptions for the Less Dynamic Reference Case
The less dynamic reference case (identified as Alternative 1a in Section X), includes the impact of Phase 1, but generally assumes that fuel efficiency and GHG emissions are not improved beyond the required 2018 model year levels.  Alternative 1a functions as one of the baselines against which the impacts of the proposed standards can be evaluated.  This case projects some improvements in the efficiency of the box trailers pulled by combination tractors due to increased penetration of aerodynamic technologies and low rolling resistance tires attributed to both EPA's SmartWay Transport Partnership and California Air Resources Board's Tractor-Trailer Greenhouse Gas regulation, as described in Section IV of the preamble.  For other HD vehicle sectors, no market-driven improvement in fuel efficiency was assumed.  For HD pickups and vans, the CAFE model was applied in a manner that assumes manufacturers would only add fuel-saving technology as needed to continue complying with Phase 1 standards.  MOVES2014 defaults were used for all other parameters to estimate the emissions inventories for this case.  The less dynamic reference case assumed the MOVES2014 default vehicle population and miles traveled estimates.  The growth in vehicle populations and miles traveled in MOVES2014 is based on the relative annual VMT growth from AEO2014 Early Release for model years 2012 and later.
Model Inputs and Assumptions for the More Dynamic Reference Case
The more dynamic reference case (identified as Alternative 1b in Section X), also includes the impact of Phase 1 and generally assumes that fuel efficiency and GHG emissions are not improved beyond the required 2018 model year levels.  However, for this case, the agencies assume market forces would lead to additional fuel efficiency improvements for HD pickups and vans and tractor-trailers.  These additional assumed improvements are described in Section X of the preamble.  No additional fuel efficiency improvements due to market forces were assumed for vocational vehicles.  For HD pickups and vans, the agencies applied the CAFE model using the input assumption that manufacturers having achieved compliance with Phase 1 standards would continue to apply technologies for which increased purchase costs would be "paid back" through corresponding fuel savings within the first six months of vehicle operation.  The agencies conducted the MOVES analysis of this case in the same manner as for the less dynamic reference case.
Model Inputs and Assumptions for "Control" Case
    Vocational Vehicles and Tractor-Trailers
The "control" case represents the agencies' proposed fuel efficiency and GHG standards.  The agencies developed additional user input data for MOVES runs to estimate the control case inventories.  The inputs to MOVES for the control case account for improvements of engine and vehicle efficiency in vocational vehicles and combination tractor-trailers.  The agencies used the percent reduction in aerodynamic drag and tire rolling resistance coefficients and absolute changes in average total running weight (gross combined weight) expected from the proposed rules to develop the road load inputs for the control case, based on the GEM analysis.  The agencies also used the percent reduction in CO2 emissions expected from the powertrain and other vehicle technologies not accounted for in the aerodynamic drag and tire rolling resistance in the proposed rules to develop energy inputs for the control case runs.  
Table VII-1 and Table VII-2 describe the proposed improvements in engine and vehicle efficiency from the proposed rules for vocational vehicles and combination tractor-trailers that were input into MOVES for estimating the control case emissions inventories.  Additional details regarding the MOVES inputs are included in the Chapter 5 of the draft RIA.
Table VII-1 Estimated Reductions in Energy Rates for the Proposed Standards
VEHICLE TYPE
FUEL
MODEL YEARS
REDUCTION FROM REFERENCE CASE
Long-haul Tractor-Trailers and HHD Vocational
Diesel
2018-2020
                                     1.3%


2021-2023
                                     5.2%


2024-2026
                                     9.7%


2027+
                                     10.4%
Short-haul Tractor-Trailers and HHD Vocational
Diesel
2018-2020
                                     0.9%


2021-2023
                                     5.0%


2024-2026
                                     9.5%


2027+
                                     10.4%
Single-Frame Vocational
Diesel and CNG

2021-2023
                                     5.3%


2024-2026
                                     8.9%


2027+
                                     13.3%

Gasoline

2021-2023
                                     3.3%


2024-2026
                                     5.4%


2027+
                                     10.3%


Table VII-2 Estimated Reductions in Road Load Factors for the Proposed Standards
VEHICLE TYPE
MODEL YEARS
               REDUCTION IN TIRE ROLLING RESISTANCE COEFFICIENT
                   REDUCTION IN AERODYNAMIC DRAG COEFFICIENT
                            WEIGHT REDUCTION (LB)i
Combination Long-haul Tractor-Trailers
2018-2020
                                     5.5%
                                     5.1%
                                     -131

2021-2023
                                     9.8%
                                     15.3%
                                     -199

2024-2026
                                     15.7%
                                     20.5%
                                     -246

2027+
                                     17.9%
                                     26.9%
                                     -304
Combination Short-haul Tractor-Trailers
2018-2020
                                     4.0%
                                     1.6%
                                      -41

2021-2023
                                     10.5%
                                     9.3%
                                      -79

2024-2026
                                     13.9%
                                     12.3%
                                     -100

2027+
                                     17.6%
                                     15.9%
                                     -127
Intercity Buses
2021-2023
                                     6.5%
                                      0%
                                       0

2024-2026
                                     9.2%
                                      0%
                                       0

2027+
                                     16.5%
                                      0%
                                       0
Transit Buses
2021-2023
                                      0%
                                      0%
                                       0

2024-2026
                                     2.9%
                                      0%
                                       0

2027+
                                     3.0%
                                      0%
                                       0
School Buses
2021-2023
                                      0%
                                      0%
                                       0

2024-2026
                                     2.9%
                                      0%
                                       0

2027+
                                     4.0%
                                      0%
                                       0
Refuse Trucks
2021-2023
                                      0%
                                      0%
                                      20

2024-2026
                                     2.9%
                                      0%
                                      20

2027+
                                     3.0%
                                      0%
                                      25
Single Unit Short-haul Trucks
2021-2023
                                     4.8%
                                      0%
                                      5.8

2024-2026
                                     8.3%
                                      0%
                                      5.8

2027+
                                     13.0%
                                      0%
                                       7
Single Unit Long-haul Trucks
2021-2023
                                     6.5%
                                      0%
                                      20

2024-2026
                                     9.2%
                                      0%
                                      20

2027+
                                     16.5%
                                      0%
                                      25
Motor Homes
2021-2023
                                     3.0%
                                      0%
                                       0

2024-2026
                                     6.2%
                                      0%
                                       0

2027+
                                     7.4%
                                      0%
                                       0
Note:	
i Negative weight reductions reflect an expected weight increase as a byproduct of other vehicle and engine improvements, as described in Chapter 5 of the draft RIA.
In addition, the proposed CO2 standard for tractors reflecting the use of auxiliary power units (APU) during extended idling, as discussed in Section III.D of the preamble, was included in the modeling for the long-haul combination tractor-trailers, as shown below in Table VII-3.

Table VII-3 Assumed APU Use during Extended Idling for Combination Long-haul Tractor-Trailers
VEHICLE TYPE
MODEL YEAR
                              APU PENETRATION[i]
Combination Long-Haul Trucks
2010-2020
                                      30%

2021-2023
                                      80%

2024+
                                      90%
              Note:
              [i] The assumed APU penetration remains constant for model years 2024 and later.
To account for the potential increase in vehicle use expected to result from improvements in fuel efficiency for vocational vehicles and combination tractor-trailers due to the proposed rules (also known as the "rebound effect" and described in more detail in Chapter 5 of the draft RIA), the control case assumed an increase in VMT from the reference levels by 1.83 percent for the vocational vehicles and 0.79 percent for the combination tractor-trailers.
    Heavy-Duty Pickups and Vans
As explained above and as also discussed in the draft RIA, the agencies used both DOT's CAFE model and EPA's MOVES model, for Method A and B, respectively, to project fuel consumption and GHG emissions impacts resulting from the proposed standards for HD pickups and vans, including downstream vehicular emissions as well as emissions from upstream processes related to fuel production, distribution, and delivery.  
Method A for HD Pickups and Vans
For Method A, the CAFE model calculated fuel consumption rates, then calculated vehicular CO2 emissions from the fuel consumption based on fuel properties (density and carbon content).   It also applies per-mile emission factors from MOVES to estimated VMT (for each regulatory alternative, adjusted to account for the rebound effect) in order to calculate vehicular CH4 and N2O emissions (as well, as discussed below, of non-GHG pollutants), and applies per-gallon upstream emission factors from GREET in order to calculate upstream GHG (and non-GHG) emissions.
As discussed above in Section VI, the proposed standards for HD pickups and vans -- that is, the functions defining fuel consumption and GHG targets that each depend work factor --  increase in stringency by 2.5 percent annually during model years 2021-2027.  The standards define targets specific to each vehicle model, but no vehicle is required to meet its target; instead, the production-weighted averages of the vehicle-specific targets define average fuel consumption and CO2 emission rates that a given manufacturer's overall fleet of produced vehicles is required to achieve.  The standards are specified separately for gasoline and diesel vehicles, and vary with work factor.  Work factors could change, and today's analysis assumes that some applications of mass reduction could enable increased work factor in cases where manufacturers could increase a vehicle's rated payload and/or towing capacity.  Therefore, average required levels will depend on the mix of vehicles and work factors of the vehicles produced for sale in the U.S., and since these can only be estimated at this time, average required and achieved fuel consumption and CO2 emission rates are subject to uncertainty.   Between today's notice and issuance of the ensuing final rule, the agencies intend to update the market forecast (and other inputs) used to analyze HD pickup and van standards, and expect that doing so will lead to different estimates of required and achieved fuel consumption and CO2 emission rates (as well as different estimates of impacts, costs, and benefits).
The following four tables present stringency increases and estimated required and achieved fuel consumption and CO2 emission rates for the two No Action Alternatives (Alternative 1a and 1b) and the proposed standards defining the Preferred Alternative.  Stringency increases are shown relative to standards applicable in model year 2018 (and through model year 2020).  As mathematical functions, the standards themselves are not subject to uncertainty.  By 2027, they are 16.2 percent more stringent (i.e., lower) than those applicable during 2018-2020.  The DOT's CAFE model estimates that, by model 2027, the proposed standards could reduce average required fuel consumption and CO2 emission rates to about 4.86 gallons/100 miles and about 458 grams/mile, respectively.  The model further estimates that average achieved fuel consumption and CO2 emission rates could correspondingly be reduced to about the same levels.  If, as represented by Alternative 1b, manufacturers would, even absent today's proposed standards, voluntarily make improvements that pay back within six months, these model year 2027 levels are about 13.5 percent lower than the agencies estimate could be achieved under the Phase 1 standards defining the No Action Alternative.  If, as represented by Alternative 1a, manufacturers would, absent today's proposed standards, only apply technology as required to achieve compliance, these model year 2027 levels are about 15 percent lower than the agencies estimate could be achieved under the Phase 1 standards.  As indicated below, the agencies estimate that these improvements in fuel consumption and CO2 emission rates would build from model year to model year, beginning as soon as model year 2017 (insofar as manufacturers may make anticipatory improvements if warranted given planned produce cadence).
Table VII-4 Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved Fuel Consumption Rates for Method A, Relative to Alternative 1b
                                  Model Year
                             Stringency (vs. 2018)
                    Ave. Required Fuel Cons. (gal./100 mi.)
                    Ave. Achieved Fuel Cons. (gal./100 mi.)
                                       
                                       
                                   No Action
                                   Proposed
                                   Reduction
                                   No Action
                                   Proposed
                                   Reduction
2014
                  MYs 2014-2020 Subject to Phase 1 Standards
                                     6.41 
                                     6.41 
                                     0.0%
                                     6.21 
                                     6.21 
                                     0.0%
2015
                                       
                                     6.41 
                                     6.41 
                                     0.0%
                                     6.12 
                                     6.12 
                                     0.0%
2016
                                       
                                     6.27 
                                     6.27 
                                     0.0%
                                     6.15 
                                     6.15 
                                     0.0%
2017
                                       
                                     6.11 
                                     6.11 
                                     0.0%
                                     5.89 
                                     5.88 
                                     0.2%
2018
                                       
                                     5.80 
                                     5.80 
                                     0.0%
                                     5.75 
                                     5.70 
                                     0.8%
2019
                                       
                                     5.78 
                                     5.78 
                                     0.0%
                                     5.72 
                                     5.68 
                                     0.7%
2020
                                       
                                     5.78 
                                     5.78 
                                     0.0%
                                     5.69 
                                     5.64 
                                     0.8%
2021
                                     2.5%
                                     5.77 
                                     5.64 
                                     2.2%
                                     5.63 
                                     5.42 
                                     3.8%
2022
                                     4.9%
                                     5.77 
                                     5.50 
                                     4.7%
                                     5.63 
                                     5.42 
                                     3.8%
2023
                                     7.3%
                                     5.77 
                                     5.38 
                                     6.8%
                                     5.63 
                                     5.28 
                                     6.3%
2024
                                     9.6%
                                     5.77 
                                     5.25 
                                     9.0%
                                     5.63 
                                     5.23 
                                     7.1%
2025
                                     11.9%
                                     5.77 
                                     5.12 
                                     11.4%
                                     5.63 
                                     4.99 
                                     11.5%
2026
                                     14.1%
                                     5.77 
                                     4.98 
                                     13.7%
                                     5.63 
                                     4.93 
                                     12.5%
2027
                                     16.2%
                                     5.77 
                                     4.86 
                                     15.8%
                                     5.62 
                                     4.86 
                                     13.7%
2028*
                                     16.2%
                                     5.77 
                                     4.86 
                                     15.8%
                                     5.62 
                                     4.86 
                                     13.7%
2029*
                                     16.2%
                                     5.77 
                                     4.86 
                                     15.8%
                                     5.62 
                                     4.85 
                                     13.7%
2030*
                                     16.2%
                                     5.77 
                                     4.86 
                                     15.8%
                                     5.62 
                                     4.85 
                                     13.7%
Note:
*Absent further action, standards assumed to continue unchanged after model year 2027.
Table VII-5 Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved CO2 Emission Rates for Method A, Relative to Alternative 1b
                                  Model Year
                             Stringency (vs. 2018)
                        Ave. Required CO2 Rate (g./mi.)
                        Ave. Achieved CO2 Rate (g./mi.)
                                       
                                       
                                   No Action
                                   Proposed
                                   Reduction
                                   No Action
                                   Proposed
                                   Reduction
2014
                  MYs 2014-2020 Subject to Phase 1 Standards
                                      602 
                                      602 
                                     0.0%
                                      581 
                                      581 
                                     0.0%
2015
                                       
                                      608 
                                      608 
                                     0.0%
                                      578 
                                      578 
                                     0.0%
2016
                                       
                                      593 
                                      593 
                                     0.0%
                                      580 
                                      580 
                                     0.0%
2017
                                       
                                      578 
                                      578 
                                     0.0%
                                      556 
                                      554 
                                     0.2%
2018
                                       
                                      548 
                                      548 
                                     0.0%
                                      543 
                                      538 
                                     0.8%
2019
                                       
                                      545 
                                      545 
                                     0.0%
                                      539 
                                      535 
                                     0.7%
2020
                                       
                                      545 
                                      545 
                                     0.0%
                                      536 
                                      532 
                                     0.8%
2021
                                     2.5%
                                      544 
                                      532 
                                     2.2%
                                      530 
                                      510 
                                     3.8%
2022
                                     4.9%
                                      544 
                                      519 
                                     4.7%
                                      530 
                                      510 
                                     3.8%
2023
                                     7.3%
                                      544 
                                      507 
                                     6.8%
                                      530 
                                      496 
                                     6.4%
2024
                                     9.6%
                                      544 
                                      495 
                                     9.1%
                                      530 
                                      492 
                                     7.2%
2025
                                     11.9%
                                      544 
                                      482 
                                     11.3%
                                      530 
                                      470 
                                     11.3%
2026
                                     14.1%
                                      544 
                                      470 
                                     13.6%
                                      530 
                                      465 
                                     12.3%
2027
                                     16.2%
                                      544 
                                      458 
                                     15.8%
                                      529 
                                      458 
                                     13.4%
2028*
                                     16.2%
                                      544 
                                      458 
                                     15.8%
                                      529 
                                      458 
                                     13.4%
2029*
                                     16.2%
                                      544 
                                      458 
                                     15.8%
                                      529 
                                      458 
                                     13.5%
2030*
                                     16.2%
                                      544 
                                      458 
                                     15.8%
                                      529 
                                      458 
                                     13.5%

Note:
*Absent further action, standards assumed to continue unchanged after model year 2027.
Table VII-6 Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved Fuel Consumption Rates for Method A, Relative to Alternative 1a
                                  Model Year
                             Stringency (vs. 2018)
                    Ave. Required Fuel Cons. (gal./100 mi.)
                    Ave. Achieved Fuel Cons. (gal./100 mi.)
                                       
                                       
                                   No Action
                                   Proposed
                                   Reduction
                                   No Action
                                   Proposed
                                   Reduction
2014
                  MYs 2014-2020 Subject to Phase 1 Standards
                                     6.41 
                                     6.41 
                                     0.0%
                                     6.21 
                                     6.21 
                                     0.0%
2015
                                       
                                     6.41 
                                     6.41 
                                     0.0%
                                     6.12 
                                     6.12 
                                     0.0%
2016
                                       
                                     6.27 
                                     6.27 
                                     0.0%
                                     6.15 
                                     6.15 
                                     0.0%
2017
                                       
                                     6.11 
                                     6.11 
                                     0.0%
                                     5.89 
                                     5.87 
                                     0.3%
2018
                                       
                                     5.80 
                                     5.80 
                                    -0.1%**
                                     5.75 
                                     5.70 
                                     0.9%
2019
                                       
                                     5.78 
                                     5.78 
                                     0.0%
                                     5.73 
                                     5.68 
                                     0.8%
2020
                                       
                                     5.78 
                                     5.78 
                                     0.0%
                                     5.73 
                                     5.68 
                                     0.8%
2021
                                     2.5%
                                     5.77 
                                     5.64 
                                     2.3%
                                     5.72 
                                     5.44 
                                     4.8%
2022
                                     4.9%
                                     5.77 
                                     5.50 
                                     4.7%
                                     5.72 
                                     5.44 
                                     4.8%
2023
                                     7.3%
                                     5.77 
                                     5.38 
                                     6.8%
                                     5.72 
                                     5.29 
                                     7.6%
2024
                                     9.6%
                                     5.77 
                                     5.25 
                                     9.1%
                                     5.72 
                                     5.23 
                                     8.5%
2025
                                     11.9%
                                     5.77 
                                     5.12 
                                     11.4%
                                     5.72 
                                     4.98 
                                     12.9%
2026
                                     14.1%
                                     5.77 
                                     4.98 
                                     13.7%
                                     5.72 
                                     4.94 
                                     13.6%
2027
                                     16.2%
                                     5.77 
                                     4.86 
                                     15.8%
                                     5.72 
                                     4.87 
                                     14.9%
2028*
                                     16.2%
                                     5.77 
                                     4.86 
                                     15.8%
                                     5.72 
                                     4.87 
                                     14.9%
2029*
                                     16.2%
                                     5.77 
                                     4.86 
                                     15.8%
                                     5.72 
                                     4.86 
                                     15.0%
2030*
                                     16.2%
                                     5.77 
                                     4.86 
                                     15.8%
                                     5.72 
                                     4.86 
                                     15.0%
Notes:
*Absent further action, standards assumed to continue unchanged after model year 2027.
**Increased work factor for some vehicles produces a slight increase in average required fuel consumption.

Table VII-7 Stringency of HD Pickup and Van Standards, Estimated Average Required and Achieved CO2 Emission Rates for Method A, Relative to Alternative 1a
                                  Model Year
                             Stringency (vs. 2018)
                        Ave. Required CO2 Rate (g./mi.)
                        Ave. Achieved CO2 Rate (g./mi.)
                                       
                                       
                                   No Action
                                   Proposed
                                   Reduction
                                   No Action
                                   Proposed
                                   Reduction
2014
                  MYs 2014-2020 Subject to Phase 1 Standards
                                      602 
                                      602 
                                     0.0%
                                      581 
                                      581 
                                     0.0%
2015
                                       
                                      608 
                                      608 
                                     0.0%
                                      578 
                                      578 
                                     0.0%
2016
                                       
                                      593 
                                      593 
                                     0.0%
                                      580 
                                      580 
                                     0.0%
2017
                                       
                                      578 
                                      578 
                                     0.0%
                                      556 
                                      554 
                                     0.3%
2018
                                       
                                      548 
                                      548 
                                    -0.1%**
                                      543 
                                      538 
                                     0.9%
2019
                                       
                                      545 
                                      546 
                                    -0.1%**
                                      539 
                                      535 
                                     0.8%
2020
                                       
                                      545 
                                      545 
                                    -0.1%**
                                      539 
                                      535 
                                     0.8%
2021
                                     2.5%
                                      544 
                                      532 
                                     2.2%
                                      538 
                                      512 
                                     4.9%
2022
                                     4.9%
                                      544 
                                      519 
                                     4.7%
                                      538 
                                      512 
                                     4.9%
2023
                                     7.3%
                                      544 
                                      507 
                                     6.8%
                                      538 
                                      497 
                                     7.7%
2024
                                     9.6%
                                      544 
                                      495 
                                     9.1%
                                      538 
                                      492 
                                     8.6%
2025
                                     11.9%
                                      544 
                                      482 
                                     11.4%
                                      538 
                                      470 
                                     12.7%
2026
                                     14.1%
                                      544 
                                      470 
                                     13.6%
                                      538 
                                      466 
                                     13.4%
2027
                                     16.2%
                                      544 
                                      458 
                                     15.8%
                                      538 
                                      459 
                                     14.7%
2028*
                                     16.2%
                                      544 
                                      458 
                                     15.8%
                                      538 
                                      459 
                                     14.7%
2029*
                                     16.2%
                                      544 
                                      458 
                                     15.8%
                                      538 
                                      459 
                                     14.8%
2030*
                                     16.2%
                                      544 
                                      458 
                                     15.8%
                                      538 
                                      459 
                                     14.8%
Notes:
*Absent further action, standards assumed to continue unchanged after model year 2027.
**Increased work factor for some vehicles produces a slight increase in the average required CO2 emission rate.
While the above tables show the agencies' estimates of average fuel consumption and CO2 emission rates manufacturers might achieve under today's proposed standards, total U.S. fuel consumption and GHG emissions from HD pickups and vans will also depend on how many of these vehicles are produced, and how they are operated over their useful lives.  Relevant to estimating these outcomes, the CAFE model applies vintage-specific estimates of vehicle survival and mileage accumulation, and adjusts the latter to account for the rebound effect.  This impact of the rebound effect is specific to each model year (and, underlying, to each vehicle model in each model year), varying with changes in achieved fuel consumption rates.   

Method B for HD Pickups and Vans

For Method B, the MOVES model was used to estimate fuel consumption and GHG emissions for HD pickups and vans.  MOVES evaluated the proposed standards for HD pickup trucks and vans in terms of grams of CO2 per mile or gallons of fuel per 100 miles.  Since nearly all HD pickup trucks and vans are certified on a chassis dynamometer, the CO2 reductions for these vehicles were not represented as engine and road load reduction components, but rather as total vehicle CO2 reductions.  The control case for HD pickups and vans assumed an increase in VMT from the reference levels by 1.18 percent for HD pickups and vans.

Table VII-8 Estimated Total Vehicle CO2 Reductions for the Proposed Standards and In-Use Emissions for HD Pickup Trucks and Vans in Method B
VEHICLE TYPE
FUEL
MODEL YEAR
                       CO2 REDUCTION FROM REFERENCE CASE
HD pickup trucks and vans
Gasoline and Diesel
2021
                                     2.50%


2022
                                     4.94%


2023
                                     7.31%


2024
                                     9.63%


2025
                                    11.89%


2026
                                    14.09%


2027+
                                    16.24%

         What Are the Projected Reductions in Fuel Consumption and GHG Emissions?
NHTSA and EPA expect significant reductions in GHG emissions and fuel consumption from the proposed rules  -  fuel consumption reductions from more efficient vehicles, emission reductions from both downstream (tailpipe) and upstream (fuel production and distribution) sources, and HFC emissions from the proposed air conditioning leakage standards.  The following subsections summarize two slightly different analyses of the annual GHG emissions and fuel consumption reductions expected from these proposed rules, as well as the reductions in GHG emissions and fuel consumption expected over the lifetime of each heavy-duty vehicle categories.  In addition, because the agencies are carefully considering Alternative 4 along with Alternative 3, the preferred alternative, the results from both are presented here for the reader's reference.  Section VII. C. (1) shows the impacts of the proposed rules and Alternative 4 on fuel consumption and GHG emissions using the MOVES model for tractor-trailers and vocational vehicles, and the DOT's CAFE model for HD pickups and vans (Method A), relative to two different reference cases  -  less dynamic and more dynamic.  Section VII. C. (2) shows the impacts of the proposed standards and Alternative 4, relative to the less dynamic reference case only, using the MOVES model for all heavy-duty vehicle categories.  NHTSA also analyzes these impacts resulting from the proposed rule and reasonable alternatives in Chapters 3 and 5 of its DEIS.
Impacts of the Proposed Rules and Alternative 4 using Analysis Method A
Downstream (Tailpipe) Emissions Projections
As described in Section VII. A, the Method A used MOVES to estimate downstream GHG inventories from the proposed rules for vocational vehicles and tractor-trailers.  For HD pickups and vans, DOT's CAFE model was used.  
The following two tables summarize the agencies' estimates of HD pickup and van fuel consumption and GHG emissions under the current and proposed standards defining the No-Action and Preferred alternatives, respectively.  The first shows results assuming manufacturers would voluntarily make improvements that pay back within six months (i.e., Alternative 1b).  The second shows results assuming manufacturers would only make improvements as needed to achieve compliance with standards (i.e., Alternative 1a).  While underlying calculations are all performed for each calendar year during each vehicle's useful life, presentation of outcomes on a model year basis aligns more clearly with consideration of cost impacts in each model year, and with consideration of standards specified on a model year basis.  In addition, the agencies performed explicit analysis of manufacturers' potential responses to HD pickup and van standards on a model year basis through 2030, and any longer-term costs presented in today's notice represent extrapolation of these results absent any underlying analysis of longer-term technology prospects and manufacturers' longer-term product offerings.
Table VII-9 Estimated Fuel Consumption and GHG Emissions over Useful Life of Vehicles Produced in Each Model year for Method A, Relative to Alternative 1b
Model Year
                          Fuel Consumption (b. gal.)
                          over Fleet's Useful Life
                           GHG Emissions (MMT CO2eq)
                          over Fleet's Useful Life

                                   No Action
                                   Proposed
                                   Reduction
                                   No Action
                                   Proposed
                                   Reduction
2014
                                     9.41
                                     9.41
                                     0.0%
                                      115
                                      115
                                     0.0%
2015
                                     9.53
                                     9.53
                                     0.0%
                                      117
                                      117
                                     0.0%
2016
                                     9.72
                                     9.72
                                     0.0%
                                      119
                                      119
                                     0.0%
2017
                                     9.49
                                     9.47
                                     0.2%
                                      116
                                      116
                                     0.2%
2018
                                     9.26
                                     9.19
                                     0.7%
                                      113
                                      113
                                     0.7%
2019
                                     9.20
                                     9.14
                                     0.7%
                                      113
                                      112
                                     0.7%
2020
                                     9.19
                                     9.12
                                     0.7%
                                      112
                                      112
                                     0.7%
2021
                                     9.10
                                     8.79
                                     3.4%
                                      111
                                      107
                                     3.4%
2022
                                     9.13
                                     8.82
                                     3.4%
                                      112
                                      108
                                     3.4%
2023
                                     9.11
                                     8.59
                                     5.7%
                                      111
                                      105
                                     5.7%
2024
                                     9.32
                                     8.72
                                     6.4%
                                      114
                                      107
                                     6.4%
2025
                                     9.49
                                     8.49
                                     10.5%
                                      116
                                      104
                                     10.4%
2026
                                     9.67
                                     8.56
                                     11.5%
                                      118
                                      105
                                     11.3%
2027
                                     9.78
                                     8.55
                                     12.6%
                                      120
                                      105
                                     12.3%
2028
                                     9.90
                                     8.66
                                     12.6%
                                      121
                                      106
                                     12.3%
2029
                                     10.02
                                     8.75
                                     12.6%
                                      122
                                      107
                                     12.4%
2030
                                     10.03
                                     8.76
                                     12.6%
                                      123
                                      107
                                     12.4%


Table VII-10 Estimated Fuel Consumption and GHG Emissions over Useful Life of Vehicles Produced in Each Model year for Method A, Relative to Alternative 1a
Model Year
                          Fuel Consumption (b. gal.)
                          over Fleet's Useful Life
                           GHG Emissions (MMT CO2eq)
                          over Fleet's Useful Life

                                   No Action
                                   Proposed
                                   Reduction
                                   No Action
                                   Proposed
                                   Reduction
2014
                                     9.41 
                                     9.41 
                                     0.0%
                                      115 
                                      115 
                                     0.0%
2015
                                     9.53 
                                     9.53 
                                     0.0%
                                      117 
                                      117 
                                     0.0%
2016
                                     9.72 
                                     9.72 
                                     0.0%
                                      119 
                                      119 
                                     0.0%
2017
                                     9.49 
                                     9.46 
                                     0.3%
                                      116 
                                      116 
                                     0.3%
2018
                                     9.27 
                                     9.19 
                                     0.8%
                                      114 
                                      113 
                                     0.8%
2019
                                     9.20 
                                     9.14 
                                     0.7%
                                      113 
                                      112 
                                     0.7%
2020
                                     9.25 
                                     9.18 
                                     0.7%
                                      113 
                                      112 
                                     0.8%
2021
                                     9.23 
                                     8.82 
                                     4.4%
                                      113 
                                      108 
                                     4.4%
2022
                                     9.26 
                                     8.85 
                                     4.4%
                                      113 
                                      108 
                                     4.4%
2023
                                     9.23 
                                     8.60 
                                     6.9%
                                      113 
                                      105 
                                     6.9%
2024
                                     9.45 
                                     8.72 
                                     7.7%
                                      116 
                                      107 
                                     7.7%
2025
                                     9.62 
                                     8.48 
                                     11.8%
                                      118 
                                      104 
                                     11.7%
2026
                                     9.81 
                                     8.58 
                                     12.5%
                                      120 
                                      105 
                                     12.3%
2027
                                     9.93 
                                     8.57 
                                     13.7%
                                      121 
                                      105 
                                     13.5%
2028
                                     10.05 
                                     8.68 
                                     13.7%
                                      123 
                                      106 
                                     13.5%
2029
                                     10.17 
                                     8.77 
                                     13.7%
                                      124 
                                      108 
                                     13.5%
2030
                                     10.18 
                                     8.78 
                                     13.7%
                                      124 
                                      108 
                                     13.5%
To more clearly communicate these trends visually, the following two charts present the above results graphically for Method A, relative to Alternative 1b.  As shown, fuel consumption and GHG emissions follow parallel though not precisely identical paths.  Though not presented, charts for Alternative 1a would appear sufficiently similar that differences between Alternative 1a and Alternative 1b remain best communicated by comparing values in the above tables.




Figure VII-7: Fuel Consumption (b. gal.) over Useful Life of HD Pickups and Vans Produced in Each Model Year for Method A



Figure VII-8: GHG Emissions (MMT CO2eq) over Useful Life of HD Pickups and Vans Produced in Each Model Year for Method A

Table VII-11 Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1b using Analysis Method A 
CY
CO2 
(MMT)
CH4 
(MMT CO2eq)
N2O 
(MMT CO2eq)[9]
TOTAL DOWNSTREAM (MMT CO2eq)
2025
                                       
                                       
                                       
                                       
2035
                                       
                                       
                                       
                                       
2050
                                       
                                       
                                       
                                       
Table VII-12 Annual Fuel Savings in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1b using Analysis Method A 
CY
                                DIESEL SAVINGS
                               (Billion Gallons)
                               GASOLINE SAVINGS
                               (Billion Gallons)
2025
                                       
                                       
2035
                                       
                                       
2050
                                       
                                       
Table VII-13: Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method A 
CY
CO2 
(MMT)
CH4 
(MMT CO2eq)
N2O 
(MMT CO2eq)[9]
TOTAL DOWNSTREAM (MMT CO2eq)
2025
                                       
                                       
                                       
                                       
2035
                                       
                                       
                                       
                                       
2050
                                       
                                       
                                       
                                       
Table VII-14 Annual Fuel Savings in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method A 
CY
                                DIESEL SAVINGS
                               (Billion Gallons)
                               GASOLINE SAVINGS
                               (Billion Gallons)
2025
                                       
                                       
2035
                                       
                                       
2050
                                       
                                       
Table VII-15 Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  - Alternative 4 vs. Alt 1b using Analysis Method A 
CY
CO2 
(MMT)
CH4 
(MMT CO2eq)
N2O 
(MMT CO2eq)[9]
TOTAL DOWNSTREAM (MMT CO2eq)
2025
                                       
                                       
                                       
                                       
2035
                                       
                                       
                                       
                                       
2050
                                       
                                       
                                       
                                       
Table VII-16: Annual Fuel Savings in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1b using Analysis Method A 
CY
                                DIESEL SAVINGS
                               (Billion Gallons)
                               GASOLINE SAVINGS
                               (Billion Gallons)
2025
                                       
                                       
2035
                                       
                                       
2050
                                       
                                       
Table VII-17 Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method A 
CY
CO2 
(MMT)
CH4 
(MMT CO2eq)
N2O 
(MMT CO2eq)[9]
TOTAL DOWNSTREAM (MMT CO2eq)
2025
                                       
                                       
                                       
                                       
2035
                                       
                                       
                                       
                                       
2050
                                       
                                       
                                       
                                       
Table VII-18 Annual Fuel Savings in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method A 
CY
                                DIESEL SAVINGS
                               (Billion Gallons)
                               GASOLINE SAVINGS
                               (Billion Gallons)
2025
                                       
                                       
2035
                                       
                                       
2050
                                       
                                       
Upstream (Fuel Production and Distribution) Emissions Projections
Table VII-19 Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1b using Analysis Method A
CY
                                      CO2
                                     (MMT)
                                      CH4
                                  (MMT CO2eq)
                                      N2O
                                  (MMT CO2eq)
                                TOTAL UPSTREAM
                                  (MMT CO2eq)
2025
                                       
                                       
                                       
                                       
2035
                                       
                                       
                                       
                                       
2050
                                       
                                       
                                       
                                       
Table VII-20 Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method A
CY
                                      CO2
                                     (MMT)
                                      CH4
                                  (MMT CO2eq)
                                      N2O
                                  (MMT CO2eq)
                                TOTAL UPSTREAM
                                  (MMT CO2eq)
2025
                                       
                                       
                                       
                                       
2035
                                       
                                       
                                       
                                       
2050
                                       
                                       
                                       
                                       
Table VII-21 Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1b using Analysis Method A
CY
                                      CO2
                                     (MMT)
                                      CH4
                                  (MMT CO2eq)
                                      N2O
                                  (MMT CO2eq)
                                TOTAL UPSTREAM
                                  (MMT CO2eq)
2025
                                       
                                       
                                       
                                       
2035
                                       
                                       
                                       
                                       
2050
                                       
                                       
                                       
                                       
Table VII-22 Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method A
CY
                                      CO2
                                     (MMT)
                                      CH4
                                  (MMT CO2eq)
                                      N2O
                                  (MMT CO2eq)
                                TOTAL UPSTREAM
                                  (MMT CO2eq)
2025
                                       
                                       
                                       
                                       
2035
                                       
                                       
                                       
                                       
2050
                                       
                                       
                                       
                                       
HFC Emissions Projections
The projected HFC emission reductions due to the proposed AC leakage standards are 93,272 metric tons of CO2eq in 2025, 253,118 metric tons of CO2eq in 2035, and 299,590 metric tons CO2eq in 2050.

Total (Downstream + Upstream + HFC) Emissions Projections

Table VII-23 Annual Total GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1b using Analysis Method A
CY
                               2025 (MMT CO2eq)
                               2035 (MMT CO2eq)
                               2050 (MMT CO2eq)
Downstream
                                       
                                       
                                       
Upstream
                                       
                                       
                                       
HFC
                                     0.09
                                     0.25
                                      0.3
Total
                                       
                                       
                                       
Table VII-24 Annual Total GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method A
CY
                               2025 (MMT CO2eq)
                               2035 (MMT CO2eq)
                               2050 (MMT CO2eq)
Downstream
                                       
                                       
                                       
Upstream
                                       
                                       
                                       
HFC
                                     0.09
                                     0.25
                                      0.3
Total
                                       
                                       
                                       
Table VII-25 Annual Total GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1b using Analysis Method A
CY
                               2025 (MMT CO2eq)
                               2035 (MMT CO2eq)
                               2050 (MMT CO2eq)
Downstream
                                       
                                       
                                       
Upstream
                                       
                                       
                                       
HFC
                                     0.09
                                     0.25
                                      0.3
Total
                                       
                                       
                                       
Table VII-26 Annual Total GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050 2050  -  Alternative 4 vs. Alt 1a using Analysis Method A
CY
                               2025 (MMT CO2eq)
                               2035 (MMT CO2eq)
                               2050 (MMT CO2eq)
Downstream
                                       
                                       
                                       
Upstream
                                       
                                       
                                       
HFC
                                     0.09
                                     0.25
                                      0.3
Total
                                       
                                       
                                       

    Model Year Lifetime Analysis
Table VII-27 Lifetime GHG Reductions and Fuel Savings  -  Preferred Alternative vs. Alt 1b using Analysis Method A
MODEL YEARS
                     DOWNSTREAM GHG REDUCTIONS (MMT CO2eq)
                        FUEL SAVINGS 
(Billion Gallons)
2018-2029
                                       
                                       

Table VII-28 Lifetime GHG Reductions and Fuel Savings  -  Preferred Alternative vs. Alt 1a using Analysis Method A
MODEL YEARS
                     DOWNSTREAM GHG REDUCTIONS (MMT CO2eq)
                        FUEL SAVINGS 
(Billion Gallons)
2018-2029
                                       
                                       
Table VII-29 Lifetime GHG Reductions and Fuel Savings  -  Alternative 4 vs. Alt 1b using Analysis Method A
MODEL YEARS
                     DOWNSTREAM GHG REDUCTIONS (MMT CO2eq)
                        FUEL SAVINGS 
(Billion Gallons)
2018-2029
                                       
                                       
Table VII-30 Lifetime GHG Reductions and Fuel Savings  -  Alternative 4 vs. Alt 1a using Analysis Method A
MODEL YEARS
                     DOWNSTREAM GHG REDUCTIONS (MMT CO2eq)
                        FUEL SAVINGS 
(Billion Gallons)
2018-2029
                                       
                                       

Impacts of the Proposed Rules and Alternative 4 using Analysis Method B
    Calendar Year Analysis
Downstream (Tailpipe) Emissions Projections
As described in Section VII. A., the Method B used MOVES to estimate downstream GHG inventories from the proposed rules and Alternative 4 relative to Alternative 1a for all heavy-duty vehicle categories (including the engines associated with tractor-trailer combinations and vocational vehicles).  The agencies expect reductions in CO2 emissions from all heavy-duty vehicle categories due to engine and vehicle improvements.  We expect N2O emissions to increase very slightly because of a rebound in vehicle miles traveled (VMT).  However, since N2O is produced as a byproduct of fuel combustion, the increase in N2O emissions is expected to be more than offset by the improvements in fuel efficiency from the proposed rules.  We expect methane emissions to decrease primarily due to reduced refueling from improved fuel efficiency and the differences in hydrocarbon emission characteristics between on-road diesel engines and APUs.  The amount of methane emitted as a fraction of total hydrocarbons is expected to be significantly less for APUs than for on-road diesel engines during extended idling.  Overall, the downstream GHG emissions would be reduced significantly and are described in the following subsections.  
Since fuel consumption is not directly modeled in MOVES, the total energy consumption was run as a surrogate in MOVES.  Then, the total energy consumption was converted to fuel consumption based on the fuel heating values assumed in the Renewable Fuels Standard rulemaking and used in the development of MOVES emission and energy rates.  
Table VII-31 and Table VII-32 show the impacts on downstream GHG emissions and fuel savings in 2025, 2035 and 2050, relative to Alternative 1a, for the preferred alternative and Alternative 4, respectively.  Table VII-33 and Table VII-34 show the estimated fuel savings from the preferred alternative and Alternative 4 in 2025, 2035, and 2050, relative to Alternative 1a.  For both GHG emissions and fuel savings, the annual impacts are greater for Alternative 4 than the preferred alternative in earlier years, but the differences become indistinguishable by 2050.  The results from the comparable analyses relative to Alternative 1b are presented in Section VII. C. (1). 
Table VII-31 Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method B 
CY
CO2 
(MMT)
CH4 
(MMT CO2eq)
N2O 
(MMT CO2eq)
TOTAL DOWNSTREAM (MMT CO2eq)
2025
                                     -27.0
                                     -0.4
                                     0.002
                                     -27.4
2035
                                     -93.7
                                     -1.0
                                     0.004
                                     -94.7
2050
                                    -135.1
                                     -1.4
                                     0.005
                                    -136.5
Table VII-32 Annual Downstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method B
CY
CO2 
(MMT)
CH4 
(MMT CO2eq)
N2O 
(MMT CO2eq)
TOTAL DOWNSTREAM (MMT CO2eq)
2025
                                     -33.3
                                     -0.4
                                     0.002
                                     -33.7
2035
                                     -97.3
                                     -1.0
                                     0.004
                                     -98.3
2050
                                    -135.5
                                     -1.4
                                     0.005
                                    -136.9
Table VII-33 Annual Fuel Savings in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method B 
CY
                                DIESEL SAVINGS
                               (Billion Gallons)
                               GASOLINE SAVINGS
                               (Billion Gallons)
2025
                                      2.5
                                      0.2
2035
                                      8.5
                                      0.8
2050
                                     12.3
                                      1.1

Table VII-34 Annual Fuel Savings in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method B
CY
                                DIESEL SAVINGS
                               (Billion Gallons)
                               GASOLINE SAVINGS
                               (Billion Gallons)
2025
                                      3.1
                                      0.3
2035
                                      8.8
                                      0.9
2050
                                     12.3
                                      1.1

Upstream (Fuel Production and Distribution) Emissions Projections
The upstream GHG emission reductions associated with the production and distribution of gasoline and diesel from crude oil were based on emission factors from DOE's "Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation" (GREET) model.  In some cases, the GREET values were modified or updated by the agencies to be consistent with EPA's National Emissions Inventory (NEI), and emission factors from MOVES.   More information regarding these modifications can be found in Chapter 5 of the draft RIA. These estimates show the impacts for domestic emission reductions only.  Additionally, since this rulemaking is not expected to impact biofuel volumes mandated by the Annual Renewable Fuel Standards (RFS) regulations, the impacts on upstream emissions from changes in biofuel feedstock (i.e., agricultural sources such as fertilizer, fugitive dust, and livestock) are not shown.  GHG emission reductions from upstream sources can be found in Table VII-35 and Table VII-36 for preferred alternative and Alternative 4, respectively.
Table VII-35 Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method B 
CY
                                      CO2
                                     (MMT)
                                      CH4
                                  (MMT CO2eq)
                                      N2O
                                  (MMT CO2eq)
                                TOTAL UPSTREAM
                                  (MMT CO2eq)
2025
                                     -8.4
                                     -0.9
                                     -0.04
                                     -9.3
2035
                                     -29.1
                                     -3.0
                                     -0.14
                                     -32.2
2050
                                     -41.9
                                     -4.4
                                     -0.20
                                     -46.5
Table VII-36 Annual Upstream GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method B
CY
                                      CO2
                                     (MMT)
                                      CH4
                                  (MMT CO2eq)
                                      N2O
                                  (MMT CO2eq)
                                TOTAL UPSTREAM
                                  (MMT CO2eq)
2025
                                     -10.4
                                     -1.0
                                     -0.1
                                     -11.5
2035
                                     -30.1
                                     -3.2
                                     -0.1
                                     -33.4
2050
                                     -42.0
                                     -4.4
                                     -0.2
                                     -46.6

HFC Emissions Projections
Based on projected HFC emission reductions due to the proposed AC leakage standards, EPA estimates the HFC reductions to be 93,272 metric tons of CO2eq in 2025, 253,118 metric tons of CO2eq in 2035, and 299,590 metric tons CO2eq in 2050, as detailed in Chapters 5.3.4 of the draft RIA.
Total (Downstream + Upstream + HFC) Emissions Projections
Table VII-37 combines the impacts of the preferred alternative from downstream (Table VII-31), upstream (Table VII-35), and HFC to summarize the total GHG reductions in calendar years 2025, 2035 and 2050, relative to Alternative 1a.  The combined impact of Alternative 4 on total GHG emissions are shown in Table VII-38.  Because of the differences in lead time, as expected, Alternative 4 shows greater annual GHG reductions in earlier years (i.e., calendar year 2025), but by 2050, the preferred alternative and Alternative 4 show the same magnitude of reductions in annual GHG emissions. 
Table VII-37 Annual Total GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method B 
CY
                               2025 (MMT CO2eq)
                               2035 (MMT CO2eq)
                               2050 (MMT CO2eq)
Downstream
                                     -27.4
                                     -94.7
                                    -136.5
Upstream
                                     -9.3
                                     -32.2
                                     -46.5
HFC
                                     -0.1
                                     -0.25
                                     -0.3
Total
                                     -36.8
                                    -127.2
                                    -183.3
Table VII-38 Annual Total GHG Emissions Impacts in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method B
CY
                               2025 (MMT CO2eq)
                               2035 (MMT CO2eq)
                               2050 (MMT CO2eq)
Downstream
                                     -33.7
                                     -98.3
                                    -136.9
Upstream
                                     -11.5
                                     -33.4
                                     -46.6
HFC
                                     -0.1
                                     -0.25
                                     -0.3
Total
                                     -45.3
                                    -132.0
                                    -183.8

    Model Year Lifetime Analysis
In addition to the annual GHG emissions and fuel consumption reductions expected from the proposed rules, the downstream GHG and fuel consumption impacts for the lifetime of the impacted vehicles were estimated.  Table VII-39 and Table VII-40 show the fleet-wide GHG reductions and fuel savings from the preferred alternative and Alternative 4, relative to Alternative 1a, through the lifetime of heavy-duty vehicles.  Compared to the preferred alternative, Alternative 4 shows greater lifetime GHG reductions and fuels savings by 12 percent and 13 percent, respectively.  For the lifetime GHG reductions and fuel savings by vehicle categories, see Chapter 5 of the draft RIA.
Table VII-39 Lifetime GHG Reductions and Fuel Savings  -  Preferred Alternative vs. Alt 1a using Analysis Method B 
MODEL YEARS
                     DOWNSTREAM GHG REDUCTIONS (MMT CO2eq)
                        FUEL SAVINGS 
(Billion Gallons)
2018-2029
                                     772.6
                                     75.8
Table VII-40 Lifetime GHG Reductions and Fuel Savings  -  Alternative 4 vs. Alt 1a using Analysis Method 
MODEL YEARS
                     DOWNSTREAM GHG REDUCTIONS (MMT CO2eq)
                        FUEL SAVINGS 
(Billion Gallons)
2018-2029
                                     867.3
                                     85.4

         Climate Impacts and Indicators
         
Climate Change Impacts from GHG Emissions 
    The impact of GHG emissions on the climate has been reviewed in the 2009 Endangerment and Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act, the 2012-2016 light-duty vehicle rulemaking, the 2014-2018 heavy-duty vehicle GHG and Fuel Efficiency rulemaking, and the 2017-2025 light-duty vehicle rulemaking, and the proposed standards for new electricity utility generating units. See 74 FR at 66496; 75 FR at 25491; 76 FR at 57294; 77 FR at 62894; 79 FR at 1456-59 (Jan.8, 2014).  This section briefly discusses again some of the climate impact of EPA's proposed actions in context of transportation emissions.  NHTSA has analyzed the climate impacts of its specific proposed actions (i.e., excluding EPA's HFC regulatory provisions) as well as reasonable alternative in its DEIS that accompanies this NPRM.  DOT has considered the potential climate impacts documented in the DEIS as part of the rulemaking process.
Once emitted, GHGs that are the subject of this proposed regulation can remain in the atmosphere for decades to millennia, meaning that 1) their concentrations become well-mixed throughout the global atmosphere regardless of emission origin, and 2) their effects on climate are long lasting.  GHG emissions come mainly from the combustion of fossil fuels (coal, oil, and gas), with additional contributions from the clearing of forests, agricultural activities, cement production, and some industrial activities.  Transportation activities, in aggregate, were the second largest contributor to total U.S. GHG emissions in 2010 (27 percent of total emissions). 
The EPA Administrator relied on thorough and peer-reviewed assessments of climate change science prepared by the Intergovernmental Panel on Climate Change ("IPCC"), the United States Global Change Research Program ("USGCRP"), and the National Research Council of the National Academies ("NRC")  as the primary scientific and technical basis for the Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act (74 FR  66496, December 15, 2009).  These assessments comprehensively address the scientific issues the EPA Administrator had to examine, providing her data and information on a wide range of issues pertinent to the Endangerment Finding.  These assessments have been rigorously reviewed by the expert community, and also by United States government agencies and scientists, including by EPA itself.
Based on these assessments, the EPA Administrator determined that the emissions from new motor vehicles and engines contributes to elevated concentrations of greenhouse gases, that these greenhouse gases cause warming; that the recent warming has been attributed to the increase in greenhouse gases; and that warming of the climate endangers the public health and welfare of current and future generations.  See Coalition for Responsible Regulation v. EPA, 684 F. 3d 102, 121 (D.C. Cir. 2012) (upholding all of EPA's findings and stating "EPA had before it substantial record evidence that anthropogenic emissions of greenhouse gases `very likely' caused warming of the climate over the last several decades.  EPA further had evidence of current and future effects of this warming on public health and welfare. Relying again upon substantial scientific evidence, EPA determined that anthropogenically induced climate change threatens both public health and public welfare.  It found that extreme weather events, changes in air quality, increases in food- and water-borne pathogens, and increases in temperatures are likely to have adverse health effects.  The record also supports EPA's conclusion that climate change endangers human welfare by creating risk to food production and agriculture, forestry, energy, infrastructure, ecosystems, and wildlife. Substantial evidence further supported EPA's conclusion that the warming resulting from the greenhouse gas emissions could be expected to create risks to water resources and in general to coastal areas as a result of expected increase in sea level.") 
A number of major peer-reviewed scientific assessments have been released since the administrative record concerning the Endangerment Finding closed following EPA's 2010 Reconsideration Denial.  These assessments include the "Special Report on Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation", the 2013-14 Fifth Assessment Report (AR5), the 2014 National Climate Assessment report, the "Ocean Acidification: A National Strategy to Meet the Challenges of a Changing Ocean," "Report on Climate Stabilization Targets: Emissions, Concentrations, and Impacts over Decades to Millennia," "National Security Implications for U.S. Naval Forces" (National Security Implications), "Understanding Earth's Deep Past: Lessons for Our Climate Future," "Sea Level Rise for the Coasts of California, Oregon, and Washington: Past, Present, and Future," "Climate and Social Stress: Implications for Security Analysis," and "Abrupt Impacts of Climate Change" (Abrupt Impacts) assessments.
EPA has reviewed these assessments and finds that in general, the improved understanding of the climate system they present are consistent with the assessments underlying the 2009 Endangerment Finding.
The most recent assessments released were the IPCC AR5 assessments between September 2013 and April 2014, the NRC Abrupt Impacts assessment in December of 2013, and the U.S. National Climate Assessment in May of 2014. The NRC Abrupt Impacts report examines the potential for tipping points, thresholds beyond which major and rapid changes occur in the Earth's climate system or other systems impacted by the climate.  The Abrupt Impacts report did find less cause for concern than some previous assessments regarding some abrupt events within the next century such as disruption of the Atlantic Meridional Overturning Circulation (AMOC) and sudden releases of high-latitude methane from hydrates and permafrost, but found that the potential for abrupt changes in ecosystems, weather and climate extremes, and groundwater supplies critical for agriculture now seem more likely, severe, and imminent.  The assessment found that some abrupt changes were already underway (Arctic sea ice retreat and increases in extinction risk due to the speed of climate change), but cautioned that even abrupt changes such as the AMOC disruption that are not expected in this century can have severe impacts when they happen.
The IPCC AR5 assessments are also generally consistent with the underlying science supporting the 2009 Endangerment Finding.  For example, confidence in attributing recent warming to human causes has increased: the IPCC stated that it is extremely likely (>95 percent confidence) that human influences have been the dominant cause of recent warming. Moreover, the IPCC found that the last 30 years were likely (>66 percent confidence) the warmest 30 year period in the Northern Hemisphere of the past 1400 years, that the rate of ice loss of worldwide glaciers and the Greenland and Antarctic ice sheets has likely increased, that there is medium confidence that the recent summer sea ice retreat in the Arctic is larger than it has been in 1450 years, and that concentrations of carbon dioxide and several other of the major greenhouse gases are higher than they have been in at least 800,000 years.  Climate-change induced impacts have been observed in changing precipitation patterns, melting snow and ice, species migration, negative impacts on crops, increased heat and decreased cold mortality, and altered ranges for water-borne illnesses and disease vectors.  Additional risks from future changes include death, injury, and disrupted livelihoods in coastal zones and regions vulnerable to inland flooding, food insecurity linked to warming, drought, and flooding, especially for poor populations, reduced access to drinking and irrigation water for those with minimal capital in semi-arid regions, and decreased biodiversity in marine ecosystems, especially in the Arctic and tropics, with implications for coastal livelihoods.  The IPCC determined that "[c]ontinued emissions of greenhouse gases will cause further warming and changes in all components of the climate system.  Limiting climate change will require substantial and sustained reductions of greenhouse gases emissions."
Finally, the recently released National Climate Assessment stated, "Climate change is already affecting the American people in far reaching ways.  Certain types of extreme weather events with links to climate change have become more frequent and/or intense, including prolonged periods of heat, heavy downpours, and, in some regions, floods and droughts.  In addition, warming is causing sea level to rise and glaciers and Arctic sea ice to melt, and oceans are becoming more acidic as they absorb carbon dioxide.  These and other aspects of climate change are disrupting people's lives and damaging some sectors of our economy."
Assessments from these bodies represent the current state of knowledge, comprehensively cover and synthesize thousands of individual studies to obtain the majority conclusions from the body of scientific literature and undergo a rigorous and exacting standard of review by the peer expert community and U.S. government.
Based on modeling analysis performed by the agencies, reductions in CO2 and other GHG emissions associated with this proposed rule will affect future climate change. Since GHGs are well-mixed in the atmosphere and have long atmospheric lifetimes, changes in GHG emissions will affect atmospheric concentrations of greenhouse gases and future climate for decades to millennia, depending on the gas.  This section provides estimates of the projected change in atmospheric CO2 concentrations based on the emission reductions estimated for this proposed rule, compared to the reference case. In addition, this section analyzes the response to the changes in GHG concentrations of the following climate-related variables: global mean temperature, sea level rise, and ocean pH. 
     (1)         Projected Change in Atmospheric CO2 Concentrations, Global Mean Surface Temperature and Sea Level Rise
To assess the impact of the emissions reductions from the proposed rule, EPA estimated changes in projected atmospheric CO2 concentrations, global mean surface temperature and sea-level rise to 2100 using the GCAM (Global Change Assessment Model, formerly MiniCAM), integrated assessment model coupled with the MAGICC (Model for the Assessment of Greenhouse-gas Induced Climate Change) simple climate model. GCAM was used to create the globally and temporally consistent set of climate relevant emissions required for running MAGICC.  MAGICC was then used to estimate the projected change in relevant climate variables over time.  Given the magnitude of the estimated emissions reductions associated with this rule, a simple climate model such as MAGICC is appropriate for estimating the atmospheric and climate response.
The analysis projects that the proposed rule would reduce atmospheric concentrations of CO2, global climate warming, ocean acidification, and sea level rise relative to the reference case.  Although the projected reductions and improvements are small in comparison to the total projected climate change, they are quantifiable, directionally consistent, and will contribute to reducing the risks associated with climate change.  Climate change is a global phenomenon and EPA recognizes that this one national action alone will not prevent it; EPA notes this would be true for any given GHG mitigation action when taken alone or when considered in isolation. EPA also notes that a substantial portion of CO2 emitted into the atmosphere is not removed by natural processes for millennia, and therefore each unit of CO2 not emitted into the atmosphere due to this rule avoids essentially permanent climate change on centennial time scales.     
EPA determines that the projected reductions in atmospheric CO2, global mean temperature, sea level rise, and ocean pH are meaningful in the context of this action.  The results of the analysis, summarized in Table VII-41, demonstrate that relative to the reference case, by 2100 projected atmospheric CO2 concentrations are estimated to be reduced by 1.1 to 1.2 part per million by volume (ppmv), global mean temperature is estimated to be reduced by 0.0026 to 0.0065 °C, and sea-level rise is projected to be reduced by approximately 0.023 to 0.057 cm, based on a range of climate sensitivities (described below).  Details about this modeling analysis can be found in the draft RIA Chapter 6.3. 
Table VII-41 Impact of GHG Emissions Reductions on Projected Changes in Global Climate Associated with Proposed Phase 2 Standards for MY 2018-2024 (Based on a range of climate sensitivities from 1.5-6°C)
Variable
Units
Year
Projected Change
Atmospheric CO2 Concentration
ppmv
2100
-1.1 to -1.2
Global Mean Surface Temperature
ºC
2100
-0.0026 to -0.0065
Sea Level Rise
cm
2100
-0.023 to -0.057
Ocean pH
pH units
2100
+0.0006[a]
     Note:
     a The value for projected change in ocean pH is based on a climate sensitivity of 3.0.
  
The projected reductions are small relative to the change in temperature (1.8  -  4.8 ºC), CO2 concentration (404 to 470 ppm), sea level rise (23  -  56 cm), and ocean acidity (-0.30 pH units) from 1990 to 2100 from the MAGICC simulations for the GCAM reference case. However, this is to be expected given the magnitude of emissions reductions expected from the program in the context of global emissions.  This uncertainty range does not include the effects of uncertainty in future emissions. It should also be noted that the calculations in MAGICC do not include the possible effects of accelerated ice flow in Greenland and/or Antarctica: estimates of sea level rise from the recent NRC, IPCC, and NCA assessments range from 26 cm to 2 meters depending on the emissions scenario, the processes included, and the likelihood range assessed.  Further discussion of EPA's modeling analysis is found in the RIA, Chapter 6.3.
Based on the projected atmospheric CO2 concentration reductions resulting from this proposed rule, EPA calculates an increase in ocean pH of 0.0006 pH units in 2100 relative to the baseline case (this is a reduction in the expected acidification of the ocean of  a decrease of 0.3 pH units from 1990 to 2100 in the baseline case).  Thus, this analysis indicates the projected decrease in atmospheric CO2 concentrations from the proposed Phase 2 standards would result in an increase in ocean pH (i.e., a reduction in the expected acidification of the ocean in the reference case).  A more detailed discussion of the modeling analysis associated with ocean pH is provided in the draft RIA, Chapter 6.3.
The 2011 NRC assessment on "Climate Stabilization Targets: Emissions, Concentrations, and Impacts over Decades to Millennia" determined how a number of climate impacts - such as heaviest daily rainfalls, crop yields, and Arctic sea ice extent - would change with a temperature change of 1 degree Celsius (C) of warming.  These relationships of impacts with temperature change could be combined with the calculated reductions in warming in Table VII-41 to estimate changes in these impacts associated with this proposed rulemaking.
As a substantial portion of CO2 emitted into the atmosphere is not removed by natural processes for millennia, each unit of CO2 not emitted into the atmosphere avoids some degree of effectively permanent climate change.  Therefore, reductions in emissions in the near-term are important in determining climate impacts experienced not just over the next decades but over thousands of years.  Though the magnitude of the avoided climate change projected here in isolation is small in comparison to the total projected changes, these reductions represent a reduction in the adverse risks associated with climate change (though these risks were not formally estimated for this action) across a range of equilibrium climate sensitivities.
EPA's analysis of this proposed rule's impact on global climate conditions is intended to quantify these potential reductions using the best available science.  EPA's modeling results show consistent reductions relative to the baseline case in changes of CO2 concentration, temperature, sea-level rise, and ocean pH over the next century. 


II.  How Will This Proposed Action Impact Non-GHG Emissions and Their Associated Effects?
The proposed heavy-duty vehicle standards are expected to influence the emissions of criteria air pollutants and several air toxics.  This section describes the projected impacts of the proposed rules and Alternative 4 on non-GHG emissions and air quality, and the health and environmental effects associated with these pollutants. NHTSA further analyzes these projected health and environmental effects resulting from its proposed rule and reasonable alternatives in Chapter 4 of its DEIS.  
         Emissions Inventory Impacts
As described in Section VII, the agencies conducted coordinated and complementary analyses for this rule by employing both DOT's CAFE model and EPA's MOVES model, relative to different reference cases (i.e., different baselines).  The agencies used EPA's MOVES model to estimate the non-GHG impacts for tractor-trailers (including the engines which power the vehicle), and vocational vehicles (including the engine which powers the vehicle).  For heavy-duty pickups and vans, the agencies performed complementary analyses using the CAFE model ("Method A") and the MOVES model ("Method B") to estimate non-GHG emissions from these vehicles.  For both methods, the agencies analyzed the impact of the proposed rules, relative to two different reference cases  -  less dynamic and more dynamic.  The less dynamic baseline projects very little improvement in new vehicles in the absence of new Phase 2 standards.  In contrast, the more dynamic baseline projects more improvements in vehicle fuel efficiency.  The agencies considered both reference cases.  The results for all of the regulatory alternatives relative to both reference cases, derived via the same methodologies discussed in Section VII of the Preamble, are presented in Section X of the Preamble.  
For brevity, a subset of these analyses are presented in this section and the reader is referred to both the RIA Chapter 11 and NHTSA's DEIS Chapters 3 and 5 for complete sets of these analyses.  In this section, Method A is presented for both the proposed standards (i.e., Alternative 3 -- the agencies' preferred alternative) and for the standards the agencies considered in Alternative 4, relative to both the more dynamic baseline (Alternative 1b) and the less dynamic baseline (Alternative 1a).  Method B is presented also for the proposed standards and Alternative 4, but relative only to the less dynamic baseline.  The agencies' intention for presenting both of these complementary and coordinated analyses is to offer interested readers the opportunity to compare the regulatory alternatives considered for Phase 2 in both the context of our HD Phase 1 analytical approaches and our light-duty vehicle analytical approaches.  The agencies view these analyses as corroborative and reinforcing: both support agencies' conclusion that the proposed standards are appropriate and at the maximum feasible levels.
The following subsections summarize two slightly different analyses of the annual non-GHG emissions reductions expected from the proposed standards and Alternative 4.  Section VIII. A. (1) presents the impacts of the proposed rules and Alternative 4 on non-GHG emissions using the analytical Method A, relative to two different reference cases  -  less dynamic and more dynamic.  Section VIII. A. (2) presents the impacts of the proposed standards and Alternative 4, relative to the less dynamic reference case only, using the MOVES model for all heavy-duty vehicle categories.   
Impacts of the Proposed Rules and Alternative 4 using Analysis Method A
    Upstream Impacts of the Proposed Program and Alternative 4
Table VIII-1 Annual Upstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1b using Analysis Method A
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       

Table VIII-2 Annual Upstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1b using Analysis Method A
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       





Table VIII-3 Annual Upstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method A
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       

Table VIII-4 Annual Upstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method A
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       
    Downstream Impacts of the Proposed Program and Alternative 4
For vocational vehicles and tractor-trailers, the agencies used the MOVES model to determine non-GHG emissions inventories.  The improvements in engine efficiency and road load, the increased use of APUs, and VMT rebound were included in the MOVES analysis.  For the Method A analysis presented in this section, the DOT CAFE model for HD pickups and vans was used.  Further information about DOT's CAFE model is available in Section VI.C and Chapter 10 of the draft RIA.  
Table VIII-5 Annual Downstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1b using Analysis Method A
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5[a]  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       
Note:
[a] Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and brake wear are included. 

Table VIII-6 Annual Downstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1b using Analysis Method A
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5[a]  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       
Note:
[a] Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and brake wear are included. 
Table VIII-7 Annual Downstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method A
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5[a]  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       
Note:
[a] Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and brake wear are included. 

Table VIII-8 Annual Downstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method A
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5[a]  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       
Note:
[a] Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and brake wear are included. 


    Total Impacts of the Proposed Program and Alternative 4
Table VIII-9 Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1b using Analysis Method A
                                   Pollutant
                                    CY2025
                                    CY2035
                                    CY2050
                                       
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       

Table VIII-10 Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1b using Analysis Method A
                                   Pollutant
                                    CY2025
                                    CY2035
                                    CY2050
                                       
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       

Table VIII-11 Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method A
                                   Pollutant
                                    CY2025
                                    CY2035
                                    CY2050
                                       
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       

Table VIII-12 Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method A
                                   Pollutant
                                    CY2025
                                    CY2035
                                    CY2050
                                       
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                       
                                       
                                       
                                       
                                       
                                       
Acetaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
Acrolein 
                                       
                                       
                                       
                                       
                                       
                                       
Benzene 
                                       
                                       
                                       
                                       
                                       
                                       
CO 
                                       
                                       
                                       
                                       
                                       
                                       
Formaldehyde 
                                       
                                       
                                       
                                       
                                       
                                       
NOx  
                                       
                                       
                                       
                                       
                                       
                                       
PM2.5  
                                       
                                       
                                       
                                       
                                       
                                       
SOx  
                                       
                                       
                                       
                                       
                                       
                                       
VOC
                                       
                                       
                                       
                                       
                                       
                                       

Impacts of the Proposed Rules and Alternative 4 using Analysis Method B
    Upstream Impacts of the Proposed Program and Alternative 4
Increasing efficiency in heavy-duty vehicles would result in reduced fuel demand, and therefore, reductions in the emissions associated with all processes involved in getting petroleum to the pump.  To project these impacts, Method B estimated the impact of reduced petroleum volumes on the extraction and transportation of crude oil as well as the production and distribution of finished gasoline and diesel.  For the purpose of assessing domestic-only emission reductions, it was necessary to estimate the fraction of fuel savings attributable to domestic finished gasoline and diesel, and of this fuel, what fraction is produced from domestic crude.  Method B estimated the emissions associated with production and distribution of gasoline and diesel from crude oil based on emission factors in the "Greenhouse Gases, Regulated Emissions, and Energy used in Transportation" model (GREET) developed by DOE's Argonne National Laboratory.  In some cases, the GREET values were modified or updated by the agencies to be consistent with the National Emission Inventory (NEI) and emission factors from MOVES.  Method B estimated the projected corresponding changes in upstream emissions using the same tools originally created for the Renewable Fuel Standard 2 (RFS2) rulemaking analysis, used in the LD GHG rulemakings, HD GHG Phase 1, and updated for the current analysis.  More information on the development of the emission factors used in this analysis can be found in Chapter 5 of the draft RIA.
Table VIII-13 and Table VIII-14 summarizes the projected upstream emission impacts of the Preferred Alternative and Alternative 4 on both criteria pollutants and air toxics from the heavy-duty sector, relative to Alternative 1a.  The comparable estimates relative to Alternative 1b are presented in Section VIII. A. (1). 
Table VIII-13 Annual Upstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method B
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                      -1
                                     -5.0%
                                      -4
                                    -15.3%
                                      -5
                                    -18.4%
Acetaldehyde 
                                      -4
                                     -3.0%
                                      -18
                                    -11.9%
                                      -26
                                    -14.6%
Acrolein 
                                     -0.5
                                     -3.4%
                                      -2
                                    -12.7%
                                      -3
                                    -15.5%
Benzene 
                                      -24
                                     -3.8%
                                      -92
                                    -13.4%
                                     -132
                                    -16.3%
CO 
                                    -3,798
                                     -4.9%
                                    -13,001
                                    -15.3%
                                    -18,772
                                    -18.4%
Formaldehyde 
                                      -19
                                     -4.7%
                                      -67
                                    -14.9%
                                      -98
                                    -18.0%
NOx  
                                    -9,282
                                     -4.9%
                                    -31,782
                                    -15.3%
                                    -45,888
                                    -18.4%
PM2.5  
                                    -1,020
                                     -4.9%
                                    -3,514
                                    -15.2%
                                    -5,072
                                    -18.2%
SOx  
                                    -5,817
                                     -4.9%
                                    -19,902
                                    -15.3%
                                    -28,736
                                    -18.4%
VOC
                                    -3,283
                                     -3.7%
                                    -12,724
                                    -13.2%
                                    -18,214
                                    -16.1%

Table VIII-14 Annual Upstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method B
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                      -1
                                     -6.1%
                                      -4
                                    -15.9%
                                      -5
                                    -18.4%
Acetaldehyde 
                                      -6
                                     -4.3%
                                      -20
                                    -12.6%
                                      -26
                                    -14.7%
Acrolein 
                                      -1
                                     -4.7%
                                      -2
                                    -13.3%
                                      -3
                                    -15.5%
Benzene 
                                      -32
                                     -5.0%
                                      -97
                                    -14.0%
                                     -133
                                    -16.3%
CO 
                                    -4,661
                                     -6.1%
                                    -13,485
                                    -15.9%
                                    -18,812
                                    -18.4%
Formaldehyde 
                                      -24
                                     -5.9%
                                      -70
                                    -15.5%
                                      -97
                                    -18.0%
NOx  
                                    -11,393
                                     -6.1%
                                    -32,965
                                    -15.9%
                                    -45,986
                                    -18.4%
PM2.5  
                                    -1,256
                                     -6.0%
                                    -3,647
                                    -15.7%
                                    -5,083
                                    -18.3%
SOx  
                                    -7,137
                                     -6.1%
                                    -20,641
                                    -15.9%
                                    -28,797
                                    -18.4%
VOC
                                    -4,342
                                     -4.9%
                                    -13,326
                                    -13.8%
                                    -18,273
                                    -16.1%

    Downstream Impacts of the Proposed Program and Alternative 4
Both the proposed program and Alternative 4 would impact the downstream emissions of non-GHG pollutants.  These pollutants include oxides of nitrogen (NOX), oxides of sulfur (SOX), volatile organic compounds (VOC), carbon monoxide (CO), fine particulate matter (PM2.5), and air toxics.  The agencies are expecting reductions in downstream emissions of NOX, VOC, SOX, CO, and air toxics.  Much of these estimated net reductions are a result of the agencies' anticipation of increased use of auxiliary power units (APUs) in combination tractors during extended idling; APUs emit these pollutants at a lower rate than on-road engines during extended idle operation, with the exception of PM2.5.  Additional reductions in tailpipe emissions of NOx and CO and refueling emissions of VOC would be achieved through improvements in engine efficiency and reduced road load (improved aerodynamics and tire rolling resistance), which reduces the amount of work required to travel a given distance and increases fuel economy.  For vehicle types not affected by road load improvements, such as HD pickups and vans, non-GHG emissions would increase very slightly due to VMT rebound.  In addition, brake wear and tire wear emissions of PM2.5 would also increase very slightly due to VMT rebound.  The agencies estimate that downstream emissions of SOx would be reduced, because they are roughly proportional to fuel consumption.  Alternative 4 would have directionally similar effects as the preferred alternative.
For vocational vehicles and tractor-trailers, agencies used MOVES to determine non-GHG emissions impacts of the proposed rules and Alternative 4, relative to the less dynamic baseline (Alternative 1a).  The improvements in engine efficiency and road load, the increased use of APUs, and VMT rebound were included in the MOVES analysis.  For this analysis, Method B also used the MOVES model for HD pickups and vans.  (Note that for the comparable analysis as described in Section VIII. A. (1), Method A used DOT's CAFE model).  Further information about the modeling using DOT's CAFE and MOVES model is available in Section VII and Chapter 5 of the draft RIA.  
The downstream criteria pollutant and air toxics impacts of the Preferred Alternative and Alternative 4, relative to Alternative 1a, are presented in Table VIII-15 and Table VIII-16, respectively.
Table VIII-15 Annual Downstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method B
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                      -8
                                     -2.6%
                                      -22
                                    -15.1%
                                      -31
                                    -19.6%
Acetaldehyde 
                                     -670
                                    -10.3%
                                    -1,884
                                    -31.0%
                                    -2,671
                                    -36.5%
Acrolein 
                                      -97
                                     -9.9%
                                     -272
                                    -31.6%
                                     -385
                                    -37.3%
Benzene 
                                     -125
                                     -5.9%
                                     -353
                                    -21.0%
                                     -501
                                    -25.7%
CO 
                                    -25,824
                                     -1.7%
                                    -72,960
                                     -6.0%
                                   -103,887
                                     -7.6%
Formaldehyde 
                                    -2,102
                                    -11.5%
                                    -5,911
                                    -32.1%
                                    -8,379
                                    -37.5%
NOx  
                                    -93,220
                                     -7.5%
                                   -267,125
                                    -29.1%
                                   -380,721
                                    -35.2%
PM2.5[a]  
                                      634
                                     1.6%
                                     1,631
                                     7.6%
                                     2,257
                                     9.1%
SOx  
                                     -254
                                     -4.8%
                                     -876
                                    -15.0%
                                    -1,264
                                    -18.1%
VOC
                                    -13,440
                                     -6.4%
                                    -40,148
                                    -21.7%
                                    -57,308
                                    -26.1%
Note:
[a] Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and brake wear are included. 

Table VIII-16 Annual Downstream Impacts on Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method B
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                      -8
                                     -2.6%
                                      -22
                                    -15.1%
                                      -31
                                    -19.6%
Acetaldehyde 
                                     -670
                                    -10.3%
                                    -1,884
                                    -31.0%
                                    -2,671
                                    -36.5%
Acrolein 
                                      -97
                                     -9.9%
                                     -272
                                    -31.6%
                                     -385
                                    -37.3%
Benzene 
                                     -126
                                     -5.9%
                                     -354
                                    -21.0%
                                     -501
                                    -25.7%
CO 
                                    -25,919
                                     -1.7%
                                    -73,041
                                     -6.0%
                                   -103,891
                                     -7.6%
Formaldehyde 
                                    -2,101
                                    -11.5%
                                    -5,910
                                    -32.1%
                                    -8,378
                                    -37.5%
NOx  
                                    -94,787
                                     -7.6%
                                   -268,373
                                    -29.2%
                                   -380,810
                                    -35.2%
PM2.5[a]  
                                      610
                                     1.5%
                                     1,611
                                     7.5%
                                     2,256
                                     9.1%
SOx  
                                     -313
                                     -5.9%
                                     -909
                                    -15.6%
                                    -1,267
                                    -18.1%
VOC
                                    -14,310
                                     -6.8%
                                    -40,640
                                    -22.0%
                                    -57,348
                                    -26.1%
Note:
[a] Positive number means emissions would increase from reference to control case. PM2.5 from tire wear and brake wear are included. 

As shown in Table VIII-15, a net increase in downstream PM2.5 emissions is expected.  Although the improvements in engine efficiency and road load are expected to reduce tailpipe emissions of PM2.5, the projected increased use of APUs would lead to higher PM2.5 emissions that more than offset the reductions from the tailpipe, since engines powering APUs are currently required to meet less stringent PM standards than on-road engines.  Therefore, EPA conducted an evaluation of a program that would reduce the unintended consequence of increase in PM2.5 emissions from increased APU use by fitting the APU with a diesel particulate filter or having the APU exhaust plumbed into the vehicle's exhaust system upstream of the particulate matter aftertreatment device.  Such program requiring additional PM2.5 controls on APU could significantly reduce PM2.5 emissions, as shown in Table VIII-17 below.  For additional details, see Section III.C.3 of the preamble.  
Table VIII-17 Projected Impact on PM2.5 Emissions of Further PM2.5 Control on APUs  -  Preferred Alternative vs. Alt 1a using Analysis Method B (US Short Tons)
CY
Proposed program inventory without further PM2.5 control on APUs
Proposed program inventory with further PM2.5 control on APUs
Net impact of further PM2.5 control on APUs
2035
                                    23,083
                                    19,999
                                    -3,084
2050
                                    26,932
                                    22,588
                                    -4,344

It is worth noting that the emission reductions shown in Table VIII-15 are not incremental to the emissions reductions projected in the Phase 1 rulemaking.  This is because, as described in Sections III.D.2.a of the preamble, the agencies have revised their assumptions about the adoption rate of APUs.  This proposal assumes that without the proposed Phase 2 program (i.e., in the Phase 2 reference case), the APU adoption rate will be 30 percent for model years 2010 and later, which is the value used in the Phase 1 reference case.  EPA conducted an analysis to estimate the combined emissions impacts of the Phase 1 and the proposed Phase 2 programs for NOX, VOC, SOX and PM2.5 in calendar year 2050 using MOVES2014.  The results are shown in Table VIII-18.  For additional details, see Chapter 5 of the draft RIA.
Table VIII-18 Combined Phase 1 and Phase 2 Annual Downstream Impacts on Criteria Pollutants from Heavy-Duty Sector in Calendar Year 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method B (US Short Tons)
                                      CY
                                      NOX
                                      VOC
                                      SOX
                                   PM2.5 [a]
                                     2050
                                    403,915
                                    69,415
                                     2,111
                                    -1,890
          Note:
          [a] Positive number reflects an increase in emissions. 



    Total Impacts of the Proposed Program and Alternative 4
As shown in Table VIII-19 and Table VIII-20, agencies estimate that both the proposed program and Alternative 4 would result in overall net reductions of NOX, VOC, SOX, CO, PM2.5, and air toxics emissions.  The downstream increase in PM2.5 due to APU use is expected to be more than offset by reductions in PM2.5 from upstream.  The results are shown both in changes in absolute tons and in percent reductions from the less dynamic reference to the alternatives for the heavy-duty sector.   By 2050, the total impacts of the proposed program and Alternative 4 on criteria pollutants and air toxics are indistinguishable.  
Table VIII-19 Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Preferred Alternative vs. Alt 1a using Analysis Method B
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                      -9
                                     -2.7%
                                      -25
                                    -15.1%
                                      -36
                                    -19.4%
Acetaldehyde 
                                     -674
                                    -10.1%
                                    -1,902
                                    -30.5%
                                    -2,697
                                    -36.0%
Acrolein 
                                      -97
                                     -9.8%
                                     -274
                                    -31.3%
                                     -388
                                    -36.9%
Benzene 
                                     -149
                                     -5.4%
                                     -445
                                    -18.8%
                                     -633
                                    -22.9%
CO 
                                    -29,622
                                     -1.9%
                                    -85,961
                                     -6.6%
                                   -122,659
                                     -8.4%
Formaldehyde 
                                    -2,121
                                    -11.4%
                                    -5,978
                                    -31.7%
                                    -8,475
                                    -37.0%
NOx  
                                   -102,502
                                     -7.2%
                                   -298,907
                                    -26.6%
                                   -426,610
                                    -32.1%
PM2.5  
                                     -386
                                     -0.6%
                                    -1,883
                                     -4.2%
                                    -2,815
                                     -5.4%
SOx  
                                    -6,070
                                     -4.9%
                                    -20,777
                                    -15.3%
                                    -30,000
                                    -18.4%
VOC
                                    -16,724
                                     -5.6%
                                    -52,872
                                    -18.8%
                                    -75,521
                                    -22.7%


Table VIII-20 Annual Total Impacts (Upstream and Downstream) of Criteria Pollutants and Air Toxics from Heavy-Duty Sector in Calendar Years 2025, 2035 and 2050  -  Alternative 4 vs. Alt 1a using Analysis Method B
Pollutant
                                    CY2025
                                    CY2035
                                    CY2050

                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
                                 US Short Tons
                                  % Reduction
1,3-Butadiene 
                                      -9
                                     -2.8%
                                      -26
                                    -15.2%
                                      -36
                                    -19.4%
Acetaldehyde 
                                     -676
                                    -10.1%
                                    -1,903
                                    -30.6%
                                    -2,697
                                    -36.0%
Acrolein 
                                      -97
                                     -9.8%
                                     -274
                                    -31.3%
                                     -388
                                    -36.9%
Benzene 
                                     -157
                                     -5.7%
                                     -450
                                    -18.9%
                                     -634
                                    -22.9%
CO 
                                    -30,580
                                     -1.9%
                                    -86,526
                                     -6.6%
                                   -122,703
                                     -8.4%
Formaldehyde 
                                    -2,125
                                    -11.4%
                                    -5,980
                                    -31.7%
                                    -8,476
                                    -37.0%
NOx  
                                   -106,180
                                     -7.4%
                                   -301,339
                                    -26.8%
                                   -426,796
                                    -32.1%
PM2.5  
                                     -646
                                     -1.1%
                                    -2,036
                                     -4.6%
                                    -2,827
                                     -5.4%
SOx  
                                    -7,450
                                     -6.1%
                                    -21,550
                                    -15.9%
                                    -30,064
                                    -18.4%
VOC
                                    -18,652
                                     -6.2%
                                    -53,966
                                    -19.2%
                                    -75,621
                                    -22.7%

         Health Effects of Non-GHG Pollutants
In this section, we discuss health effects associated with exposure to some of the criteria and air toxic pollutants impacted by the proposed and alternative heavy-duty vehicle standards. 
Particulate Matter
    Background
Particulate matter is a highly complex mixture of solid particles and liquid droplets distributed among numerous atmospheric gases which interact with solid and liquid phases. Particles range in size from those smaller than 1 nanometer (10[-9] meter) to over 100 micrometer (um, or 10[-6] meter) in diameter (for reference, a typical strand of human hair is 70 um in diameter and a grain of salt is about 100 um).  Atmospheric particles can be grouped into several classes according to their aerodynamic and physical sizes.  Generally, the three broad classes of particles considered by EPA include ultrafine particles (UFP, aerodynamic diameter <0.1 um), "fine" particles (PM2.5; particles with a nominal mean aerodynamic diameter less than or equal to 2.5 um), and "thoracic" particles (PM10; particles with a nominal mean aerodynamic diameter less than or equal to 10 um).  Particles that fall within the size range between PM2.5 and PM10, are referred to as "thoracic coarse particles" (PM10-2.5, particles with a nominal mean aerodynamic diameter less than or equal to 10 um and greater than 2.5 um).  EPA currently has standards that regulate PM2.5 and PM10.  
Particles span many sizes and shapes and may consist of hundreds of different chemicals. Particles are emitted directly from sources and are also formed through atmospheric chemical reactions; the former are often referred to as "primary" particles, and the latter as "secondary" particles.  Particle concentration and composition varies by time of year and location, and in addition to differences in source emissions, is affected by several weather-related factors, such as temperature, clouds, humidity, and wind. A further layer of complexity comes from particles' ability to shift between solid/liquid and gaseous phases, which is influenced by concentration and meteorology, especially temperature.  
Fine particles are produced primarily by combustion processes and by transformations of gaseous emissions (e.g., sulfur oxides (SOX), oxides of nitrogen, and volatile organic compounds (VOC)) in the atmosphere.  The chemical and physical properties of PM2.5 may vary greatly with time, region, meteorology, and source category. Thus, PM2.5 may include a complex mixture of different components including sulfates, nitrates, organic compounds, elemental carbon and metal compounds.  These particles can remain in the atmosphere for days to weeks and travel hundreds to thousands of kilometers.
    Health Effects of PM
Scientific studies show ambient PM is associated with a broad range of health effects.  These health effects are discussed in detail in the December 2009 Integrated Science Assessment for Particulate Matter (PM ISA).  The PM ISA summarizes health effects evidence associated with both short- and long-term exposures to PM2.5, PM10-2.5, and ultrafine particles.  The PM ISA concludes that human exposures to ambient PM2.5 concentrations are associated with a number of adverse health effects and characterizes the weight of evidence for these health outcomes.  The discussion below highlights the PM ISA's conclusions pertaining to health effects associated with both short- and long-term PM exposures.  Further discussion of health effects associated with PM2.5 can also be found in the rulemaking documents for the most recent review of the PM NAAQS completed in 2012.[,]
EPA has concluded that a causal relationship exists between both long- and short-term exposures to PM2.5 and premature mortality and cardiovascular effects and a likely causal relationship exists between long- and short-term PM2.5 exposures and respiratory effects.  Further, there is evidence suggestive of a causal relationship between long-term PM2.5 exposures and other health effects, including developmental and reproductive effects (e.g., low birth weight, infant mortality) and carcinogenic, mutagenic, and genotoxic effects (e.g., lung cancer mortality).
As summarized in the Final PM NAAQS rule, and discussed extensively in the 2009 PM ISA, the available scientific evidence significantly strengthens the link between long- and short-term exposure to PM2.5 and premature mortality, while providing indications that the magnitude of the PM2.5- mortality association with long-term exposures may be larger than previously estimated. [,]  The strongest evidence comes from recent studies investigating long-term exposure to PM2.5 and cardiovascular-related mortality.  The evidence supporting a causal relationship between long-term PM2.5 exposure and mortality also includes consideration of new studies that demonstrated an improvement in community health following reductions in ambient fine particles.
Several studies evaluated in the 2009 PM ISA have examined the association between cardiovascular effects and long-term PM2.5 exposures in multi-city epidemiological studies conducted in the U.S. and Europe.  These studies have provided new evidence linking long-term exposure to PM2.5 with an array of cardiovascular effects such as heart attacks, congestive heart failure, stroke, and mortality.  This evidence is coherent with studies of effects associated with short-term exposure to PM2.5 that have observed associations with a continuum of effects ranging from subtle changes in indicators of cardiovascular health to serious clinical events, such as increased hospitalizations and emergency department visits due to cardiovascular disease and cardiovascular mortality.
As detailed in the 2009 PM ISA, extended analyses of seminal epidemiological studies, as well as more recent epidemiological studies conducted in the U.S. and abroad, provide strong evidence of respiratory-related morbidity effects associated with long-term PM2.5 exposure.  The strongest evidence for respiratory-related effects is from studies that evaluated decrements in lung function growth (in children), increased respiratory symptoms, and asthma development.  The strongest evidence from short-term PM2.5 exposure studies has been observed for increased respiratory-related emergency department visits and hospital admissions for chronic obstructive pulmonary disease (COPD) and respiratory infections.
The body of scientific evidence detailed in the 2009 PM ISA is still limited with respect to associations between long-term PM2.5 exposures and developmental and reproductive effects as well as cancer, mutagenic, and genotoxic effects.  The strongest evidence for an association between PM2.5 and developmental and reproductive effects comes from epidemiological studies of low birth weight and infant mortality, especially due to respiratory causes during the post-neonatal period (i.e., 1 month to 12 months of age).   With regard to cancer effects, ``[m]ultiple epidemiologic studies have shown a consistent positive association between PM2.5 and lung cancer mortality, but studies have generally not reported associations between PM2.5 and lung cancer incidence.'' 
Specific groups within the general population are at increased risk for experiencing adverse health effects related to PM exposures.[,][,][,]   The evidence detailed in the 2009 PM ISA expands our understanding of previously identified at-risk populations and lifestages (i.e., children, older adults, and individuals with pre-existing heart and lung disease) and supports the identification of additional at-risk populations (e.g., persons with lower socioeconomic status, genetic differences). Additionally, there is emerging, though still limited, evidence for additional potentially at-risk populations and lifestages, such as those with diabetes, people who are obese, pregnant women, and the developing fetus. 
For PM10-2.5, the 2009 PM ISA concluded that available evidence was suggestive of a causal relationship between short-term exposures to PM10-2.5 and cardiovascular effects (e.g., hospital admissions and ED visits, changes in cardiovascular function), respiratory effects (e.g., ED visits and hospital admissions, increase in markers of pulmonary inflammation), and premature mortality.  Data were inadequate to draw conclusions regarding the relationships between long-term exposure to PM10-2.5 and various health effects. [,][,]
For ultrafine particles, the 2009 PM ISA concluded that the evidence was suggestive of a causal relationship between short-term exposures and cardiovascular effects, including changes in heart rhythm and vasomotor function (the ability of blood vessels to expand and contract).  It also concluded that there was evidence suggestive of a causal relationship between short-term exposure to ultrafine particles and respiratory effects, including lung function and pulmonary inflammation, with limited and inconsistent evidence for increases in ED visits and hospital admissions.  Data were inadequate to draw conclusions regarding the relationship between short-term exposure to ultrafine particle and additional health effects including premature mortality as well as long-term exposure to ultrafine particles and all health outcomes evaluated.[,]
Ozone 
    Background
Ground-level ozone pollution is typically formed through reactions involving VOC and NOX in the lower atmosphere in the presence of sunlight.  These pollutants, often referred to as ozone precursors, are emitted by many types of pollution sources, such as highway and nonroad motor vehicles and engines, power plants, chemical plants, refineries, makers of consumer and commercial products, industrial facilities, and smaller area sources.
The science of ozone formation, transport, and accumulation is complex.  Ground-level ozone is produced and destroyed in a cyclical set of chemical reactions, many of which are sensitive to temperature and sunlight.  When ambient temperatures and sunlight levels remain high for several days and the air is relatively stagnant, ozone and its precursors can build up and result in more ozone than typically occurs on a single high-temperature day.  Ozone and its precursors can be transported hundreds of miles downwind from precursor emissions, resulting in elevated ozone levels even in areas with low local VOC or NOX emissions.
    Health Effects of Ozone
This section provides a summary of the health effects associated with exposure to ambient concentrations of ozone.  The information in this section is based on the information and conclusions in the February 2013 Integrated Science Assessment for Ozone (Ozone ISA).  The Ozone ISA concludes that human exposures to ambient concentrations of ozone are associated with a number of adverse health effects and characterizes the weight of evidence for these health effects.   The discussion below highlights the Ozone ISA's conclusions pertaining to health effects associated with both short-term and long-term periods of exposure to ozone.
For short-term exposure to ozone, the Ozone ISA concludes that respiratory effects, including lung function decrements, pulmonary inflammation, exacerbation of asthma, respiratory-related hospital admissions, and mortality, are causally associated with ozone exposure.  It also concludes that cardiovascular effects, including decreased cardiac function and increased vascular disease, and total mortality are likely to be causally associated with short-term exposure to ozone and that evidence is suggestive of a causal relationship between central nervous system effects and short-term exposure to ozone.  
For long-term exposure to ozone, the Ozone ISA concludes that respiratory effects, including new onset asthma, pulmonary inflammation and injury, are likely to be causally related with ozone exposure.  The Ozone ISA characterizes the evidence as suggestive of a causal relationship for associations between long-term ozone exposure and cardiovascular effects, reproductive and developmental effects, central nervous system effects and total mortality.  The evidence is inadequate to infer a causal relationship between chronic ozone exposure and increased risk of lung cancer.
Finally, interindividual variation in human responses to ozone exposure can result in some groups being at increased risk for detrimental effects in response to exposure. The Ozone ISA identified several groups that are at increased risk for ozone-related health effects.  These groups are people with asthma, children and older adults, individuals with reduced intake of certain nutrients (i.e., Vitamins C and E), outdoor workers, and individuals having certain genetic variants related to oxidative metabolism or inflammation. Ozone exposure during childhood can have lasting effects through adulthood.  Such effects include altered function of the respiratory and immune systems.  Children absorb higher doses (normalized to lung surface area) of ambient ozone, compared to adults, due to their increased time spent outdoors, higher ventilation rates relative to body size, and a tendency to breathe a greater fraction of air through the mouth. Children also have a higher asthma prevalence compared to adults. Additional children's vulnerability and susceptibility factors are listed in Section XIV.
Nitrogen Oxides  
    Background
Nitrogen dioxide (NO2) is a member of the NOX family of gases.  Most NO2 is formed in the air through the oxidation of nitric oxide (NO) emitted when fuel is burned at a high temperature.  NO2 and its gas phase oxidation products can dissolve in water droplets and further oxidize to form nitric acid which reacts with ammonia to form nitrates, which are important components of ambient PM.  The health effects of ambient PM are discussed in Section VIII.B.1.b of this preamble.  NOX and VOC are the two major precursors of ozone.  The health effects of ozone are covered in Section VIII.B.2.b.
    Health Effects of Nitrogen Oxides
The most recent review of the health effects of oxides of nitrogen completed by EPA can be found in the 2008 Integrated Science Assessment for Oxides of Nitrogen - Health Criteria (Oxides of Nitrogen ISA).  EPA concluded that the findings of epidemiological, controlled human exposure, and animal toxicological studies provided evidence that was sufficient to infer a likely causal relationship between respiratory effects and short-term NO2 exposure.  The 2008 ISA for Oxides of Nitrogen concluded that the strongest evidence for such a relationship comes from epidemiological studies of respiratory effects including increased respiratory symptoms, emergency department visits, and hospital admissions.  Based on both short- and long-term exposure studies, the 2008 ISA for Oxides of Nitrogen concluded that individuals with preexisting pulmonary conditions (e.g., asthma or COPD), children, and older adults are potentially at greater risk of NO2-related respiratory effects.  Based on findings from controlled human exposure studies, the 2008 ISA for Oxides of Nitrogen also drew two broad conclusions regarding airway responsiveness following NO2 exposure.  First, the ISA concluded that NO2 exposure may enhance the sensitivity to allergen-induced decrements in lung function and increase the allergen-induced airway inflammatory response following 30-minute exposures of asthmatic adults to NO2 concentrations as low as 260 ppb.  Second, exposure to NO2 was found to enhance the inherent responsiveness of the airway to subsequent nonspecific challenges in controlled human exposure studies of healthy and asthmatic adults.  Statistically significant increases in nonspecific airway responsiveness were reported for asthmatic adults following 30-minute exposures to 200-300 ppb NO2 and following 1-hour exposures to 100 ppb NO2.  Enhanced airway responsiveness could have important clinical implications for asthmatics since transient increases in airway responsiveness following NO2 exposure have the potential to increase symptoms and worsen asthma control.  Together, the epidemiological and experimental data sets formed a plausible, consistent, and coherent description of a relationship between NO2 exposures and an array of adverse health effects that range from the onset of respiratory symptoms to hospital admissions and emergency department visits for respiratory causes, especially asthma.  
In evaluating a broader range of health effects, the 2008  ISA for Oxides of Nitrogen concluded evidence was "suggestive but not sufficient to infer a causal relationship" between short-term NO2 exposure and premature mortality and between long-term NO2 exposure and respiratory effects.  The latter was based largely on associations observed between long-term NO2 exposure and decreases in lung function growth in children.  Furthermore, the 2008 ISA for Oxides of Nitrogen concluded that evidence was "inadequate to infer the presence or absence of a causal relationship" between short-term NO2 exposure and cardiovascular effects as well as between long-term NO2 exposure and cardiovascular effects, reproductive and developmental effects, premature mortality, and cancer.  The conclusions for these health effect categories were informed by uncertainties in the evidence base such as the independent effects of NO2 exposure within the broader mixture of traffic-related pollutants, limited evidence from experimental studies, and/or an overall limited literature base.
Sulfur Oxides
    Background
Sulfur dioxide (SO2), a member of the sulfur oxide (SOX) family of gases, is formed from burning fuels containing sulfur (e.g., coal or oil derived), extracting gasoline from oil, or extracting metals from ore.  SO2 and its gas phase oxidation products can dissolve in water droplets and further oxidize to form sulfuric acid which reacts with ammonia to form sulfates, which are important components of ambient PM.  The health effects of ambient PM are discussed in Section VIII.B.1.b of this preamble.  
    Health Effects of SO2
Information on the health effects of SO2 can be found in the 2008 Integrated Science Assessment for Sulfur Oxides  -  Health Criteria (SOX ISA).  Short-term peaks of SO2 have long been known to cause adverse respiratory health effects, particularly among individuals with asthma.  In addition to those with asthma (both children and adults), potentially sensitive groups include all children and the elderly.  During periods of elevated ventilation, asthmatics may experience symptomatic bronchoconstriction within minutes of exposure.  Following an extensive evaluation of health evidence from epidemiologic and laboratory studies, EPA concluded that there is a causal relationship between respiratory health effects and short-term exposure to SO2.  Separately, based on an evaluation of the epidemiologic evidence of associations between short-term exposure to SO2 and mortality, EPA concluded that the overall evidence is suggestive of a causal relationship between short-term exposure to SO2 and mortality.  Additional information on the health effects of SO2 is available in Chapter 6.1.1.4.2 of the RIA.
Carbon Monoxide  
    Background
Carbon monoxide (CO) is a colorless, odorless gas emitted from combustion processes.  Nationally and, particularly in urban areas, the majority of CO emissions to ambient air come from mobile sources.
    Health Effects of Carbon Monoxide
Information on the health effects of CO can be found in the January 2010 Integrated Science Assessment for Carbon Monoxide (CO ISA).  The CO ISA concludes that ambient concentrations of CO are associated with a number of adverse health effects.  This section provides a summary of the health effects associated with exposure to ambient concentrations of CO.  
Controlled human exposure studies of subjects with coronary artery disease show a decrease in the time to onset of exercise-induced angina (chest pain) and electrocardiogram changes following CO exposure.  In addition, epidemiologic studies show associations between short-term CO exposure and cardiovascular morbidity, particularly increased emergency room visits and hospital admissions for coronary heart disease (including ischemic heart disease, myocardial infarction, and angina).  Some epidemiologic evidence is also available for increased hospital admissions and emergency room visits for congestive heart failure and cardiovascular disease as a whole.  The CO ISA concludes that a causal relationship is likely to exist between short-term exposures to CO and cardiovascular morbidity.  It also concludes that available data are inadequate to conclude that a causal relationship exists between long-term exposures to CO and cardiovascular morbidity.  
Animal studies show various neurological effects with in-utero CO exposure.  Controlled human exposure studies report central nervous system and behavioral effects following low-level CO exposures, although the findings have not been consistent across all studies.  The CO ISA concludes the evidence is suggestive of a causal relationship with both short- and long-term exposure to CO and central nervous system effects.
A number of studies cited in the CO ISA have evaluated the role of CO exposure in birth outcomes such as preterm birth or cardiac birth defects.  The epidemiologic studies provide limited evidence of a CO-induced effect on preterm births and birth defects, with weak evidence for a decrease in birth weight.  Animal toxicological studies have found perinatal CO exposure to affect birth weight, as well as other developmental outcomes.  The CO ISA concludes the evidence is suggestive of a causal relationship between long-term exposures to CO and developmental effects and birth outcomes.
Epidemiologic studies provide evidence of associations between ambient CO concentrations and respiratory morbidity such as changes in pulmonary function, respiratory symptoms, and hospital admissions.  A limited number of epidemiologic studies considered copollutants such as ozone, SO2, and PM in two-pollutant models and found that CO risk estimates were generally robust, although this limited evidence makes it difficult to disentangle effects attributed to CO itself from those of the larger complex air pollution mixture.  Controlled human exposure studies have not extensively evaluated the effect of CO on respiratory morbidity.  Animal studies at levels of 50-100 ppm CO show preliminary evidence of altered pulmonary vascular remodeling and oxidative injury.  The CO ISA concludes that the evidence is suggestive of a causal relationship between short-term CO exposure and respiratory morbidity, and inadequate to conclude that a causal relationship exists between long-term exposure and respiratory morbidity.  
Finally, the CO ISA concludes that the epidemiologic evidence is suggestive of a causal relationship between short-term concentrations of CO and mortality.  Epidemiologic studies provide evidence of an association between short-term exposure to CO and mortality, but limited evidence is available to evaluate cause-specific mortality outcomes associated with CO exposure.  In addition, the attenuation of CO risk estimates which was often observed in copollutant models contributes to the uncertainty as to whether CO is acting alone or as an indicator for other combustion-related pollutants.  The CO ISA also concludes that there is not likely to be a causal relationship between relevant long-term exposures to CO and mortality.
Diesel Exhaust
    Background
Diesel exhaust consists of a complex mixture composed of carbon dioxide, oxygen, nitrogen, water vapor, carbon monoxide, nitrogen compounds, sulfur compounds and numerous low-molecular-weight hydrocarbons.  A number of these gaseous hydrocarbon components are individually known to be toxic, including aldehydes, benzene and 1,3-butadiene.  The diesel particulate matter present in diesel exhaust consists mostly of fine particles (< 2.5 um), of which a significant fraction is ultrafine particles (< 0.1 um).  These particles have a large surface area which makes them an excellent medium for adsorbing organics and their small size makes them highly respirable.  Many of the organic compounds present in the gases and on the particles, such as polycyclic organic matter, are individually known to have mutagenic and carcinogenic properties.  
Diesel exhaust varies significantly in chemical composition and particle sizes between different engine types (heavy-duty, light-duty), engine operating conditions (idle, accelerate, decelerate), and fuel formulations (high/low sulfur fuel).  Also, there are emissions differences between on-road and nonroad engines because the nonroad engines are generally of older technology.  After being emitted in the engine exhaust, diesel exhaust undergoes dilution as well as chemical and physical changes in the atmosphere.  The lifetime for some of the compounds present in diesel exhaust ranges from hours to days.
    Health Effects of Diesel Exhaust
In EPA's 2002 Diesel Health Assessment Document (Diesel HAD), exposure to diesel exhaust was classified as likely to be carcinogenic to humans by inhalation from environmental exposures, in accordance with the revised draft 1996/1999 EPA cancer guidelines.[,]  A number of other agencies (National Institute for Occupational Safety and Health, the International Agency for Research on Cancer, the World Health Organization, California EPA, and the U.S. Department of Health and Human Services) had made similar hazard classifications prior to 2002.  EPA also concluded in the 2002 Diesel HAD that it was not possible to calculate a cancer unit risk for diesel exhaust due to limitations in the exposure data for the occupational groups or the absence of a dose-response relationship. 
In the absence of a cancer unit risk, the Diesel HAD sought to provide additional insight into the significance of the diesel exhaust cancer hazard by estimating possible ranges of risk that might be present in the population.  An exploratory analysis was used to characterize a range of possible lung cancer risk.  The outcome was that environmental risks of cancer from long-term diesel exhaust exposures could plausibly range from as low as 10[-5] to as high as 10[-3].  Because of uncertainties, the analysis acknowledged that the risks could be lower than 10[-5], and a zero risk from diesel exhaust exposure could not be ruled out.
Non-cancer health effects of acute and chronic exposure to diesel exhaust emissions are also of concern to EPA.  EPA derived a diesel exhaust reference concentration (RfC) from consideration of four well-conducted chronic rat inhalation studies showing adverse pulmonary effects.  The RfC is 5 ug/m[3] for diesel exhaust measured as diesel particulate matter.  This RfC does not consider allergenic effects such as those associated with asthma or immunologic or the potential for cardiac effects.  There was emerging evidence in 2002, discussed in the Diesel HAD, that exposure to diesel exhaust can exacerbate these effects, but the exposure-response data were lacking at that time to derive an RfC based on these then emerging considerations.  EPA Diesel HAD states, "With [diesel particulate matter] being a ubiquitous component of ambient PM, there is an uncertainty about the adequacy of the existing [diesel exhaust] noncancer database to identify all of the pertinent [diesel exhaust]-caused noncancer health hazards."  The Diesel HAD also notes "that acute exposure to [diesel exhaust] has been associated with irritation of the eye, nose, and throat, respiratory symptoms (cough and phlegm), and neurophysiological symptoms such as headache, lightheadedness, nausea, vomiting, and numbness or tingling of the extremities."  The Diesel HAD noted that the cancer and noncancer hazard conclusions applied to the general use of diesel engines then on the market and as cleaner engines replace a substantial number of existing ones, the applicability of the conclusions would need to be reevaluated.  
It is important to note that the Diesel HAD also briefly summarizes health effects associated with ambient PM and discusses EPA's then-annual PM2.5 NAAQS of 15 ug/m[3].  In 2012, EPA revised the annual PM2.5 NAAQS to 12 ug/m[3].  There is a large and extensive body of human data showing a wide spectrum of adverse health effects associated with exposure to ambient PM, of which diesel exhaust is an important component.  The PM2.5 NAAQS is designed to provide protection from the noncancer health effects and premature mortality attributed to exposure to PM2.5. The contribution of diesel PM to total ambient PM varies in different regions of the country and also, within a region, from one area to another.  The contribution can be high in near-roadway environments, for example, or in other locations where diesel engine use is concentrated.  
Since 2002, several new studies have been published which continue to report increased lung cancer risk with occupational exposure to diesel exhaust from older engines.  Of particular note since 2011 are three new epidemiology studies which have examined lung cancer in occupational populations, for example, truck drivers, underground nonmetal miners and other diesel motor related occupations.  These studies reported increased risk of lung cancer with exposure to diesel exhaust with evidence of positive exposure-response relationships to varying degrees.[,][,]  These newer studies (along with others that have appeared in the scientific literature) add to the evidence EPA evaluated in the 2002 Diesel HAD and further reinforces the concern that diesel exhaust exposure likely poses a lung cancer hazard. The findings from these newer studies do not necessarily apply to newer technology diesel engines since the newer engines have large reductions in the emission constituents compared to older technology diesel engines.    
In light of the growing body of scientific literature evaluating the health effects of exposure to diesel exhaust, in June 2012 the World Health Organization's International Agency for Research on Cancer (IARC), a recognized international authority on the carcinogenic potential of chemicals and other agents, evaluated the full range of cancer related health effects data for diesel engine exhaust.  IARC concluded that diesel exhaust should be regarded as "carcinogenic to humans."  This designation was an update from its 1988 evaluation that considered the evidence to be indicative of a "probable human carcinogen." 
Air Toxics
    Background
Heavy-duty vehicle emissions contribute to ambient levels of air toxics known or suspected as human or animal carcinogens, or that have noncancer health effects.  The population experiences an elevated risk of cancer and other noncancer health effects from exposure to the class of pollutants known collectively as "air toxics."  These compounds include, but are not limited to, benzene, 1, 3-butadiene, formaldehyde, acetaldehyde, acrolein, polycyclic organic matter, and naphthalene.  These compounds were identified as national or regional risk drivers or contributors in the 2005 National-scale Air Toxics Assessment and have significant inventory contributions from mobile sources.
    Benzene
EPA's Integrated Risk Information System (IRIS) database lists benzene as a known human carcinogen (causing leukemia) by all routes of exposure, and concludes that exposure is associated with additional health effects, including genetic changes in both humans and animals and increased proliferation of bone marrow cells in mice.,,  EPA states in its IRIS database that data indicate a causal relationship between benzene exposure and acute lymphocytic leukemia and suggest a relationship between benzene exposure and chronic non-lymphocytic leukemia and chronic lymphocytic leukemia.  EPA's IRIS documentation for benzene also lists a range of 2.2 x 10[-6] to 7.8 x 10[-6] as the unit risk estimate (URE) for benzene.[,]  The International Agency for Research on Carcinogens (IARC) has determined that benzene is a human carcinogen and the U.S. Department of Health and Human Services (DHHS) has characterized benzene as a known human carcinogen.,    
A number of adverse noncancer health effects including blood disorders, such as pre leukemia and aplastic anemia, have also been associated with long-term exposure to benzene.,  The most sensitive noncancer effect observed in humans, based on current data, is the depression of the absolute lymphocyte count in blood.[,]  EPA's inhalation reference concentration (RfC) for benzene is 30 ug/m[3].  The RfC is based on suppressed absolute lymphocyte counts seen in humans under occupational exposure conditions.  In addition, recent work, including studies sponsored by the Health Effects Institute, provides evidence that biochemical responses are occurring at lower levels of benzene exposure than previously known.,,,  EPA's IRIS program has not yet evaluated these new data.  EPA does not currently have an acute reference concentration for benzene.  The Agency for Toxic Substances and Disease Registry (ATSDR) Minimal Risk Level (MRL) for acute exposure to benzene is 29 ug/m[3] for 1-14 days exposure.[,]
    1,3-Butadiene
EPA has characterized 1,3-butadiene as carcinogenic to humans by inhalation.,  The IARC has determined that 1,3-butadiene is a human carcinogen and the U.S. DHHS has characterized 1,3-butadiene as a known human carcinogen.,,  There are numerous studies consistently demonstrating that 1,3-butadiene is metabolized into genotoxic metabolites by experimental animals and humans.  The specific mechanisms of 1,3-butadiene-induced carcinogenesis are unknown; however, the scientific evidence strongly suggests that the carcinogenic effects are mediated by genotoxic metabolites.  Animal data suggest that females may be more sensitive than males for cancer effects associated with 1,3-butadiene exposure; there are insufficient data in humans from which to draw conclusions about sensitive subpopulations.  The URE for 1,3-butadiene is 3 x 10[-5] per ug/m[3].  1,3-butadiene also causes a variety of reproductive and developmental effects in mice; no human data on these effects are available.  The most sensitive effect was ovarian atrophy observed in a lifetime bioassay of female mice.  Based on this critical effect and the benchmark concentration methodology, an RfC for chronic health effects was calculated at 0.9 ppb (approximately 2 ug/m[3]).
    Formaldehyde
In 1991, EPA concluded that formaldehyde is a carcinogen based on nasal tumors in animal bioassays.  An Inhalation URE for cancer and a Reference Dose for oral noncancer effects were developed by the agency and posted on the IRIS database.  Since that time, the National Toxicology Program (NTP) and International Agency for Research on Cancer (IARC) have concluded that formaldehyde is a known human carcinogen.[,]
The conclusions by IARC and NTP reflect the results of epidemiologic research published since 1991 in combination with previous animal, human and mechanistic evidence.  Research conducted by the National Cancer Institute reported an increased risk of nasopharyngeal cancer and specific lymph hematopoietic malignancies among workers exposed to formaldehyde.,,  A National Institute of Occupational Safety and Health study of garment workers also reported increased risk of death due to leukemia among workers exposed to formaldehyde.  Extended follow-up of a cohort of British chemical workers did not report evidence of an increase in nasopharyngeal or lymph hematopoietic cancers, but a continuing statistically significant excess in lung cancers was reported.  Finally, a study of embalmers reported formaldehyde exposures to be associated with an increased risk of myeloid leukemia but not brain cancer. 
	Health effects of formaldehyde in addition to cancer were reviewed by the Agency for Toxics Substances and Disease Registry in 1999 and supplemented in 2010, and by the World Health Organization.  These organizations reviewed the scientific literature concerning health effects linked to formaldehyde exposure to evaluate hazards and dose response relationships and defined exposure concentrations for minimal risk levels (MRLs).  The health endpoints reviewed included sensory irritation of eyes and respiratory tract, pulmonary function, nasal histopathology, and immune system effects.  In addition, research on reproductive and developmental effects and neurological effects were discussed along with several studies that suggest that formaldehyde may increase the risk of asthma  -  particularly in the young.	
	EPA released a draft Toxicological Review of Formaldehyde  -  Inhalation Assessment through the IRIS program for peer review by the National Research Council (NRC) and public comment in June 2010.  The draft assessment reviewed more recent research from animal and human studies on cancer and other health effects.  The NRC released their review report in April 2011. EPA is currently developing a new draft assessment in response to this review.
    Acetaldehyde
Acetaldehyde is classified in EPA's IRIS database as a probable human carcinogen, based on nasal tumors in rats, and is considered toxic by the inhalation, oral, and intravenous routes.  The URE in IRIS for acetaldehyde is 2.2 x 10[-6] per ug/m[3].  Acetaldehyde is reasonably anticipated to be a human carcinogen by the U.S. DHHS in the 13[th] Report on Carcinogens and is classified as possibly carcinogenic to humans (Group 2B) by the IARC.[,]  EPA is currently conducting a reassessment of cancer risk from inhalation exposure to acetaldehyde.
The primary noncancer effects of exposure to acetaldehyde vapors include irritation of the eyes, skin, and respiratory tract.  In short-term (4 week) rat studies, degeneration of olfactory epithelium was observed at various concentration levels of acetaldehyde exposure.[,]  Data from these studies were used by EPA to develop an inhalation reference concentration of 9 ug/m[3].  Some asthmatics have been shown to be a sensitive subpopulation to decrements in functional expiratory volume (FEV1 test) and bronchoconstriction upon acetaldehyde inhalation.  The agency is currently conducting a reassessment of the health hazards from inhalation exposure to acetaldehyde.
    Acrolein
EPA most recently evaluated the toxicological and health effects literature related to acrolein in 2003 and concluded that the human carcinogenic potential of acrolein could not be determined because the available data were inadequate.  No information was available on the carcinogenic effects of acrolein in humans and the animal data provided inadequate evidence of carcinogenicity.  The IARC determined in 1995 that acrolein was not classifiable as to its carcinogenicity in humans.  
Lesions to the lungs and upper respiratory tract of rats, rabbits, and hamsters have been observed after subchronic exposure to acrolein.  The Agency has developed an RfC for acrolein of 0.02 ug/m3 and an RfD of 0.5 ug/kg-day.  EPA is considering updating the acrolein assessment with data that have become available since the 2003 assessment was completed.
Acrolein is extremely acrid and irritating to humans when inhaled, with acute exposure resulting in upper respiratory tract irritation, mucus hypersecretion and congestion.  The intense irritancy of this carbonyl has been demonstrated during controlled tests in human subjects, who suffer intolerable eye and nasal mucosal sensory reactions within minutes of exposure.  These data and additional studies regarding acute effects of human exposure to acrolein are summarized in EPA's 2003 IRIS Human Health Assessment for acrolein.  Studies in humans indicate that levels as low as 0.09 ppm (0.21 mg/m[3]) for five minutes may elicit subjective complaints of eye irritation with increasing concentrations leading to more extensive eye, nose and respiratory symptoms.  Acute exposures in animal studies report bronchial hyper-responsiveness.  Based on animal data (more pronounced respiratory irritancy in mice with allergic airway disease in comparison to non-diseased mice) and demonstration of similar effects in humans (e.g., reduction in respiratory rate), individuals with compromised respiratory function (e.g., emphysema, asthma) are expected to be at increased risk of developing adverse responses to strong respiratory irritants such as acrolein.  EPA does not currently have an acute reference concentration for acrolein.  The available health effect reference values for acrolein have been summarized by EPA and include an ATSDR MRL for acute exposure to acrolein of 7 ug/m[3] for 1-14 days exposure; and Reference Exposure Level (REL) values from the California Office of Environmental Health Hazard Assessment (OEHHA) for one-hour and 8-hour exposures of 2.5 ug/m[3] and 0.7 ug/m[3], respectively.
    Polycyclic Organic Matter
The term polycyclic organic matter (POM) defines a broad class of compounds that includes the polycyclic aromatic hydrocarbon compounds (PAHs).  One of these compounds, naphthalene, is discussed separately below.  POM compounds are formed primarily from combustion and are present in the atmosphere in gas and particulate form.  Cancer is the major concern from exposure to POM.  Epidemiologic studies have reported an increase in lung cancer in humans exposed to diesel exhaust, coke oven emissions, roofing tar emissions, and cigarette smoke; all of these mixtures contain POM compounds.[,]  Animal studies have reported respiratory tract tumors from inhalation exposure to benzo[a]pyrene and alimentary tract and liver tumors from oral exposure to benzo[a]pyrene.  In 1997 EPA classified seven PAHs (benzo[a]pyrene, benz[a]anthracene, chrysene, benzo[b]fluoranthene, benzo[k]fluoranthene, dibenz[a,h]anthracene, and indeno[1,2,3-cd]pyrene) as Group B2, probable human carcinogens.  Since that time, studies have found that maternal exposures to PAHs in a population of pregnant women were associated with several adverse birth outcomes, including low birth weight and reduced length at birth, as well as impaired cognitive development in preschool children (3 years of age).[,]  These and similar studies are being evaluated as a part of the ongoing IRIS assessment of health effects associated with exposure to benzo[a]pyrene.
    Naphthalene
Naphthalene is found in small quantities in gasoline and diesel fuels.  Naphthalene emissions have been measured in larger quantities in both gasoline and diesel exhaust compared with evaporative emissions from mobile sources, indicating it is primarily a product of combustion.  Acute (short-term) exposure of humans to naphthalene by inhalation, ingestion, or dermal contact is associated with hemolytic anemia and damage to the liver and the nervous system.  Chronic (long term) exposure of workers and rodents to naphthalene has been reported to cause cataracts and retinal damage.  EPA released an external review draft of a reassessment of the inhalation carcinogenicity of naphthalene based on a number of recent animal carcinogenicity studies.  The draft reassessment completed external peer review.  Based on external peer review comments received, a revised draft assessment that considers all routes of exposure, as well as cancer and noncancer effects, is under development.  The external review draft does not represent official agency opinion and was released solely for the purposes of external peer review and public comment.  The National Toxicology Program listed naphthalene as "reasonably anticipated to be a human carcinogen" in 2004 on the basis of bioassays reporting clear evidence of carcinogenicity in rats and some evidence of carcinogenicity in mice.  California EPA has released a new risk assessment for naphthalene, and the IARC has reevaluated naphthalene and re-classified it as Group 2B: possibly carcinogenic to humans.  
Naphthalene also causes a number of chronic non-cancer effects in animals, including abnormal cell changes and growth in respiratory and nasal tissues.  The current EPA IRIS assessment includes noncancer data on hyperplasia and metaplasia in nasal tissue that form the basis of the inhalation RfC of 3 ug/m[3].  The ATSDR MRL for acute exposure to naphthalene is 0.6 mg/kg/day.
    Other Air Toxics
In addition to the compounds described above, other compounds in gaseous hydrocarbon and PM emissions from motor vehicles will be affected by this action.  Mobile source air toxic compounds that will potentially be impacted include ethylbenzene, propionaldehyde, toluene, and xylene.  Information regarding the health effects of these compounds can be found in EPA's IRIS database.
Exposure and Health Effects Associated with Traffic
Locations in close proximity to major roadways generally have elevated concentrations of many air pollutants emitted from motor vehicles.  Hundreds of such studies have been published in peer-reviewed journals, concluding that concentrations of CO, NO, NO2, benzene, aldehydes, particulate matter, black carbon, and many other compounds are elevated in ambient air within approximately 300-600 meters (about 1,000-2,000 feet) of major roadways.  Highest concentrations of most pollutants emitted directly by motor vehicles are found at locations within 50 meters (about 165 feet) of the edge of a roadway's traffic lanes.
A recent large-scale review of air quality measurements in vicinity of major roadways between 1978 and 2008 concluded that the pollutants with the steepest concentration gradients in vicinities of roadways were CO, ultrafine particles, metals, elemental carbon (EC), NO, NOX, and several VOCs.  These pollutants showed a large reduction in concentrations within 100 meters downwind of the roadway.  Pollutants that showed more gradual reductions with distance from roadways included benzene, NO2, PM2.5, and PM10.  In the review article, results varied based on the method of statistical analysis used to determine the trend.
For pollutants with relatively high background concentrations relative to near-road concentrations, detecting concentration gradients can be difficult.  For example, many aldehydes have high background concentrations as a result of photochemical breakdown of precursors from many different organic compounds.  This can make detection of gradients around roadways and other primary emission sources difficult.  However, several studies have measured aldehydes in multiple weather conditions, and found higher concentrations of many carbonyls downwind of roadways.[,]  These findings suggest a substantial roadway source of these carbonyls.
In the past 15 years, many studies have been published with results reporting that populations who live, work, or go to school near high-traffic roadways experience higher rates of numerous adverse health effects, compared to populations far away from major roads.  In addition, numerous studies have found adverse health effects associated with spending time in traffic, such as commuting or walking along high-traffic roadways.[,][,][,]  The health outcomes with the strongest evidence linking them with traffic-associated air pollutants are respiratory effects, particularly in asthmatic children, and cardiovascular effects.
Numerous reviews of this body of health literature have been published as well.  In 2010, an expert panel of the Health Effects Institute (HEI) published a review of hundreds of exposure, epidemiology, and toxicology studies.  The panel rated how the evidence for each type of health outcome supported a conclusion of a causal association with traffic-associated air pollution as either "sufficient," "suggestive but not sufficient," or "inadequate and insufficient."  The panel categorized evidence of a causal association for exacerbation of childhood asthma as "sufficient."  The panel categorized evidence of a causal association for new onset asthma as between "sufficient" and as "suggestive but not sufficient."  "Suggestive of a causal association" was how the panel categorized evidence linking traffic-associated air pollutants with exacerbation of adult respiratory symptoms and lung function decrement.  It categorized as "inadequate and insufficient" evidence of a causal relationship between traffic-related air pollution and health care utilization for respiratory problems, new onset adult asthma, chronic obstructive pulmonary disease (COPD), nonasthmatic respiratory allergy, and cancer in adults and children.  Other literature reviews have been published with conclusions generally similar to the HEI panel's.[,][,][,]  However, researchers from the U.S. Centers for Disease Control and Prevention (CDC) recently published a systematic review and meta-analysis of studies evaluating the risk of childhood leukemia associated with traffic exposure, and reported positive associations between "postnatal" proximity to traffic and leukemia risks, but no such association for "prenatal" exposures.  
Health outcomes with few publications suggest the possibility of other effects still lacking sufficient evidence to draw definitive conclusions.  Among these outcomes with a small number of positive studies are neurological impacts (e.g., autism and reduced cognitive function) and reproductive outcomes (e.g., preterm birth, low birth weight).[,][,][,]
In addition to health outcomes, particularly cardiopulmonary effects, conclusions of numerous studies suggest mechanisms by which traffic-related air pollution affects health.  Numerous studies indicate that near-roadway exposures may increase systemic inflammation, affecting organ systems, including blood vessels and lungs.[,][,][,]  Long-term exposures in near-road environments have been associated with inflammation-associated conditions, such as atherosclerosis and asthma.[,][,]  
Several studies suggest that some factors may increase susceptibility to the effects of traffic-associated air pollution.  Several studies have found stronger respiratory associations in children experiencing chronic social stress, such as in violent neighborhoods or in homes with high family stress.[,][,]  
The risks associated with residence, workplace, or schools near major roads are of potentially high public health significance due to the large population in such locations.  According to the 2009 American Housing Survey, over 22 million homes (17.0 percent of all U.S. housing units) were located within 300 feet of an airport, railroad, or highway with four or more lanes.  This corresponds to a population of more than 50 million U.S. residents in close proximity to high-traffic roadways or other transportation sources.  Based on 2010 Census data, a 2013 publication estimated that 19 percent of the U.S. population (over 59 million people) lived within 500 meters of roads with at least 25,000 annual average daily traffic (AADT), while about 3.2 percent of the population lived within 100 meters (about 300 feet) of such roads.  Another 2013 study estimated that 3.7 percent of the U.S. population (about 11.3 million people) lived within 150 meters (about 500 feet) of interstate highways, or other freeways and expressways.  As discussed in Section VIII. B. (9), on average, populations near major roads have higher fractions of minority residents and lower socioeconomic status.  Furthermore, on average, Americans spend more than an hour traveling each day, bringing nearly all residents into a high-exposure microenvironment for part of the day.
In light of these concerns, EPA has required and is working with states to ensure that air quality monitors be placed near high-traffic roadways for determining NAAQS compliance for CO, NO2, and PM2.5 (in addition to those existing monitors located in neighborhoods and other locations farther away from pollution sources).  Near-roadway monitors for NO2 begin operation between 2014 and 2017 in Core Based Statistical Areas (CBSAs) with population of at least 500,000.  Monitors for CO and PM2.5 begin operation between 2015 and 2017.  These monitors will further our understanding of exposure in these locations.
EPA and DOT continue to research near-road air quality, including the types of pollutants found in high concentrations near major roads and health problems associated with the mixture of pollutants near roads.  
Environmental Justice
 Environmental justice (EJ) is a principle asserting that all people deserve fair treatment and meaningful involvement with respect to environmental laws, regulations, and policies.  EPA seeks to provide the same degree of protection from environmental health hazards for all people.  DOT shares this goal and is informed about the potential environmental impacts of its rulemakings through its NEPA process (see NHTSA's DEIS).  As referenced below, numerous studies have found that some environmental hazards are more prevalent in areas where racial/ethnic minorities and people with low socioeconomic status (SES), represent a higher fraction of the population compared with the general population.
 As discussed in Section VIII. B. (8) of this document and NHTSA's DEIS, concentrations of many air pollutants are elevated near high-traffic roadways.  If minority populations and low-income populations disproportionately live near such roads, then an issue of EJ may be present.  We reviewed existing scholarly literature examining the potential for disproportionate exposure among minorities and people with low SES and we conducted our own evaluation of two national datasets: the U.S. Census Bureau's American Housing Survey for calendar year 2009 and the U.S. Department of Education's database of school locations.
 Publications that address EJ issues generally report that populations living near major roadways (and other types of transportation infrastructure) tend to be composed of larger fractions of nonwhite residents.  People living in neighborhoods near such sources of air pollution also tend to be lower in income than people living elsewhere.  Numerous studies evaluating the demographics and socioeconomic status of populations or schools near roadways have found that they include a greater percentage of minority residents, as well as lower SES (indicated by variables such as median household income).  Locations in these studies include Los Angeles, CA; Seattle, WA; Wayne County, MI; Orange County, FL; and the State of California [,][,][,][,][,]  Such disparities may be due to multiple factors.
 People with low SES often live in neighborhoods with multiple stressors and health risk factors, including reduced health insurance coverage rates, higher smoking and drug use rates, limited access to fresh food, visible neighborhood violence, and elevated rates of obesity and some diseases such as asthma, diabetes, and ischemic heart disease.  Although questions remain, several studies find stronger associations between air pollution and health in locations with such chronic neighborhood stress, suggesting that populations in these areas may be more susceptible to the effects of air pollution.[,][,][,]  Household-level stressors such as parental smoking and relationship stress also may increase susceptibility to the adverse effects of air pollution.[,]
 More recently, three publications report nationwide analyses that compare the demographic patterns of people who do or do not live near major roadways.[,][,]  All three of these studies found that people living near major roadways are more likely to be minorities or low in SES.  They also found that the outcomes of their analyses varied between regions within the U.S.  However, only one such study looked at whether such conclusions were confounded by living in a location with higher population density and how demographics differ between locations nationwide.  In general, it found that higher density areas have higher proportions of low income and minority residents.
 We analyzed two national databases that allowed us to evaluate whether homes and schools were located near a major road and whether disparities in exposure may be occurring in these environments.  The American Housing Survey (AHS) includes descriptive statistics of over 70,000 housing units across the nation.  The study survey is conducted every two years by the U.S. Census Bureau.  The second database we analyzed was the U.S. Department of Education's Common Core of Data, which includes enrollment and location information for schools across the U.S.
 In analyzing the 2009 AHS, we focused on whether or not a housing unit was located within 300 feet of "4-or-more lane highway, railroad, or airport."  We analyzed whether there were differences between households in such locations compared with those in locations farther from these transportation facilities.  We included other variables, such as land use category, region of country, and housing type.  We found that homes with a nonwhite householder were 22-34 percent more likely to be located within 300 feet of these large transportation facilities than homes with white householders.  Homes with a Hispanic householder were 17-33 percent more likely to be located within 300 feet of these large transportation facilities than homes with non-Hispanic householders.  Households near large transportation facilities were, on average, lower in income and educational attainment, more likely to be a rental property and located in an urban area compared with households more distant from transportation facilities.
 In examining schools near major roadways, we examined the Common Core of Data (CCD) from the U.S. Department of Education, which includes information on all public elementary and secondary schools and school districts nationwide.  To determine school proximities to major roadways, we used a geographic information system (GIS) to map each school and roadways based on the U.S. Census's TIGER roadway file.  We found that minority students were overrepresented at schools within 200 meters of the largest roadways, and that schools within 200 meters of the largest roadways also had higher than expected numbers of students eligible for free or reduced-price lunches.  For example, Black students represent 22 percent of students at schools located within 200 meters of a primary road, whereas Black students represent 17 percent of students in all U.S. schools.  Hispanic students represent 30 percent of students at schools located within 200 meters of a primary road, whereas Hispanic students represent 22 percent of students in all U.S. schools.
Overall, there is substantial evidence that people who live or attend school near major roadways are more likely to be of a minority race, Hispanic ethnicity, and/or low SES.  The emission reductions from this proposed rule would likely result in widespread air quality improvements, but the impact on pollution levels in close proximity to roadways would be most direct.  Thus, this proposed rule would likely help in mitigating the disparity in racial, ethnic, and economically-based exposures.  

         Environmental Effects of Non-GHG Pollutants
Visibility
Visibility can be defined as the degree to which the atmosphere is transparent to visible light.  Visibility impairment is caused by light scattering and absorption by suspended particles and gases.  Visibility is important because it has direct significance to people's enjoyment of daily activities in all parts of the country.  Individuals value good visibility for the well-being it provides them directly, where they live and work, and in places where they enjoy recreational opportunities.  Visibility is also highly valued in significant natural areas, such as national parks and wilderness areas, and special emphasis is given to protecting visibility in these areas.  For more information on visibility see the final 2009 PM ISA.
EPA is working to address visibility impairment.  Reductions in air pollution from implementation of various programs associated with the Clean Air Act Amendments of 1990 (CAAA) provisions have resulted in substantial improvements in visibility, and will continue to do so in the future. Because trends in haze are closely associated with trends in particulate sulfate and nitrate due to the simple relationship between their concentration and light extinction, visibility trends have improved as emissions of SO2 and NOx have decreased over time due to air pollution regulations such as the Acid Rain Program. 
In the Clean Air Act Amendments of 1977, Congress recognized visibility's value to society by establishing a national goal to protect national parks and wilderness areas from visibility impairment caused by manmade pollution.  In 1999, EPA finalized the regional haze program to protect the visibility in Mandatory Class I Federal areas.  There are 156 national parks, forests and wilderness areas categorized as Mandatory Class I Federal areas.  These areas are defined in CAA Section 162 as those national parks exceeding 6,000 acres, wilderness areas and memorial parks exceeding 5,000 acres, and all international parks which were in existence on August 7, 1977.  
EPA has also concluded that PM2.5 causes adverse effects on visibility in other areas that are not protected by the Regional Haze Rule, depending on PM2.5 concentrations and other factors such as dry chemical composition and relative humidity (i.e., an indicator of the water composition of the particles).  EPA revised the PM2.5 standards in December 2012 and established a target level of protection that is expected to be met through attainment of the existing secondary standards for PM2.5.  
Plant and Ecosystem Effects of Ozone
The welfare effects of ozone can be observed across a variety of scales, i.e. subcellular, cellular, leaf, whole plant, population and ecosystem.  Ozone effects that begin at small spatial scales, such as the leaf of an individual plant, when they occur at sufficient magnitudes (or to a sufficient degree) can result in effects being propagated along a continuum to larger and larger spatial scales.  For example, effects at the individual plant level, such as altered rates of leaf gas exchange, growth and reproduction can, when widespread, result in broad changes in ecosystems, such as productivity, carbon storage, water cycling, nutrient cycling, and community composition.
Ozone can produce both acute and chronic injury in sensitive species depending on the concentration level and the duration of the exposure.  In those sensitive species, effects from repeated exposure to ozone throughout the growing season of the plant tend to accumulate, so that even low concentrations experienced for a longer duration have the potential to create chronic stress on vegetation.  Ozone damage to sensitive species includes impaired photosynthesis and visible injury to leaves.  The impairment of photosynthesis, the process by which the plant makes carbohydrates (its source of energy and food), can lead to reduced crop yields, timber production, and plant productivity and growth.  Impaired photosynthesis can also lead to a reduction in root growth and carbohydrate storage below ground, resulting in other, more subtle plant and ecosystems impacts.  These latter impacts include increased susceptibility of plants to insect attack, disease, harsh weather, interspecies competition and overall decreased plant vigor.  The adverse effects of ozone on areas with sensitive species could potentially lead to species shifts and loss from the affected ecosystems, resulting in a loss or reduction in associated ecosystem goods and services.  Additionally, visible ozone injury to leaves can result in a loss of aesthetic value in areas of special scenic significance like national parks and wilderness areas and reduced use of sensitive ornamentals in landscaping.  
The Integrated Science Assessment (ISA) for Ozone presents more detailed information on how ozone effects vegetation and ecosystems.  The ISA concludes that ambient concentrations of ozone are associated with a number of adverse welfare effects and characterizes the weight of evidence for different effects associated with ozone.  The ISA concludes that visible foliar injury effects on vegetation, reduced vegetation growth, reduced productivity in terrestrial ecosystems, reduced yield and quality of agricultural crops, and alteration of below-ground biogeochemical cycles are causally associated with exposure to ozone.  It also concludes that reduced carbon sequestration in terrestrial ecosystems, alteration of terrestrial ecosystem water cycling, and alteration of terrestrial community composition are likely to be causally associated with exposure to ozone. 
Atmospheric Deposition
Wet and dry deposition of ambient particulate matter delivers a complex mixture of metals (e.g., mercury, zinc, lead, nickel, aluminum, cadmium), organic compounds (e.g., polycyclic organic matter, dioxins, furans) and inorganic compounds (e.g., nitrate, sulfate) to terrestrial and aquatic ecosystems.  The chemical form of the compounds deposited depends on a variety of factors including ambient conditions (e.g., temperature, humidity, oxidant levels) and the sources of the material.  Chemical and physical transformations of the compounds occur in the atmosphere as well as the media onto which they deposit.  These transformations in turn influence the fate, bioavailability and potential toxicity of these compounds.  
Adverse impacts to human health and the environment can occur when particulate matter is deposited to soils, water, and biota.  Deposition of heavy metals or other toxics may lead to the human ingestion of contaminated fish, impairment of drinking water, damage to terrestrial, freshwater and marine ecosystem components, and limits to recreational uses.  Atmospheric deposition has been identified as a key component of the environmental and human health hazard posed by several pollutants including mercury, dioxin and PCBs.   
The ecological effects of acidifying deposition and nutrient enrichment are detailed in the Integrated Science Assessment for Oxides of Nitrogen and Sulfur-Ecological Criteria. Atmospheric deposition of nitrogen and sulfur contributes to acidification, altering biogeochemistry and affecting animal and plant life in terrestrial and aquatic ecosystems across the United States.  The sensitivity of terrestrial and aquatic ecosystems to acidification from nitrogen and sulfur deposition is predominantly governed by geology.  Prolonged exposure to excess nitrogen and sulfur deposition in sensitive areas acidifies lakes, rivers and soils.  Increased acidity in surface waters creates inhospitable conditions for biota and affects the abundance and biodiversity of fishes, zooplankton and macroinvertebrates and ecosystem function.  Over time, acidifying deposition also removes essential nutrients from forest soils, depleting the capacity of soils to neutralize future acid loadings and negatively affecting forest sustainability.  Major effects in forests include a decline in sensitive tree species, such as red spruce (Picea rubens) and sugar maple (Acer saccharum).  In addition to the role nitrogen deposition plays in acidification, nitrogen deposition also leads to nutrient enrichment and altered biogeochemical cycling.  In aquatic systems increased nitrogen can alter species assemblages and cause eutrophication.  In terrestrial systems nitrogen loading can lead to loss of nitrogen sensitive lichen species, decreased biodiversity of grasslands, meadows and other sensitive habitats, and increased potential for invasive species.  For a broader explanation of the topics treated here, refer to the description in Chapter 8.1.2.3 of the RIA.
Building materials including metals, stones, cements, and paints undergo natural weathering processes from exposure to environmental elements (e.g., wind, moisture, temperature fluctuations, sunlight, etc.).  Pollution can worsen and accelerate these effects. Deposition of PM is associated with both physical damage (materials damage effects) and impaired aesthetic qualities (soiling effects).  Wet and dry deposition of PM can physically affect materials, adding to the effects of natural weathering processes, by potentially promoting or accelerating the corrosion of metals, by degrading paints and by deteriorating building materials such as stone, concrete and marble. The effects of PM are exacerbated by the presence of acidic gases and can be additive or synergistic due to the complex mixture of pollutants in the air and surface characteristics of the material. Acidic deposition has been shown to have an effect on materials including zinc/galvanized steel and other metal, carbonate stone (as monuments and building facings), and surface coatings (paints). The effects on historic buildings and outdoor works of art are of particular concern because of the uniqueness and irreplaceability of many of these objects.
Environmental Effects of Air Toxics
Emissions from producing, transporting and combusting fuel contribute to ambient levels of pollutants that contribute to adverse effects on vegetation.  Volatile organic compounds, some of which are considered air toxics, have long been suspected to play a role in vegetation damage.  In laboratory experiments, a wide range of tolerance to VOCs has been observed.  Decreases in harvested seed pod weight have been reported for the more sensitive plants, and some studies have reported effects on seed germination, flowering and fruit ripening.  Effects of individual VOCs or their role in conjunction with other stressors (e.g., acidification, drought, temperature extremes) have not been well studied.  In a recent study of a mixture of VOCs including ethanol and toluene on herbaceous plants, significant effects on seed production, leaf water content and photosynthetic efficiency were reported for some plant species. 
Research suggests an adverse impact of vehicle exhaust on plants, which has in some cases been attributed to aromatic compounds and in other cases to nitrogen oxides.[,], 
         Air Quality Impacts of Non-GHG Pollutants
Current Concentrations of Non-GHG Pollutants
Nationally, levels of PM2.5, ozone, NOX, SOX, CO and air toxics are declining.  However, as of July 2, 2014 approximately 147 million people lived in counties designated nonattainment for one or more of the NAAQS, and this figure does not include the people living in areas with a risk of exceeding the NAAQS in the future.  Further, the majority of Americans continue to be exposed to ambient concentrations of air toxics at levels which have the potential to cause adverse health effects.  In addition, populations who live, work, or attend school near major roads experience elevated exposure concentrations to a wide range of air pollutants.

Impacts of Proposed Standards on Future Ambient Concentrations of Non-GHG Pollutants
Full-scale photochemical air quality modeling is necessary to accurately project levels of criteria pollutants and air toxics.  For the final rulemaking, national-scale air quality modeling analyses will be performed to analyze the impacts of the standards on PM2.5, ozone, NO2, and selected air toxics (i.e., benzene, formaldehyde, acetaldehyde, naphthalene, acrolein and 1,3-butadiene).  The length of time needed to prepare the necessary emissions inventories, in addition to the processing time associated with the modeling itself, has precluded us from performing air quality modeling for this proposal.
Section VIII.A of the preamble presents projections of the changes in criteria pollutant and air toxics emissions due to the proposed vehicle standards; the basis for those estimates is set out in Chapter 5 of the draft RIA.  NHTSA also provides its projections in Chapter 4 of its DEIS.  The atmospheric chemistry related to ambient concentrations of PM2.5, ozone and air toxics is very complex, and making predictions based solely on emissions changes is extremely difficult.  However, based on the magnitude of the emissions changes predicted to result from the proposed standards, the agencies expect that there will be improvements in ambient air quality, pending more comprehensive analyses for the final rulemaking.  
For the final rulemaking national-scale air quality modeling analyses will be performed to estimate future year ambient ozone, NO2, and PM2.5 concentrations, air toxics concentrations, visibility levels and nitrogen and sulfur deposition levels for 2040.  The agencies intend to use a 2011-based Community Multi-scale Air Quality (CMAQ) modeling platform as the tool for the air quality modeling.  The CMAQ modeling system is a comprehensive three-dimensional grid-based Eulerian air quality model designed to estimate the formation and fate of oxidant precursors, primary and secondary PM concentrations and deposition, and air toxics, over regional and urban spatial scales (e.g., over the contiguous United States).[,][,][,]  The CMAQ model is a well-known and well-established tool and is commonly used by EPA for regulatory analyses, by States in developing attainment demonstrations for their State Implementation Plans, and in numerous other national and international applications.[,][,][,]  The CMAQ model version 5.0 was most recently peer-reviewed in September of 2011 for the U.S. EPA.  CMAQ includes numerous science modules that simulate the emission, production, decay, deposition and transport of organic and inorganic gas-phase and particle-phase pollutants in the atmosphere.  This 2011 multi-pollutant modeling platform used the most recent multi-pollutant CMAQ code available at the time of air quality modeling (CMAQ version 5.0.2; multipollutant version
  CMAQ v5.0.2 reflects updates to version 5.0 to improve the underlying science algorithms as well as include new diagnostic/scientific modules which are detailed at http://www.cmascenter.org.[,][,]     


Economic and Other Impacts
This section presents the costs, benefits and other economic impacts of the proposed Phase 2 standards.  It is important to note that NHTSA's proposed fuel consumption standards and EPA's proposed GHG standards would both be in effect, and each would lead to average fuel efficiency increases and GHG emission reductions.  
The net benefits of the proposed Phase 2 standards consist of the effects of the program on: 
the vehicle program costs (costs of complying with the vehicle CO2 and fuel consumption standards),
fuel expenditure changes associated with reduced fuel usage resulting from more efficient vehicles and increased fuel usage associated with the "rebound" effect, both of which result from the program,
the economic value of reductions in GHGs, 
the economic value of reductions in non-GHG pollutants, 
costs associated with increases in noise, congestion, and accidents resulting from increased vehicle use, 
benefits of increased vehicle use associated with the "rebound" effect,
the economic value of improvements in U.S. energy security impacts.  
The benefits and costs of this rule are analyzed using 3 percent and 7 percent discount rates, consistent with current OMB guidance.  These rates are intended to represent consumers' preference for current over future consumption (3 percent), and the real rate of return on private investment (7 percent) which indicates the opportunity cost of capital. However, neither of these rates necessarily represents the discount rate that individual decision-makers use.
The program may also have other economic effects that are not included here.  The agencies seek comment on whether any costs or benefits are omitted from this analysis, so that they can be explicitly recognized in the final rules.  In particular, as discussed in Sections III through VI of this preamble and in Chapter 2 of the draft RIA, the technology cost estimates developed here take into account the costs to hold other vehicle attributes, such as size and performance, constant.  With these assumptions, and because welfare losses represent monetary estimates of how much buyers would have to be compensated to be made as well off as they would have been in the absence of this regulation, price increases for new vehicles measure the welfare losses to the vehicle buyers.  If the full technology cost gets passed along to the buyer as an increase in price, the technology cost thus measures the primary welfare loss of the standards, including impacts on buyers.  Increasing fuel efficiency would have to lead to other changes in the vehicles that buyers find undesirable for there to be additional welfare losses that are not included in the technology costs.  
As the 2012-2016 and 2017-2025 light-duty GHG/CAFE rules discussed, if other vehicle attributes are not held constant, then the technology cost estimates do not capture the losses to vehicle buyers associated with these changes.  The light-duty rules also discussed other potential issues that could affect the calculation of the welfare impacts of these types of changes, such as aspects of buyers' behavior that might affect the demand for technology investments, uncertainty in buyers' investment horizons, and the rate at which truck owner's trade off higher vehicle purchase price against future fuel savings.  The agencies seek comments, including supporting data and quantitative analyses, of any additional impacts of the proposed standards on vehicle attributes and performance, or other potential aspects that could positively or negatively affect the welfare implications of this proposed rulemaking.  
Where possible, we identify the uncertain aspects of these economic impacts and attempt to quantify them (e.g., sensitivity ranges associated with quantified and monetized GHG impacts; range of dollar-per-ton values to monetize non-GHG health benefits; uncertainty with respect to learning and markups).  For HD pickups and vans, the agencies explicitly analyzed the uncertainty surrounding its estimates of the economic impacts from requiring higher fuel efficiency in Preamble Section VI.  The agencies have also examined the sensitivity of oil prices on fuel expenditures; results of this sensitivity analysis can be found in Chapter 8 of the RIA.  NHTSA's draft EIS also characterizes the uncertainty in economic impacts associated with the HD national program.  For other impacts, however, there is inadequate information to inform a thorough, quantitative assessment of uncertainty.  EPA and NHTSA continue to work toward developing a comprehensive strategy for characterizing the aggregate impact of uncertainty in key elements of its analyses and we will continue to work to refine these uncertainty analyses in the future as time and resources permit.  The agencies seek comments on the methods and assumptions used to quantify uncertainty in this analysis, as well as comments on methods and data that might inform relevant uncertainty analyses not quantified in this analysis.
This and other sections of the preamble address Section 317 of the Clean Air Act on economic analysis.  Section IX.L addresses Section 321 of the Clean Air Act on employment analysis.  The total monetized benefits and costs of the program are summarized in Section IX.K for the preferred alternative and in Section X for all alternatives. 
Conceptual Framework 
The HD Phase 2 proposed standards are motivated by both the 2007 Energy Independence and Security Act requirement that NHTSA establish fuel efficiency standards for medium- and heavy-duty vehicles and the Clean Air Act requirement that EPA determine whether GHG emissions endanger health and welfare, and if so adopt measures that will reduce them.  NHTSA's statutory mandate is intended to further the agency's long-standing goals of reducing U.S. consumption and imports of petroleum energy to improve the nation's energy security, and the Clean Air Act requires EPA to reduce the threat to health and welfare posed by climate change.  
From an economics perspective, government actions to improve our nation's energy security and to protect our nation from the potential threats of climate change address "externalities," or economic consequences of decisions by individuals and businesses that extend beyond those who make these decisions.  For example, users of transportation fuels increase the entire U.S. economy's risk of having to make costly adjustments due to rapid increases in oil prices, but these users generally do not consider such costs when they decide to consume more fuel.  
Similarly, consuming transportation fuel also increases emissions of greenhouse gases and other more localized air pollutants that occur when fuel is refined, distributed, and consumed. Some of these emissions increase the likelihood and severity of potential climate-related economic damages, and others cause economic damages by adversely affecting human health.  The need to address these external costs and other adverse effects provides a well-established economic rationale that supports the statutory direction given to government agencies to establish regulatory programs that reduce the magnitude of these adverse effects at reasonable costs. 
The proposed Phase 2 standards would require manufacturers of new heavy-duty vehicles, including trailers (HDVs), to improve the fuel efficiency of the products that they produce.  As HDV users purchase and operate these new vehicles, they would consume significantly less fuel, in turn reducing U.S. petroleum consumption and imports as well as emissions of GHGs and other air pollutants.  Thus as a consequence of the agencies' efforts to meet our statutory obligations to improve U.S. energy security and reduce the threat of climate damages, the proposed fuel efficiency and GHG emission standards would also reduce HDV operators' outlays for fuel purchases.  These fuel savings are one measure of the proposed rule's effectiveness in promoting NHTSA's statutory goal of conserving energy.  Although these savings are not the agencies' primary motivation for adopting higher fuel efficiency standards, these substantial fuel savings represent significant additional economic benefits of this proposal.
Potential savings in fuel costs would appear to offer HDV buyers strong incentives to pay higher prices for vehicles that feature technology or equipment that reduces fuel consumption.  These potential savings would also appear to offer HDV manufacturers similarly strong incentives to produce more fuel-efficient vehicles.  Economic theory suggests that interactions between vehicle buyers and sellers in a normally-functioning competitive market would lead HDV manufacturers to incorporate all technologies that contribute to lower net costs into the vehicles they offer, and buyers to purchase them willingly.  Nevertheless, many readily available technologies that appear to offer cost-effective increases in HDV fuel efficiency (when evaluated over their expected lifetimes using conventional discount rates) have not been widely adopted, despite their potential to repay buyers' initial investments rapidly.   
This economic situation is commonly known as the "energy efficiency gap" or "energy paradox."  This situation is perhaps more challenging to understand with respect to the heavy-duty sector versus the light-duty vehicle sector. Unlike light-duty vehicles  -  which are purchased and used mainly by individuals and households  -  the vast majority of HDVs are purchased and operated by profit-seeking businesses for which fuel costs represent a substantial operating expense. Nevertheless, on the basis of evidence reviewed below, the agencies believe that a significant number of fuel efficiency improving technologies would remain far less widely adopted in the absence of these proposed standards.  
Economic research offers several possible explanations for why the prospect of these apparent savings might not lead HDV manufacturers and buyers to adopt technologies that would be expected to reduce HDV operating costs.  Some of these explanations involve failures of the HDV market for reasons other than the externalities caused by producing and consuming fuel.  These include situations where information about the performance of fuel economy technologies is incomplete, costly to obtain, or available only to one party to a transaction (or "asymmetrical"), as well as behavioral rigidities in either the HDV manufacturing or HDV-operating industries, such as standardized or inflexibly administered operating procedures, or requirements of other regulations on HDVs. Other explanations for the limited use of apparently cost-effective technologies that do not involve market failures include HDV operators' concerns about the performance, reliability, or maintenance requirements of new technology under the demands of everyday use, uncertainty about the fuel savings they will actually realize, and questions about possible effects on carrying capacity or other aspects of HDVs' utility.  
In the HD Phase 1 rulemaking (which, in contrast to these proposed standards, did not apply to trailers), the agencies raised five hypotheses that might explain this energy efficiency gap or paradox:  
         *          Imperfect information in the new vehicle market: information available to prospective buyers about the effectiveness of some fuel-saving technologies for new vehicles may be inadequate or unreliable.  If reliable information on their effectiveness in reducing fuel consumption is unavailable or difficult to obtain, HDV buyers will understandably be reluctant to pay higher prices to purchase vehicles equipped with unproven technologies.
         *          Imperfect information in the resale market: buyers in the used vehicle market may not be willing to pay adequate premiums for more fuel efficient vehicles when they are offered for resale to ensure that buyers of new vehicles can recover the remaining value of their original investment in higher fuel efficiency.  The prospect of an inadequate return on their original owners' investments in higher fuel efficiency may contribute to the short payback periods that buyers of new vehicles appear to demand.  
         *          Principal-agent problems causing split incentives: an HDV buyer may not be directly responsible for its future fuel costs, or the individual who will be responsible for fuel costs may not participate in the HDV purchase decision.  In these cases, the signal to invest in higher fuel efficiency normally provided by savings in fuel costs may not be transmitted effectively to HDV buyers, and the incentives of HDV buyers and fuel buyers will diverge, or be "split."  The trailers towed by heavy-duty tractors, which are typically not supplied by the tractor manufacturer or seller, present an obvious potential situation of split incentives that was not addressed in the HD Phase 1 rulemaking, but it may apply in this rulemaking.  If there is inadequate pass-through of price signals from trailer users to their buyers, then low adoption of fuel-saving technologies may result.
         *          Uncertainty about future fuel cost savings: HDV buyers may be uncertain about future fuel prices, or about maintenance costs and reliability of some fuel efficiency technologies.  Buyers may react to this uncertainty by implicitly discounting potential future savings at rates above standard discount rates.  In contrast, the costs of fuel-saving or maintenance-reducing technologies are immediate and thus not subject to discounting.  In this situation, potential variability about buyers' expected returns on capital investments to achieve higher fuel efficiency may shorten the payback period  -  the time required to repay those investments  -  they demand in order to make them.
         *          Adjustment and transactions costs: potential resistance to new technologies  -  stemming, for example, from drivers' reluctance or slowness to adjust to changes in the way vehicles operate  -  may slow or inhibit new technology adoption.  If a conservative approach to new technologies leads HDV buyers to adopt them slowly, then successful new technologies would be adopted over time without market intervention, but only with potentially significant delays in achieving the fuel saving, environmental, and energy security benefits they offer.  There also may be costs associated with training drivers to realize potential fuel savings enabled by new technologies, or with accelerating fleet operators' scheduled fleet turnover and replacement to hasten their acquisition of vehicles equipped with these technologies.   
Some of these explanations imply failures in the private market for fuel-saving technology beyond the externalities caused by producing and consuming fuel, while others suggest that complications in valuing or adapting to technologies that reduce fuel consumption may partly explain buyers' hesitance to purchase more fuel-efficient vehicles.  In either case, adopting this proposed rule would provide regulatory certainty and generate important economic benefits in addition to reducing externalities.  
Since the HD Phase 1 rulemaking, new research has provided further insight into potential barriers to adoption of fuel-saving technologies.  Several studies utilized focus groups and interviews involving small numbers of participants, who were people with time and inclination to join such studies, rather than selected at random.  As a result, the information from these groups is not necessarily representative of the industry as a whole.  While these studies cannot provide conclusive evidence about how all HDV buyers make their decisions, they do describe issues that arise for those that participated.
One common theme that emerges from these studies is the inability of HDV buyers to obtain reliable information about the fuel savings, reliability, and maintenance costs of technologies that improve fuel efficiency.  In many product markets, such as consumer electronics, credible reviews and tests of product performance are readily available to potential buyers.  In the trucking industry, however, the performance of fuel-saving technology is likely to depend on many firm-specific attributes, including the intensity of HDV use, the typical distance and routing of HDV trips, driver characteristics, road conditions, regional geography and traffic patterns.  
As a result, businesses that operate HDVs have strong preferences for testing fuel-saving technologies "in-house" because they are concerned that their patterns of vehicle use may lead to different results from those reported in published information.  Businesses with less capability to do in-house testing often seek information from peers, yet often remain skeptical of its applicability due to differences in the nature of their operations.  One source of imperfect information is the lack of availability of certain technologies from preferred suppliers.  HDV buyers often prefer to have technology or equipment installed by their favored original equipment manufacturers.  However, some technologies may not be available through these preferred sources, or may be available only as after-market installations from third parties (Aarnink et al. 2012, Roeth et al. 2013).
Although these studies appear to show that information in the new HDV market is often limited or viewed as unreliable, the evidence for imperfect information in the market for used HDVs is mixed.  On the one hand, some studies noted that fuel-saving technology is often not valued or demanded in the used vehicle market, because of imperfect information about its benefits, or greater mistrust of its performance among buyers in the used vehicle market than among buyers of new vehicles.  The lack of demand might also be due to the intended use of the used HDV, which may not require or reward the presence of certain fuel-saving technologies.  In other cases, however, fuel-saving technology can lead to a premium in the used market, as for instance to meet the more stringent requirements for HDVs operating in California.
All of the recent research identifies split incentives, or principal-agent problems, as a potential barrier to technology adoption.  These occur when those responsible for investment decisions are different from the main beneficiaries of the technology.  For instance, businesses that own and lease trailers to HDV operators may not have an incentive to invest in trailer-specific fuel-saving technology, since they do not collect the savings from the lower fuel costs that result.  Vernon and Meier (2012) estimate that 23 percent of trailers may be exposed to this kind of principal-agent problem, although they do not quantify its financial significance.
Split incentives can also exist when the HDV driver is not responsible for paying fuel costs.  Some technologies require additional effort, training, or changes in driving behavior to achieve their promised fuel savings; drivers who do not pay for fuel may be reluctant to undertake those changes, thus reducing the fuel-saving benefits from the perspective of the individual or company paying for the fuel.  For instance, drivers might not consistently deploy boat-tails equipped on trailers to improve vehicle aerodynamics.  Vernon and Meier also calculate that 91 percent of HDV fuel use is subject to this form of principal-agent problem, although they do not estimate how much it might reduce fuel savings to those who are paying for the fuel.
The studies based on focus groups and interviews (Klemick et al. 2013, Aarnink et al. 2012, Roeth et al. 2013) provide mixed evidence on the severity of the split-incentive problem.  Focus groups often do identify diverging incentives between drivers and the decision-makers responsible for purchasing vehicles, and economics literature recognizes that this split incentive can be a barrier to adopting new technology.  Aarnink et al. (2012) and Roeth et al. (2013) cite examples of split incentives involving trailers and fuel surcharges, although the latter also cites other examples where these same issues do not lead to split incentives. 
In an effort to minimize problems that can arise form split incentives, many businesses that operate HDVs also train drivers in the use of specific technologies or to modify their driving behavior in order to improve fuel efficiency, while some also offer financial incentives to their drivers to conserve fuel.  All of these options can help to reduce the split incentive problem, although they may not be effective where it arises from different ownership of combination tractors and trailers.  
Uncertainty about future costs for fuel and maintenance, or about the reliability of new technology, also appears to be a significant obstacle that can slow the adoption of fuel-saving technologies.  These examples illustrate the problem of uncertain or unreliable information about the actual performance of fuel efficiency technology discussed above.  In addition, businesses that operate HDVs may be concerned about how reliable new technologies will prove to be on the road, and whether significant additional maintenance costs or equipment malfunctions that result in costly downtime could occur.  Roeth et al. (2013) and Klemick et al. (2013) both document the short payback periods that HDV buyers require on their investments -- usually about 2 years -- which may be partly attributable to these uncertainties. 
These studies also provide some support for the view that adjustment and transactions costs may impede HDV buyers from investing in higher fuel efficiency.  As discussed above, several studies note that HDV buyers are less likely to select new technology when it is not available from their preferred manufacturers. Some technologies are only available as after-market additions, which can add other costs to adopting them. 
Some studies also cite driver acceptance of new equipment or technologies as a barrier to their adoption. HDV driver turnover is high in the U.S., and businesses that operate HDVs are concerned about retaining their best drivers. Therefore, they may avoid technologies that require significant new training or adjustments in driver behavior.  For some technologies that can be used to meet the proposed standards, such as automatic tire inflation systems, training costs are likely to be minimal.  Other technologies such as stop-start systems, however, may require drivers to adjust their expectations about vehicle operation, and it is difficult for the agencies to anticipate how drivers will respond to such changes.  
In addition to these factors, the studies considered other possible explanations for HDV buyers' apparent reluctance or slowness to invest in fuel-saving equipment or technology.  Financial constraints  -  access to lending sources willing to finance purchases of more expensive vehicles  -  do not appear to be a problem for the medium- and large-sized businesses participating in Klemick et al.'s (2013) study.  However, Roeth et al. (2013) noted that access to capital can be a significant challenge to smaller or independent businesses, and that price is always a concern to buyers.  In general, businesses that operate HDVs face a range of competing uses for available capital other than investing in fuel-saving technologies, and may assign higher priority to these other uses, even when investing in higher fuel efficiency HDVs appears to promise adequate financial returns. 
Other potentially important barriers to the adoption of measures that improve fuel efficiency may arise from "network externalities," where the benefits to new users of a technology depend on how many others have already adopted it.  One example where network externalities seem likely to arise is the market for natural gas-fueled HDVs: the limited availability of refueling stations may reduce potential buyers' willingness to purchase natural gas-fueled HDVs, while the small number of such HDVs in-use does not provide sufficient economic incentive to construct more natural gas refueling stations.  
Some businesses that operate HDVs may also be concerned about the difficulty in locating repair facilities or replacement parts, such as single-wide tires, wherever their vehicles operate.  When a technology has been widely adopted, then it is likely to be serviceable even in remote or rural places, but until it becomes widely available, its early adopters may face difficulties with repairs or replacements.   By accelerating the widespread adoption of these technologies, the proposed standards may assist in overcoming these difficulties.
As discussed previously, the lack of availability of fuel-saving technologies from preferred manufactures can also be a significant barrier to adoption (Roeth et al. 2013).  Manufacturers may be hesitant to offer technologies for which there is not strong demand, especially if the technologies require significant research and development expenses and other costs of bringing the technology to a market of uncertain demand. 
Roeth et al. (2013) also noted that it can take years, and sometimes as much as a decade, for a specific technology to become available from all manufacturers.  Many manufacturers prefer to observe the market and follow other manufacturers rather than be the first to market with a specific technology.  The "first-mover disadvantage" has been recognized in other research where the "first-mover" pays a higher proportion of the costs of developing technology, but loses the long-term advantage when other businesses follow quickly.  In this way, there may be barriers to innovation on the supply side that result in lower adoption rates of fuel-efficiency technology than would be optimal. 
In summary, the agencies recognize that businesses that operate HDVs are under competitive pressure to reduce operating costs, which should compel HDV buyers to identify and rapidly adopt cost-effective fuel-saving technologies.  Outlays for labor and fuel generally constitute the two largest shares of HDV operating costs, depending on the price of fuel, distance traveled, type of HDV, and commodity transported (if any), so businesses that operate HDVs face strong incentives to reduce these costs.[,]
However, the short payback periods that buyers of new HDVs appear to require suggest that some combination of uncertainty about future cost savings, transactions costs, and imperfectly functioning markets impedes this process.  Markets for both new and used HDVs may face these problems, although it is difficult to assess empirically the degree to which they actually do.  Even if the benefits from widespread adoption of fuel-saving technologies exceed their costs, their use may remain limited or spread slowly because their early adopters bear a disproportionate share of those costs.  In this case, the proposed standards may help to overcome such barriers by ensuring that these measures would be widely adopted.
Providing information about fuel-saving technologies, offering incentives for their adoption, and sharing HDV operators' real-world experiences with their performance through voluntary programs such as EPA's SmartWay Transport Partnership should assist in the adoption of new cost-saving technologies.  Nevertheless, other barriers that impede the diffusion of new technologies are likely to remain.  Buyers who are willing to experiment with new technologies expect to find cost savings, but those savings may be difficult to verify or replicate.  As noted previously, because benefits from employing these technologies are likely to vary with the characteristics of individual routes and traffic patterns, buyers of new HDVs may find it difficult to identify or verify the effects of fuel-saving technologies in their operations.  Risk-averse buyers may also avoid new technologies out of concerns over the possibility of inadequate returns on their investments, or with other possible adverse impacts.  
Some HDV manufacturers may delay in investing in the development and production of new technologies, instead waiting for other manufacturers to bear the risks of those investments first.  Competitive pressures in the HDV freight transport industry can provide a strong incentive to reduce fuel consumption and improve environmental performance.  However, not every HDV operator has the requisite ability or interest to access and utilize the technical information, or the resources necessary, to evaluate this information within the context of his or her own operations.
As discussed previously, whether the technologies available to improve HDVs' fuel efficiency would be adopted widely in the absence of the program is challenging to assess.  To the extent that these technologies would be adopted in its absence, neither their costs nor their benefits would be attributed to the program.  To account for this possibility, the agencies analyzed the proposed standards and the regulatory alternatives against two reference cases, or baselines, as described in Section X.
The first case uses a baseline that projects some improvement in fuel efficiency for new trailers, but no improvement in fuel efficiency for other vehicle segments in the absence of new Phase 2 standards.  This first case is referred to as the less dynamic baseline, or Alternative 1a.  The second case uses a baseline that projects some improvement in vehicle fuel efficiency for tractors, trailers, pickup trucks, and vans but not for vocational vehicles.  This second case is referred to as the more dynamic baseline, or Alternative 1b.
The agencies will continue to explore reasons for the slow adoption of readily available and apparently cost-effective technologies for improving fuel efficiency.  We also seek comments on our hypotheses about its causes, as well as data or other information that can inform our understanding of why this situation seems to persist. 

Vehicle-Related Costs Associated with the Program
Technology Cost Methodology
Direct Manufacturing Costs
The direct manufacturing costs (DMCs) used throughout this analysis are derived from several sources.  Many of the tractor, vocational and trailer DMCs can be sourced to the Phase 1 rule which, in turn, were sourced largely from a contracted study by ICF International for EPA. We have updated those costs by converting them to 2012 dollars, as described in Section IX.B.1.e below, and by continuing the learning effects described in the Phase 1 rule and in Section IX.B.1.c below.  The new tractor, vocational and trailer costs can be sourced to a more recent study conducted by Southwest Research Institute (SwRI) under contract to NHTSA.  The cost methodology used by SwRI was to estimate retail costs and work backward from there to derive a DMC for each technology.  The agencies did not agree with the approach used by SwRI to move from retail cost to DMC as the approach was to simply divide retail costs by 2 and use the result as a DMC. Our research, discussed below, suggests that a divisor of 2 is too high. Therefore, where we have used a SwRI derived retail estimate, we have divided by our researched markups to arrive at many of the DMCs used in this analysis.  In this way, the agencies have used an approach consistent with past GHG/CAFE/fuel consumption rules by dividing estimated retail prices by our estimated retail price equivalent (RPE) markups to derive an appropriate DMC for each technology.  We describe our RPEs in Section IX.B.1.b, below. 
For HD pickups and vans, we have relied primarily on the Phase 1 rule and the recent light-duty 2017-2025 model year rule since most technologies expected on these vehicles are, in effect, the same as those used on light-duty pickups.  Many of those technology DMCs are based on cost teardown studies which the agencies consider to be the most robust method of cost estimation.  However, because most of the HD versions of those technologies are expected to be more costly than their light-duty counterparts, we have scaled upward most of the light-duty DMCs for this analysis.  We have also used some costs developed under contract to NHTSA by SwRI. 
Importantly, in our methodology, all technologies are treated as being sourced from a supplier rather than being developed and produced in-house.  As a result, some portion of the total indirect costs of making a technology or system -- those costs incurred by the supplier for research, development, transportation, marketing etc. -- are contained in the sales price to the engine and/or vehicle/trailer manufacturer (i.e., the original equipment manufacturer (OEM)). That sale price paid by the OEM to the supplier is the DMC we estimate.   
We present the details -- sources, DMC values, scaling from light-duty values, markups, learning effects, adoption rates -- behind all our costs in Chapter 2 of the draft RIA.
Indirect Costs
To produce a unit of output, engine and truck manufacturers incur direct and indirect costs.  Direct costs include cost of materials and labor costs.  Indirect costs are all the costs associated with producing the unit of output that are not direct costs  -  for example, they may be related to production (such as research and development [R&D]), corporate operations (such as salaries, pensions, and health care costs for corporate staff), or selling (such as transportation, dealer support, and marketing).  Indirect costs are generally recovered by allocating a share of the costs to each unit of good sold.  Although it is possible to account for direct costs allocated to each unit of good sold, it is more challenging to account for indirect costs allocated to a unit of goods sold.  To make a cost analysis process more feasible, markup factors, which relate total indirect costs to total direct costs, have been developed.  These factors are often referred to as retail price equivalent (RPE) multipliers.
While the agencies have traditionally used RPE multipliers to estimate indirect costs, in recent GHG/CAFE/fuel consumption rules RPEs have been replaced in the primary analysis with indirect cost multipliers (ICMs).  ICMs differ from RPEs in that they attempt to estimate not all indirect costs incurred to bring a product to point of sale, but only those indirect costs that change as a result of a government action or regulatory requirement.  As such, some indirect costs, notably health and retirement benefits of retired employees, among other indirect costs, would not be expected to change due to a government action and, therefore, the portion of the RPE that covered those costs does not change. 
Further, the ICM is not a "one-size-fits-all" markup as is the traditional RPE.  With ICMs, higher complexity technologies like hybridization or moving from a manual to automatic transmission may require higher indirect costs -- more research and development, more integration work, etc. -- suggesting a higher markup. Conversely, lower complexity technologies like reducing friction or adding passive aero features may require fewer indirect costs thereby suggesting a lower markup.
Notably, ICMs are also not a simple multiplier as are traditional RPEs.  The ICM is broken into two parts -- warranty related and non-warranty related costs. The warranty related portion of the ICM is relatively small while the non-warranty portion represents typically over 95 percent of indirect costs.  These two portions are applied to different DMC values to arrive at total costs (TC).  The warranty portion of the markup is applied to a DMC that decreases year-over-year due to learning effects (described below in Section IX.B.1.c).   As learning effects decrease the DMC with production volumes, it makes sense that warranty costs would decrease since those parts replaced under warranty should be less costly. In contrast, the non-warranty portion of the markup is applied to a static DMC year-over-year resulting in static indirect costs. This is logical since the production plants and transportation networks and general overhead required to build parts, market them, deliver them and integrate them into vehicles do not necessarily decrease in cost year-over-year.  Because the warranty and non-warranty portions of the ICM are applied differently, one cannot compare the markup itself to the RPE to determine which markup would result in higher indirect cost estimates, at least in the time periods typically considered in our rules (four to ten years).
The agencies are concerned that some potential costs associated with this rulemaking may not be adequately captured by our ICMs.  ICMs are estimated based on a few specific technologies and these technologies may not be representative of the changes actually made to meet the proposed requirements.  Specifically, we may not have adequately estimated the costs for accelerated R&D or potential reliability issues with advanced technologies required by Alternative 4.  There is a great deal of uncertainty regarding these costs, and this makes estimates for this alternative of particular concern. We request comment on that aspect of our estimates.
We provide more details on our ICM approach and the markups used for each technology in Chapter 2.12 of the draft RIA.
Learning Effects on Direct and Indirect Costs
For some of the technologies considered in this analysis, manufacturer learning effects would be expected to play a role in the actual end costs.  The "learning curve" or "experience curve" describes the reduction in unit production costs as a function of accumulated production volume.  In theory, the cost behavior it describes applies to cumulative production volume measured at the level of an individual manufacturer, although it is often assumed -- as both agencies have done in past regulatory analyses -- to apply at the industry-wide level, particularly in industries that utilize many common technologies and component supply sources.  Both agencies believe there are indeed many factors that cause costs to decrease over time.  Research in the costs of manufacturing has consistently shown that, as manufacturers gain experience in production, they are able to apply innovations to simplify machining and assembly operations, use lower cost materials, and reduce the number or complexity of component parts.  All of these factors allow manufacturers to lower the per-unit cost of production (i.e., the manufacturing learning curve).
In this analysis, the agencies are using the same approach to learning as done in past GHG/CAFE/fuel consumption rules. In short, learning effects result in rapid cost reductions in the early years following introduction of a new technology.  The agencies have estimated those cost reductions as resulting in 20 percent lower costs for every doubling of production volume. As production volumes increase, learning rates continue at the same pace but flatten asymptotically due to the nature of the persistent doubling of production required to realize that cost reduction.  As such, the cost reductions flatten out as production volumes continue to increase.  Consistent with the Phase 1 rule, we refer to these two distinct portions of the "learning cost reduction curve" or "learning curve" as the steeper and flatter portions of the curve.  On that steep portion of the curve, costs are estimated to decrease by 20 percent for each double of production or, by proxy, in the third and then fifth year of production following introduction.  On the flat portion of the curve, costs are estimated to decrease by 3 percent per year for 5 years, then 2 percent per year for 5 years, then 1 percent per year for 5 years.  Also consistent with the Phase 1 rule, the majority of the technologies we expect would be adopted are considered to be on the flat portion of the learning curve meaning that the 20 percent cost reductions are rarely applied.  The agencies request comment on this approach to estimating these effects, and request that commenters provide data and forward-looking information to support any alternative methods or specific estimates.
We provide more details on the concept of learning-by-doing and the learning effects applied in this analysis in Chapter 2 of the draft RIA.
Technology Adoption Rates and Developing Package Costs
Determining the stringency of the proposed standards involves a balancing of relevant factors  -  chiefly technology feasibility and effectiveness, costs, and lead time.  For vocational vehicles, tractors and trailers, the agencies have projected a technology path to achieve the proposed standards reflecting an application rate of those technologies the agencies consider to be available at reasonable cost in the lead times provided.  The agencies do not expect each of the technologies for which costs have been developed to be employed by all trucks and trailers across the board.  Further, many of today's vehicles are already equipped with some of the technologies and/or are expected to adopt them by MY2018 to comply with the HD Phase 1 standards. Estimated adoption rates in both the reference and control cases are necessary for each vehicle/trailer category.  The adoption rates for most technologies are zero in the reference case; however, for some technologies -- notably aero and tire technologies -- the adoption rate is not zero in the reference case.  These reference and control case adoption rates are then applied to the technology costs with the result being a package cost for each vehicle/trailer category. 
For HD pickups and vans, the CAFE model determines the technology adoption rates that most cost effectively meet the standards being proposed. Similar to vocational vehicles, tractors and trailers, package costs are rarely if ever a simple sum of all the technology costs since each technology would be expected to be adopted at different rates.  The methods for estimating technology adoption rates and resultant costs (and other impacts) for HD pickups and vans are discussed above in Section 6.
We provide details of expected adoption rates in Chapter 2 of the draft RIA.  We present package costs both in Sections III through VI of this preamble and in more detail in Chapter 2 of the draft RIA.
Conversion of Technology Costs to 2012 US Dollars
As noted above in Section IX.B.1, the agencies are using technology costs from many different sources.  These sources, having been published in different years, present costs in different year dollars (i.e., 2009 dollars or 2010 dollars). For this analysis, the agencies sought to have all costs in terms of 2012 dollars to be consistent with the dollars used by AEO in its 2014 Annual Energy Outlook.  The agencies have used the GDP Implicit Price Deflator for Gross Domestic Product as the converter, with the actual factors used as shown in Table IX-1 .
Table IX-1 Implicit Price Deflators and Conversion Factors for Conversion to 2012$

                                     2006
                                     2007
                                     2008
                                     2009
                                     2010
                                     2011
                                     2012
                                     2013
Price index for GDP
                                                                         94.818
                                                                         97.335
                                                                         99.236
                                                                            100
                                                                        101.211
                                                                        103.199
                                                                        105.002
                                                                        106.588
Factor applied for 2012$
                                                                          1.107
                                                                          1.079
                                                                          1.058
                                                                          1.050
                                                                          1.037
                                                                          1.017
                                                                          1.000
                                                                          0.985

Compliance Program Costs
The agencies have also estimated additional and/or new compliance costs associated with the proposed standards.  Normally, compliance program costs would be considered part of the indirect costs and, therefore, would be accounted for via the markup applied to direct manufacturing costs.  However, since the agencies are proposing new compliance elements that were not present during development of the indirect cost markups used in this analysis, additional compliance program costs are being accounted for via a separate "line-item."  New research and development costs (see below) are being handled in the same way. 
The new compliance program elements included in this proposal are new powertrain testing within the vocational vehicle program, and an all-new compliance program where none has existed to date within the trailer program.  Note that for HD pickups and vans, HD engines, vocational vehicles and tractors, the Phase 1 rule included analogous compliance program costs meant to account for costs incurred in the all-new compliance program placed on the regulated firms by that rule.  Compliance program costs cover costs associated with any necessary compliance testing and reporting to the agencies and differ somewhat by alternative since, for example, more manufacturers are expected to conduct powertrain testing under alternative 4 than under alternative 3, etc.  The details behind the estimated compliance program costs are provided in Chapter 7 of the draft RIA. 
Research and Development Costs
Much like the compliance program costs described above, we have estimated additional HDD engine, vocational vehicle and tractor R&D associated with the proposed standards that is not accounted for via the indirect cost markups used for these segments.  Much like the Phase 1 rule, EPA is estimating these additional R&D costs will occur over a 4-year timeframe as the proposed standards come into force and industry works on means to comply.  After that period, the additional R&D costs go to $0 as R&D expenditures return to their normal levels and R&D costs are accounted for via the ICMs -- and the RPEs behind them -- used for these segments. Note that, due to the accelerated implementation of some technologies, alternative 4 has higher R&D costs than does alternative 3.  The details behind the estimated R&D costs are provided in Chapter 7 of the draft RIA.
Summary of Costs of the Proposed Vehicle Programs
The agencies have estimated the costs of the proposed vehicle standards on an annual basis for the years 2018 through 2050, and have also estimated costs for the full model year lifetimes of MY2018 through MY2029 vehicles.  Table IX-2 shows the annual costs of the proposed standards along with net present values using both 3 percent and 7 percent discount rates. Table IX-3 shows the discounted model year lifetime costs of the proposed standards at both 3 percent and 7 percent discount rates along with sums across applicable model years.
Table IX-2 Annual Costs of the Preferred Alternative and Net Present Values at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline 
($Millions of 2012$)
                                   Calendar
                                     Year
                                      New
                                  Technology
                                  Compliance
                                    R&D
                                      Sum
                                     2018
                                                                           $116
                                                                             $0
                                                                             $0
                                                                           $116
                                     2019
                                                                           $113
                                                                             $0
                                                                             $0
                                                                           $113
                                     2020
                                                                           $112
                                                                             $0
                                                                             $0
                                                                           $112
                                     2021
                                                                         $2,173
                                                                            $18
                                                                           $240
                                                                         $2,432
                                     2022
                                                                         $2,161
                                                                             $6
                                                                           $240
                                                                         $2,407
                                     2023
                                                                         $2,224
                                                                             $6
                                                                           $240
                                                                         $2,470
                                     2024
                                                                         $3,455
                                                                             $6
                                                                           $240
                                                                         $3,701
                                     2025
                                                                         $3,647
                                                                             $6
                                                                             $0
                                                                         $3,653
                                     2026
                                                                         $3,736
                                                                             $6
                                                                             $0
                                                                         $3,742
                                     2027
                                                                         $5,309
                                                                             $6
                                                                             $0
                                                                         $5,315
                                     2028
                                                                         $5,334
                                                                             $6
                                                                             $0
                                                                         $5,340
                                     2029
                                                                         $5,376
                                                                             $6
                                                                             $0
                                                                         $5,381
                                     2030
                                                                         $5,399
                                                                             $6
                                                                             $0
                                                                         $5,405
                                     2035
                                                                         $5,856
                                                                             $6
                                                                             $0
                                                                         $5,862
                                     2040
                                                                         $6,316
                                                                             $6
                                                                             $0
                                                                         $6,322
                                     2050
                                                                         $6,987
                                                                             $6
                                                                             $0
                                                                         $6,992
                                    NPV, 3%
                                                                        $85,926
                                                                           $104
                                                                           $759
                                                                        $86,789
                                    NPV, 7%
                                                                        $40,516
                                                                            $56
                                                                           $561
                                                                        $41,133

Table IX-3 Discounted MY Lifetime Costs of the Preferred Alternative using Method B and Relative to the Less Dynamic Baseline ($Millions of 2012$)
                                     Model
                                     Year
                               Discounted at 3%
                               Discounted at 7%
                                       
                                      New
                                  Technology
                                  Compliance
                                    R&D
                                      Sum
                                      New
                                  Technology
                                  Compliance
                                    R&D
                                      Sum
                                     2018
                                                                           $104
                                                                             $0
                                                                             $0
                                                                           $104
                                                                            $91
                                                                             $0
                                                                             $0
                                                                            $91
                                     2019
                                                                            $99
                                                                             $0
                                                                             $0
                                                                            $99
                                                                            $84
                                                                             $0
                                                                             $0
                                                                            $84
                                     2020
                                                                            $95
                                                                             $0
                                                                             $0
                                                                            $95
                                                                            $77
                                                                             $0
                                                                             $0
                                                                            $77
                                     2021
                                                                         $1,794
                                                                            $15
                                                                           $198
                                                                         $2,007
                                                                         $1,401
                                                                            $12
                                                                           $155
                                                                         $1,567
                                     2022
                                                                         $1,731
                                                                             $5
                                                                           $193
                                                                         $1,928
                                                                         $1,302
                                                                             $3
                                                                           $145
                                                                         $1,450
                                     2023
                                                                         $1,730
                                                                             $4
                                                                           $187
                                                                         $1,921
                                                                         $1,252
                                                                             $3
                                                                           $135
                                                                         $1,390
                                     2024
                                                                         $2,610
                                                                             $4
                                                                           $181
                                                                         $2,795
                                                                         $1,818
                                                                             $3
                                                                           $126
                                                                         $1,947
                                     2025
                                                                         $2,674
                                                                             $4
                                                                             $0
                                                                         $2,678
                                                                         $1,793
                                                                             $3
                                                                             $0
                                                                         $1,796
                                     2026
                                                                         $2,660
                                                                             $4
                                                                             $0
                                                                         $2,664
                                                                         $1,717
                                                                             $3
                                                                             $0
                                                                         $1,719
                                     2027
                                                                         $3,670
                                                                             $4
                                                                             $0
                                                                         $3,673
                                                                         $2,280
                                                                             $2
                                                                             $0
                                                                         $2,283
                                     2028
                                                                         $3,580
                                                                             $4
                                                                             $0
                                                                         $3,583
                                                                         $2,141
                                                                             $2
                                                                             $0
                                                                         $2,143
                                     2029
                                                                         $3,502
                                                                             $4
                                                                             $0
                                                                         $3,506
                                                                         $2,017
                                                                             $2
                                                                             $0
                                                                         $2,019
                                      Sum
                                                                        $24,248
                                                                            $48
                                                                           $759
                                                                        $25,055
                                                                        $15,973
                                                                            $33
                                                                           $561
                                                                        $16,568
New technology costs begin in MY2018 as trailers begin to add new technology. Compliance costs begin with the new standards with capital cost expenditure in that year for building and upgrading test facilities to conduct the proposed powertrain testing in the vocational program.  Research and development costs begin in 2021 and last for 4 years as engine, tractor and vocational vehicle manufacturers conduct research and development testing to integrate new technologies into their engines and vehicles.
Changes in Fuel Consumption and Expenditures 
Changes in Fuel Consumption
The new GHG and fuel consumption standards would result in significant improvements in the fuel efficiency of affected vehicles, and drivers of those vehicles would see corresponding savings associated with reduced fuel expenditures.  The agencies have estimated the impacts on fuel consumption for the proposed standards.  Details behind how these changes in fuel consumption were calculated are presented in Section VII of this preamble and in Chapter 5 of the draft RIA.  The total number of miles that vehicles are driven each year is different under the regulatory alternatives than in the reference case due to the "rebound effect" (discussed below in Section IX.E), so the changes in fuel consumption associated with each alternative are not strictly proportional to differences in the fuel economy levels they require.  
The expected annual impacts on fuel consumption are shown in Table IX-4. Table IX-5 shows the MY lifetime changes in fuel consumption.  The gallons shown in these tables as reductions in fuel consumption reflect reductions due to the proposed standards and include any increased consumption resulting from the rebound effect (discussed below in Section IX.E).  
Table IX-4 Annual Fuel Consumption Reductions due to the Preferred Alternative using Method B and Relative to the Less Dynamic Baseline (Millions of gallons)
                                   Calendar
                                     Year
                                   Gasoline
                                    Diesel
                                       
                                   Reference
                                     Case
                                     Fuel
                                  Consumption
                                   Reduction
                                       %
                                   Reduction
                                   Reference
                                     Case
                                     Fuel
                                  Consumption
                                   Reduction
                                       %
                                   Reduction
                                     2018
                                                                          6,781
                                                                              0
                                                                             0%
                                                                         45,999
                                                                             74
                                                                             0%
                                     2019
                                                                          6,799
                                                                              0
                                                                             0%
                                                                         46,362
                                                                            150
                                                                             0%
                                     2020
                                                                          6,832
                                                                              0
                                                                             0%
                                                                         46,768
                                                                            227
                                                                             0%
                                     2021
                                                                          6,884
                                                                             10
                                                                             0%
                                                                         47,236
                                                                            523
                                                                             1%
                                     2022
                                                                          6,944
                                                                             29
                                                                             0%
                                                                         47,761
                                                                            894
                                                                             2%
                                     2023
                                                                          7,005
                                                                             57
                                                                             1%
                                                                         48,309
                                                                          1,276
                                                                             3%
                                     2024
                                                                          7,054
                                                                             99
                                                                             1%
                                                                         48,807
                                                                          1,895
                                                                             4%
                                     2025
                                                                          7,113
                                                                            151
                                                                             2%
                                                                         49,400
                                                                          2,523
                                                                             5%
                                     2026
                                                                          7,169
                                                                            210
                                                                             3%
                                                                         49,967
                                                                          3,152
                                                                             6%
                                     2027
                                                                          7,221
                                                                            291
                                                                             4%
                                                                         50,420
                                                                          3,890
                                                                             8%
                                     2028
                                                                          7,273
                                                                            369
                                                                             5%
                                                                         50,821
                                                                          4,600
                                                                             9%
                                     2029
                                                                          7,332
                                                                            445
                                                                             6%
                                                                         51,262
                                                                          5,278
                                                                            10%
                                     2030
                                                                          7,396
                                                                            516
                                                                             7%
                                                                         51,792
                                                                          5,924
                                                                            11%
                                     2035
                                                                          7,732
                                                                            801
                                                                            10%
                                                                         54,602
                                                                          8,517
                                                                            16%
                                     2040
                                                                          8,075
                                                                            968
                                                                            12%
                                                                         58,082
                                                                         10,209
                                                                            18%
                                     2050
                                                                          8,806
                                                                          1,127
                                                                            13%
                                                                         65,937
                                                                         12,310
                                                                            19%


Table IX-5 Model Year Lifetime Fuel Consumption Reductions due to the Preferred Alternative using Method B and Relative to the Less Dynamic Baseline (Millions of gallons)
                                     Model
                                     Year
                                   Gasoline
                                    Diesel

                                   Reference
                                     Fuel
                                  Consumption
                                   Reduction
                                       %
                                   Reduction
                                   Reference
                                     Fuel
                                  Consumption
                                   Reduction
                                       %
                                   Reduction
                                     2018
                                                                              0
                                                                              0
                                                                             0%
                                                                         33,384
                                                                            754
                                                                             2%
                                     2019
                                                                              0
                                                                              0
                                                                             0%
                                                                         33,922
                                                                            745
                                                                             2%
                                     2020
                                                                              0
                                                                              0
                                                                             0%
                                                                         34,575
                                                                            738
                                                                             2%
                                     2021
                                                                          7,128
                                                                            113
                                                                             2%
                                                                         47,792
                                                                          4,424
                                                                             9%
                                     2022
                                                                          7,118
                                                                            216
                                                                             3%
                                                                         48,112
                                                                          4,568
                                                                             9%
                                     2023
                                                                          7,106
                                                                            317
                                                                             4%
                                                                         48,366
                                                                          4,703
                                                                            10%
                                     2024
                                                                          7,225
                                                                            493
                                                                             7%
                                                                         49,577
                                                                          7,628
                                                                            15%
                                     2025
                                                                          7,376
                                                                            602
                                                                             8%
                                                                         51,050
                                                                          7,967
                                                                            16%
                                     2026
                                                                          7,535
                                                                            714
                                                                             9%
                                                                         52,420
                                                                          8,289
                                                                            16%
                                     2027
                                                                          7,628
                                                                            982
                                                                            13%
                                                                         53,532
                                                                          9,984
                                                                            19%
                                     2028
                                                                          7,711
                                                                            992
                                                                            13%
                                                                         54,524
                                                                         10,181
                                                                            19%
                                     2029
                                                                          7,769
                                                                            999
                                                                            13%
                                                                         55,421
                                                                         10,360
                                                                            19%
                                      Sum
                                                                         66,596
                                                                          5,430
                                                                             8%
                                                                        562,673
                                                                         70,342
                                                                            13%
        
        
Fuel Savings
We have also estimated the changes in fuel expenditures, or the fuel savings, using fuel prices estimated in the Energy and Information Administration's 2014 Annual Energy Outlook.  As the AEO fuel price projections go through 2040 and not beyond, fuel prices beyond 2040 were set equal to the 2040 values.  These estimates do not account for the significant uncertainty in future fuel prices; the monetized fuel savings would be understated if actual fuel prices are higher (or overstated if fuel prices are lower) than estimated.  The Annual Energy Outlook (AEO) is a standard reference used by NHTSA and EPA and many other government agencies to estimate the projected price of fuel.  This has been done using both the pre-tax and post-tax fuel prices.  Since the post-tax fuel prices are the prices paid at fuel pumps, the fuel savings calculated using these prices represent the changes fuel purchasers would see.  The pre-tax fuel savings measure the value to society of the resources saved when less fuel is refined and consumed.  Assuming no change in fuel tax rates, the difference between these two columns represents the reduction in fuel tax revenues that would be received by state and federal governments, or about $240 million in 2021 and $5.2 billion by 2050 as shown in Table IX-6 where annual changes in monetized fuel savings are shown along with net present values using 3 percent and 7 percent discount rates. Table IX-7 and Table IX-8 show the discounted model year lifetime fuel savings using 3 percent and 7 percent discount rates, respectively. 
Table IX-6 Annual Fuel Savings and Net Present Values at 3% and 7% Discount Rates using Method B for the Preferred Alternative and Relative to the Less Dynamic Baseline ($Millions of 2012$)
                                   Calendar
                                     Year
                             Fuel Savings - Retail
                           Fuel Savings  -  Untaxed
                                   Change in
                                    Transfer

                                   Gasoline
                                    Diesel
                                      Sum
                                   Gasoline
                                    Diesel
                                      Sum
                                       
                                     2018
                                                                             $0
                                                                           $261
                                                                           $261
                                                                             $0
                                                                           $227
                                                                           $227
                                                                            $34
                                     2019
                                                                             $0
                                                                           $540
                                                                           $540
                                                                             $0
                                                                           $472
                                                                           $472
                                                                            $68
                                     2020
                                                                             $0
                                                                           $834
                                                                           $834
                                                                             $0
                                                                           $731
                                                                           $731
                                                                           $103
                                     2021
                                                                            $31
                                                                         $1,958
                                                                         $1,989
                                                                            $27
                                                                         $1,723
                                                                         $1,750
                                                                           $239
                                     2022
                                                                            $92
                                                                         $3,413
                                                                         $3,505
                                                                            $80
                                                                         $3,015
                                                                         $3,095
                                                                           $410
                                     2023
                                                                           $183
                                                                         $4,936
                                                                         $5,119
                                                                           $160
                                                                         $4,372
                                                                         $4,532
                                                                           $587
                                     2024
                                                                           $324
                                                                         $7,426
                                                                         $7,750
                                                                           $285
                                                                         $6,594
                                                                         $6,879
                                                                           $871
                                     2025
                                                                           $496
                                                                        $10,035
                                                                        $10,531
                                                                           $436
                                                                         $8,937
                                                                         $9,372
                                                                         $1,158
                                     2026
                                                                           $695
                                                                        $12,683
                                                                        $13,378
                                                                           $613
                                                                        $11,321
                                                                        $11,934
                                                                         $1,445
                                     2027
                                                                           $976
                                                                        $15,883
                                                                        $16,859
                                                                           $861
                                                                        $14,215
                                                                        $15,076
                                                                         $1,782
                                     2028
                                                                         $1,243
                                                                        $18,938
                                                                        $20,181
                                                                         $1,099
                                                                        $16,980
                                                                        $18,079
                                                                         $2,102
                                     2029
                                                                         $1,511
                                                                        $21,974
                                                                        $23,485
                                                                         $1,338
                                                                        $19,745
                                                                        $21,083
                                                                         $2,402
                                     2030
                                                                         $1,770
                                                                        $24,905
                                                                        $26,675
                                                                         $1,571
                                                                        $22,422
                                                                        $23,993
                                                                         $2,682
                                     2035
                                                                         $2,921
                                                                        $38,047
                                                                        $40,968
                                                                         $2,621
                                                                        $34,621
                                                                        $37,242
                                                                         $3,726
                                     2040
                                                                         $3,778
                                                                        $48,300
                                                                        $52,078
                                                                         $3,427
                                                                        $44,357
                                                                        $47,783
                                                                         $4,295
                                     2050
                                                                         $4,397
                                                                        $58,241
                                                                        $62,638
                                                                         $3,988
                                                                        $53,486
                                                                        $57,474
                                                                         $5,164
                                    NPV, 3%
                                                                        $37,319
                                                                       $506,971
                                                                       $544,290
                                                                        $33,603
                                                                       $461,992
                                                                       $495,595
                                                                        $48,695
                                    NPR, 7%
                                                                        $15,211
                                                                       $212,373
                                                                       $227,584
                                                                        $13,663
                                                                       $192,984
                                                                       $206,646
                                                                        $20,937

Table IX-7 Discounted Model Year Lifetime Fuel Savings, 3% Discount Rate using Method B for the Preferred Alternative and Relative to the Less Dynamic Baseline ($Millions of 2012$)
                                     Model
                                     Year
                             Fuel Savings - Retail
                           Fuel Savings  -  Untaxed
                                   Change in
                                    Transfer

                                   Gasoline
                                    Diesel
                                      Sum
                                   Gasoline
                                    Diesel
                                      Sum
                                       
                                     2018
                                                                             $0
                                                                         $2,183
                                                                         $2,183
                                                                             $0
                                                                         $1,937
                                                                         $1,937
                                                                           $246
                                     2019
                                                                             $0
                                                                         $2,123
                                                                         $2,123
                                                                             $0
                                                                         $1,890
                                                                         $1,890
                                                                           $234
                                     2020
                                                                             $0
                                                                         $2,066
                                                                         $2,066
                                                                             $0
                                                                         $1,844
                                                                         $1,844
                                                                           $222
                                     2021
                                                                           $258
                                                                        $12,178
                                                                        $12,436
                                                                           $228
                                                                        $10,898
                                                                        $11,126
                                                                         $1,310
                                     2022
                                                                           $487
                                                                        $12,369
                                                                        $12,856
                                                                           $431
                                                                        $11,094
                                                                        $11,525
                                                                         $1,331
                                     2023
                                                                           $700
                                                                        $12,513
                                                                        $13,212
                                                                           $620
                                                                        $11,247
                                                                        $11,867
                                                                         $1,346
                                     2024
                                                                         $1,067
                                                                        $19,934
                                                                        $21,001
                                                                           $947
                                                                        $17,953
                                                                        $18,901
                                                                         $2,100
                                     2025
                                                                         $1,277
                                                                        $20,435
                                                                        $21,712
                                                                         $1,136
                                                                        $18,441
                                                                        $19,577
                                                                         $2,135
                                     2026
                                                                         $1,484
                                                                        $20,858
                                                                        $22,342
                                                                         $1,323
                                                                        $18,858
                                                                        $20,180
                                                                         $2,161
                                     2027
                                                                         $2,001
                                                                        $24,642
                                                                        $26,643
                                                                         $1,787
                                                                        $22,319
                                                                        $24,106
                                                                         $2,537
                                     2028
                                                                         $1,981
                                                                        $24,610
                                                                        $26,592
                                                                         $1,772
                                                                        $22,329
                                                                        $24,101
                                                                         $2,491
                                     2029
                                                                         $1,957
                                                                        $24,536
                                                                        $26,493
                                                                         $1,754
                                                                        $22,298
                                                                        $24,052
                                                                         $2,441
                                      Sum
                                                                        $11,211
                                                                       $178,448
                                                                       $189,659
                                                                         $9,997
                                                                       $161,107
                                                                       $171,105
                                                                        $18,554
Table IX-8 Discounted Model Year Lifetime Fuel Savings, 7% Discount Rate using Method B for the Preferred Alternative and Relative to the Less Dynamic Baseline ($Millions of 2012$)
                                     Model
                                     Year
                             Fuel Savings - Retail
                           Fuel Savings  -  Untaxed
                                   Change in
                                    Transfer

                                   Gasoline
                                    Diesel
                                      Sum
                                   Gasoline
                                    Diesel
                                      Sum
                                       
                                     2018
                                                                             $0
                                                                         $1,529
                                                                         $1,529
                                                                             $0
                                                                         $1,352
                                                                         $1,352
                                                                           $176
                                     2019
                                                                             $0
                                                                         $1,428
                                                                         $1,428
                                                                             $0
                                                                         $1,267
                                                                         $1,267
                                                                           $161
                                     2020
                                                                             $0
                                                                         $1,331
                                                                         $1,331
                                                                             $0
                                                                         $1,185
                                                                         $1,185
                                                                           $146
                                     2021
                                                                           $163
                                                                         $7,538
                                                                         $7,701
                                                                           $143
                                                                         $6,731
                                                                         $6,874
                                                                           $827
                                     2022
                                                                           $295
                                                                         $7,383
                                                                         $7,678
                                                                           $260
                                                                         $6,608
                                                                         $6,869
                                                                           $810
                                     2023
                                                                           $408
                                                                         $7,200
                                                                         $7,607
                                                                           $361
                                                                         $6,458
                                                                         $6,819
                                                                           $789
                                     2024
                                                                           $599
                                                                        $11,055
                                                                        $11,654
                                                                           $531
                                                                         $9,938
                                                                        $10,469
                                                                         $1,186
                                     2025
                                                                           $690
                                                                        $10,917
                                                                        $11,607
                                                                           $613
                                                                         $9,834
                                                                        $10,447
                                                                         $1,160
                                     2026
                                                                           $772
                                                                        $10,734
                                                                        $11,505
                                                                           $687
                                                                         $9,688
                                                                        $10,374
                                                                         $1,131
                                     2027
                                                                         $1,003
                                                                        $12,215
                                                                        $13,218
                                                                           $894
                                                                        $11,046
                                                                        $11,940
                                                                         $1,278
                                     2028
                                                                           $956
                                                                        $11,741
                                                                        $12,697
                                                                           $854
                                                                        $10,636
                                                                        $11,490
                                                                         $1,206
                                     2029
                                                                           $909
                                                                        $11,269
                                                                        $12,179
                                                                           $814
                                                                        $10,228
                                                                        $11,041
                                                                         $1,137
                                      Sum
                                                                         $5,794
                                                                        $94,339
                                                                       $100,134
                                                                         $5,157
                                                                        $84,971
                                                                        $90,128
                                                                        $10,005

Maintenance Expenditures
The agencies expect minimal increases in maintenance costs under the proposed standards, having estimated increased maintenance costs associated only with installation of lower rolling resistance tires.  We expect that, when replaced, the lower rolling resistance tires would be replaced by equivalent performing tires throughout the vehicle lifetime.  As such, the incremental increases in costs for lower rolling resistance tires would be incurred throughout the vehicle lifetime at intervals consistent with current tire replacement intervals.  Those intervals are difficult to quantify given the variety of vehicles and operating modes within the HD industry.  We detail the inputs used to estimate maintenance impacts in Chapter 7.3.3 of the draft RIA.  We request comment on all aspects of the maintenance estimates. Specifically, for electrified vehicles (mild/strong hybrids) which are expected in alternatives 3 and 4 and in each vehicle category, we have not estimated any increased maintenance costs.  We have heard from at least one source that strong hybrid maintenance can be higher in some ways, including possible battery replacement, but may also be much lower for some vehicle systems like brakes and general engine wear.  Given the uncertainty, we have not estimated maintenance costs specifically for these electrified vehicles but request comment so that we might be able to include potential costs in the final rule.
Table IX-9 shows the annual increased maintenance costs of the preferred alternative along with net present values using both 3 percent and 7 percent discount rates.  Table IX-10 shows the discounted model year lifetime increased maintenance costs of the preferred alternative at both 3 percent and 7 percent discount rates along with sums across applicable model years.
Table IX-9 Annual Maintenance Expenditure Increase due to the Proposal and Net Present Values at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline  ($Millions of 2012$)
                                   Calendar
                                     Year
                                  Maintenance
                                  Expenditure
                                   Increase
                                     2018
                                                                             $6
                                     2019
                                                                            $11
                                     2020
                                                                            $16
                                     2021
                                                                            $28
                                     2022
                                                                            $39
                                     2023
                                                                            $50
                                     2024
                                                                            $64
                                     2025
                                                                            $78
                                     2026
                                                                            $90
                                     2027
                                                                           $104
                                     2028
                                                                           $116
                                     2029
                                                                           $127
                                     2030
                                                                           $127
                                     2035
                                                                           $127
                                     2040
                                                                           $127
                                     2050
                                                                           $127
                                    NPV, 3%
                                                                         $1,796
                                    NPV, 7%
                                                                           $860

Table IX-10 Discounted MY Lifetime Maintenance Expenditure Increase due to the Proposal using Method B and Relative to the Less Dynamic Baseline ($Millions of 2012$)
                                     Model
                                     Year
                                  3% Discount
                                     Rate
                                  7% Discount
                                     Rate
                                     2018
                                                                            $51
                                                                            $36
                                     2019
                                                                            $49
                                                                            $33
                                     2020
                                                                            $47
                                                                            $31
                                     2021
                                                                            $90
                                                                            $57
                                     2022
                                                                            $89
                                                                            $54
                                     2023
                                                                            $89
                                                                            $52
                                     2024
                                                                           $112
                                                                            $63
                                     2025
                                                                           $113
                                                                            $61
                                     2026
                                                                           $102
                                                                            $53
                                     2027
                                                                           $116
                                                                            $58
                                     2028
                                                                           $111
                                                                            $54
                                     2029
                                                                           $101
                                                                            $47
                                      Sum
                                                                         $1,071
                                                                           $600

Analysis of the Rebound Effect
The "rebound effect" has been defined a number of ways in the literature, and one common definition states that the rebound effect is the increase in demand for an energy service when the cost of the energy service is reduced due to efficiency improvements.[,][,]  In the context of heavy-duty vehicles (HDVs), this can be interpreted as an increase in HDV fuel consumption resulting from more intensive vehicle use in response to increased vehicle fuel efficiency.  Although much of this vehicle use increase is likely to take the form of increases in the number of miles vehicles are driven, it can also take the form of increases in the loaded weight at which vehicles operate or changes in traffic and road conditions vehicles encounter as operators alter their routes and schedules in response to improved fuel efficiency.  Because this more intensive use consumes fuel and generates emissions, it reduces the fuel savings and avoided emissions that would otherwise be expected to result from the increases in fuel efficiency this rulemaking proposes.  
 Unlike the light-duty vehicle (LDV) rebound effect, the heavy-duty vehicle (HDV) rebound effect has not been extensively studied.  According to a 2010 HDV report published by the National Research Council of the National Academies (NRC), it is "not possible to provide a confident measure of the rebound effect," yet NRC concluded that a HDV rebound effect probably exists and that, "estimates of fuel savings from regulatory standards will be somewhat misestimated if the rebound effect is not considered."  Although we believe the HDV rebound effect needs to be studied in more detail, we have nevertheless attempted to capture its potential effect in our analysis of this proposed rule, rather than to await further study.  We have elected to do so because the magnitude of the rebound effect is an important determinant of the actual fuel savings and emission reductions that are likely to result from adopting stricter fuel efficiency and GHG emissions standards. 
In our analysis and discussion below, we focus on one widely-used metric to estimate the rebound effect associated with all types of more intensive vehicle use, the increase in vehicle miles traveled (VMT) that results from improved fuel efficiency.  VMT can often provide a reasonable approximation for all types of more intensive vehicle use.  For simplicity, we refer to this as "the VMT rebound effect" or "VMT rebound" throughout this section, although we acknowledge that it is an approximation to the rebound effect associated with all types of more intensive vehicle use.  The agencies use our VMT rebound estimates to generate VMT inputs that are then entered into the EPA MOVES national emissions inventory model and the Volpe Center's HD CAFE model.  Both of these models use these inputs along with many others to generate projected emissions and fuel consumption changes resulting from each of the regulatory alternatives analyzed.
Using VMT rebound to approximate the fuel consumption impact from all types of more intensive vehicle use may not be completely accurate.  Many factors other than distance traveled  -  for example, a vehicle's loaded weight  -  play a role in determining its fuel consumption, so it is also important to consider how changes in these factors are correlated with variation in vehicle miles traveled.  Empirical estimates of the effect of weight on HDV fuel consumption vary, but universally show that loaded weight has some effect on fuel consumption that is independent of distance traveled.  Therefore, the product of vehicle payload and miles traveled, which typically is expressed in units of "ton-miles" or "ton-kilometers", has also been considered as a metric to approximate the rebound effect.  Because this metric's value depends on both payload and distance, it is important to note that changes in these two variables can have different impacts on HDV fuel consumption.  This is because the fuel consumed by HDV freight transport is determined by several vehicle attributes including engine and accessory efficiencies, aerodynamic characteristics, tire rolling resistance and total vehicle mass -- including payload carried, if any.
Other factors such as vehicle route and traffic patterns can also affect how each of these vehicle attributes contributes to the overall fuel consumption of a vehicle.  While it seems intuitive that if all of these other conditions remain constant, a vehicle driving the same route and distance twice will consume twice as much fuel as driving that same route once. However, because of the other vehicle attributes, it is less intuitive how a change in vehicle payload would affect vehicle fuel consumption.  We request comment on how the agencies should consider the relationship between changes in vehicle miles traveled, changes in vehicle ton-miles achieved, and overall fuel consumption when considering how best to measure the rebound effect.
Because the factors influencing HDV VMT rebound are generally different from those affecting LDV VMT rebound, much of the research on the LDV sector is likely to not apply to the HDV sector.  For example, the owners and operators of LDVs would likely view the costs and benefits associated with changes in their personal vehicle's fuel efficiency very differently than a HDV fleet owner or operator would view the costs and benefits (e.g., profits, offering more competitive prices for services) associated with changes in their HDVs' fuel efficiency.   The potential exception is HD pick-ups and vans, which share some similarities with LDV. As discussed in the 2010 NRC HD report, one difference from the LDV case is that when calculating the change in HDV costs that causes the rebound effect, it is more important to consider all components of HDV operating costs.  The costs of labor and fuel generally constitute the two largest shares of HDV operating costs, depending on the price of petroleum, distance traveled, type of vehicle, and commodity transported (if any).[,]  Equipment depreciation costs associated with the purchase or lease of an HDV are another significant component of total operating costs.  Even when HDV purchases involve upfront, one-time payments, HDV operators must recover the depreciation in the value of their vehicles resulting from their use, so this is likely to be considered as an operating cost they will attempt to pass on to final consumers of HDV operator services.  
Estimates of the impact of fuel efficiency standards on HDV VMT, and hence fuel consumption, should account for changes in all of these components of HDV operating costs.  The higher the net savings in total operating costs is, the higher the expected rebound effect would be.  Conversely, if higher HDV purchase costs outweigh future cost savings and total operating costs increase, HDV costs could rise, which would likely result in a decrease in HDV VMT.  In theory, other cost changes resulting from any requirement to achieve higher fuel efficiency, such as changes in maintenance costs or insurance rates, should also be taken into account, although information on these elements of HDV operating costs is extremely limited.  In this analysis, the agencies adapt estimates of the VMT rebound effect to project the response of HDV use to the estimated changes in total operating costs that result from the proposed Phase 2 standards.  We seek comment and data on how our proposed standards could impact these and other types of HDV operating costs, as well as on our procedure for adapting the VMT rebound effect to estimate the response of HDV use to changes in total operating costs. 
Since businesses are profit-driven, one would expect their decisions to be based on the costs and benefits of different operating decisions, both in the near-term and long-term.  Specifically, one would expect commercial HDV operators to take into account changes in overall operating costs per mile when making decisions about HDV use and setting rates they charge for their services.  If demand for those services is sensitive to the rates HDV operators charge, HDV VMT could change in response to the effect of higher fuel efficiency on the rates HDV operators charge.  If demand for HDV services is insensitive to price (e.g., due to lack of good substitutes), however, or if changes in HDV operating costs due to the proposed standards are not passed on to final consumers of HDV operator services, the proposed standards may have a limited impact on HDV VMT.
The following sections describe the factors affecting the magnitude of HDV VMT rebound; review the econometric and other evidence related to HDV VMT rebound; and summarize how we estimated the HDV rebound effect for this proposal.  
Factors Affecting the Magnitude of HDV VMT Rebound 
The magnitude and timing of HDV VMT rebound result from the interaction of many different factors.  Fuel savings resulting from fuel efficiency standards may cause HDV operators and their customers to change their patterns of HDV use and fuel consumption in a variety of ways.  For example, HDV operators may pass on the fuel cost savings to their customers by decreasing prices for shipping products or providing services, which in turn could stimulate more demand for those products and services (e.g., increases in freight output), and result in higher VMT.  Alternatively, HDV operators could simply use fuel savings to spend more on other costs such as driver labor or vehicle capital (e.g., holding freight output constant), which may not result in higher VMT. As discussed later in this section, HDV VMT rebound estimates determined via other proxy elasticities vary widely, but in no case has there been an estimate that more than offsets the fuel saved due to efficiency improvements (i.e., no rebound effect greater than 100 percent). 
If fuel cost savings are passed on to the HDV operators' customers (e.g., logistics businesses, manufacturers, retailers, municipalities, utilities consumers), those customers might reorganize their logistics and distribution networks over time to take advantage of lower operating costs.  For example, customers might demand more frequent shipments, ship products or materials over longer distances, or shift traffic to HDVs from other shipping modes such as rail, barge or air.  In addition, customers might choose to reduce their number of warehouses, reduce shipment rates or make smaller but more frequent shipments, all of which could lead to an increase in HDV VMT.  Ultimately, fuel cost savings could ripple through the entire economy, thus increasing demand for goods and services shipped by trucks, and therefore increase HDV VMT due to increased gross domestic product (GDP).
Conversely, if fuel efficiency standards lead to net increases in the total costs of HDV operation because fuel cost savings do not fully offset the increase in HDV purchase prices and associated depreciation costs, then the price of HDV services could rise.  This is likely to spur a decrease in HDV VMT, and perhaps a shift to alternative shipping modes. These effects could also ripple through the economy and affect GDP. 
Also, as discussed in Chapter 8.3.3 of the Draft RIA, the magnitude of the rebound effect is likely to be influenced by the extent of any market failures that affect the demand for more fuel efficient HDVs, as well as by HDV operators' responses to their perception of the tradeoff between higher upfront HDV purchase costs versus lower but uncertain future expenditures on fuel.   
Econometric and Other Evidence Related to HDV VMT Rebound
As discussed above, HDV VMT rebound is defined as the change in HDV VMT that occurs in response to an increase in HDV fuel efficiency.  We are not aware of any studies that directly estimate this elasticity for the U.S.  This section discusses econometric analyses of other related elasticities that could potentially be used as a proxy for measuring HDV VMT rebound, as well as other analyses that may provide insight into the magnitude of HDV VMT rebound.  We seek comment on the applicability of the findings from these analyses, as well as additional data and research on the topic of HDV VMT rebound. 
One of the challenges to developing robust econometric analyses of HDV VMT rebound in the U.S. is data limitations.  For example, the main source of time-series HDV fuel efficiency data in the U.S. is derived from aggregate fuel consumption and HDV VMT data. This may introduce interdependence or "simultaneity" between measures of HDV VMT and HDV fuel efficiency, because estimates of HDV fuel efficiency are derived partly from HDV VMT.  This mutual interdependence makes it difficult to isolate the causal effect of HDV fuel efficiency on HDV VMT and to measure the response of HDV VMT to changes in HDV fuel efficiency.  
Data on other important determinants of HDV VMT, such as freight shipping rates, shipment sizes, HDV payloads, and congestion levels on key HDV routes is also limited, of questionable reliability, or unavailable.  Additionally, data on HDVs and their use is usually only available at an aggregate level, making it difficult to evaluate potential differences in determinants of VMT for different types of HDV operations (e.g., long-haul freight vs. regional delivery operations) or vehicle sub-classes  (e.g., utility vehicles vs. school buses). 
Another challenge inherent in using econometric techniques to measure the response of HDV VMT to HDV fuel efficiency is developing model specifications that incorporate the mathematical form and range of explanatory variables necessary to produce reliable estimates of HDV VMT rebound. Many different factors can influence HDV VMT, and the complex relationships among those factors should be considered when measuring the rebound effect.  
In practice, however, most studies have employed simplified models.  Many use price variables (e.g., price per gallon of fuel, or fuel cost per mile driven) and some measure of aggregate economic activity, such as GDP.  However, some of these studies exclude potentially important variables such as the amount of road capacity (which affects travel speeds and may be related to other important characteristics of highway infrastructure), or the price or availability of competing forms of freight transport such as rail or barge (i.e., characteristics of the overall freight transport network).  
Fuel Price and Fuel Cost Elasticities
This sub-section reviews econometric analyses of the change in HDV use (measured in VMT, ton-mile, or fuel consumption) in response to changes in fuel price ($/gallon) or fuel cost ($/mile or $/ton-mile).  The studies presented below attempt to estimate these elasticities in the HDV sector using varying approaches and data sources.  
Gately (1990) employed an econometric analysis of U.S. data for the years 1966  -  1988 to examine the relationship between HDV VMT and average fuel cost per mile, real Gross National Product (GNP), and variables capturing the effects of fuel shortages in 1974 and 1979.  The study found no statistically significant relationship between HDV VMT and fuel cost per mile. Gately's estimates of the elasticity of HDV VMT with respect to fuel cost per mile were -0.035 with and -0.029 without the fuel shortage variables, but both estimates had large standard errors.  However, Gately's study was beset by numerous statistical problems, which raise serious questions about the reliability of its results. 
More recently, Matos and Silva (2011) analyzed road freight transportation sector data for the years 1987  -  2006 in Portugal to identify the determinants of demand for HDV freight transportation.  Using a reduced-form equation relating HDV use (measured in ton-km) to economic activity (GDP) and the energy cost of HDV use (measured by in fuel cost per ton-km carried), these authors estimated the elasticity of HDV ton-km with respect to energy costs to be -0.241.  An important strength of Matos and Silva's study is that it also estimated this same elasticity using a procedure that accounted for the effect of potential mutual causality between HDV ton-km and energy costs, and arrived at an identical value. 
Differences between HDV use and the level of highway service in Portugal and in the U.S. might limit the applicability of Matos and Silva's result to the U.S.  The volume and mix of commodities could differ between the two nations, as could the levels of congestion on their respective highway networks, transport distances, the extent of intermodal competition, and the characteristics of HDVs themselves.  HDVs also operate over a more limited highway network in Portugal than in the United States.  Unfortunately, it is difficult to anticipate how these differences might cause Matos and Silva's elasticity estimates to differ from what we might find in the U.S.  Finally, their analysis focused on HDV freight transport and did not consider non-freight uses of HDVs, which somewhat limits its usefulness in the analysis of this proposed rulemaking. 
De Borger and Mulalic (2012) examined the determinants of fuel use in the Denmark HDV freight transport sector for the years 1980  -  2007. The authors developed a system of equations that capture linkages among the demand for HDV freight transport, HDV fleet characteristics, and HDV fuel consumption. As De Borger and Mulalic state, "we precisely define and estimate a rebound effect of improvements in fuel efficiency in the trucking industry: behavioural adjustments in the industry imply that an exogenous improvement in fuel efficiency reduces fuel use less than proportionately.  Our best estimate of this effect is approximately 10 percent in the short run and 17 percent in the long run, so that a 1 percent improvement in fuel efficiency reduces fuel use by 0.90 percent (short-run) to 0.83 percent (long-run)."	
While De Borger and Mulalic capture a number of important responses that contribute to the rebound effect, some caution is appropriate when using their results to estimate the VMT rebound effect for this proposal.  Like the Matos and Silva study, this study examined HDV activity in another country, Denmark, which has a less-developed highway system, lower levels of freight railroad service than the U.S., and is also likely to have a different composition of freight shipping activity.  Although the effect of some of these differences is unclear, greater competition from rail shipping in the U.S. and the resulting potential for lower trucking costs to divert some rail freight to truck could cause the VMT rebound effect to be larger in the U.S. than De Borger and Mulalic's estimate for Denmark. 
On the other hand, if freight networks are denser and commodity types are more homogenous in Denmark than the U.S., then shippers may have wider freight trucking options.  If this is the case, shippers in Denmark might be more sensitive to changes in freight costs, which could cause the rebound effect in Denmark to be larger than the U.S.   Like the Matos and Silva study, this analysis also focuses on freight trucking and does not consider non-freight HDVs (e.g. vocational vehicles).  We have been unable to identify adequate data to employ De Borger and Mulalic's model for the U.S. (mainly because time-series data on freight carriage by trucks, driver wages, and vehicle prices in the U.S. are limited).
The Volpe National Transportation Systems Center recently developed travel forecasting models for the Federal Highway Administration (FHWA). This work was an extension of analyses previously conducted by the Volpe Center to develop the original version of FHWA's forecasting model,  which was presented in the Regulatory Impact Analysis for the HD GHG Phase I rule (see Table 9-2 in that document: "Range of Rebound Effect Estimates from NHTSA Econometric Analysis").  Volpe estimated both state-level and national aggregate models to forecast HDV single unit and combination truck VMT that included fuel cost per mile as an explanatory variable.  This analysis used data from 1970  -  2012 for its national aggregate model, and data for the 50 individual states from 1993  -  2012 for its state-level model.,  
Volpe analysts tested a large number of different specifications for its national and state level models that incorporated the effects of factors such as aggregate economic activity and its composition, the volume of U.S. exports and imports, and factors affecting the cost of producing trucking services (e.g., driver wage rates, truck purchase prices, and fuel costs), and the extent and capacity of the U.S. and states' highway networks. The procedures employed and the estimation results from these different specifications are summarized in materials in the docket for this rulemaking.
One drawback of the fuel cost metric employed in Volpe's models is that it is based on estimates of fuel efficiency derived from HDV VMT and fuel consumption, which introduces the potential for mutual causality (or "simultaneity") between VMT and the fuel cost metric and makes the effect of the latter difficult to isolate.  This may cause estimates of the sensitivity of HDV VMT to fuel costs to be inaccurate, although the direction of any resulting bias is difficult to anticipate.  
Volpe's estimates vary widely, and the estimates based on state-level and national data differ substantially.  Those from Volpe's national time-series models are likely to be relatively more reliable than the estimates derived from its state panel models, mainly because much of HDV travel within individual states is done by HDVs registered in other states.  In contrast, the measures of HDV travel, fuel efficiency, and fuel cost per mile used in Volpe's national time-series models clearly apply to the same fleet of vehicles, enabling them to more reliably identify and estimate the elasticity of HDV VMT with respect to fuel cost per mile. The Volpe estimates were not available at the time the agencies selected the values of the rebound effect for this proposal, but the agencies will consider this work and any other work in the final rule.
[Additional data to be added.]
Finally, EPA has contracted with Energy and Environmental Research Associates (EERA), LLC to analyze the HDV rebound effect for regulatory assessment purposes. EERA's initial report to EPA is included in the docket and contains detailed qualitative discussions of the rebound effect as well as preliminary, exploratory quantitative analysis.   At this time EERA is in the process of finalizing follow-on quantitative analyses focused on estimating the impact of fuel prices on VMT and fuel consumption.  We have included a working paper in the docket on this work, and we seek comment on this work.  Note that EERA's working paper was not available at the time the agencies conducted the analysis of the rebound effect for this proposal, but the agencies will consider this work and any other work in the final rule.
There are reasons to be cautious about interpreting the elasticities from the studies reviewed in this section as a measure of VMT rebound resulting from our proposed standards.   For example, vehicle capacity and loaded weight can vary dynamically in the HDV sector  -  possibly in response to changes in fuel price and fuel efficiency  -  and data on these measures are limited.  This makes it difficult to confidently infer a direct relationship between trucking output (e.g., ton-miles carried) and VMT assuming a constant average payload. 
In addition, fuel cost per mile  -  calculated by multiplying fuel price per gallon by fuel efficiency in gallons per mile  -  and fuel price may be imprecise proxies for an improvement in fuel efficiency, because the response of VMT to these variables may differ.  For example, if truck operators are more attentive to variation in fuel prices than to changes in fuel efficiency, then fuel price or fuel cost elasticities may overstate the true magnitude of the rebound effect.  
Similarly, there is some evidence in the literature that demand for fuel is more responsive to fuel price increases than to decreases.  Since improved fuel efficiency typically causes fuel costs for HDVs to fall (and assuming fuel costs are not fully offset by increases in vehicle purchase prices), fuel price or cost elasticities derived from historical periods when fuel prices were increasing or fuel efficiency was declining may also overstate the magnitude of the rebound effect.  An additional unknown is that HDV operators may factor fuel prices and fuel costs into their decision-making about rates to charge for their service differently from the way they incorporate initial vehicle purchase costs.  
Despite these limitations, elasticities with respect to fuel price and fuel cost can provide some insight into the magnitude of the HDV VMT rebound effect.  The agencies request comment on all of the studies presented in this section. 
Freight Price Elasticities
Freight price elasticities measure the percent change in demand for freight in response to a percent change in freight prices, controlling for other variables that may influence freight demand such as GDP, the extent that goods are traded internationally, and road supply and capacity.  This type of elasticity is only applicable to the HDV subcategory of freight trucks (i.e., combination tractors and vocational vehicles that transport freight).  One desirable attribute of such measures for purposes of this analysis is that they show the response of freight trucking activity to changes to trucking rates, including changes that result from fuel cost savings as well as increases in HDV technology costs.  
Freight price elasticities, however, are imperfect proxies for the rebound effect in freight trucks for a number of reasons.  For example, in order to apply these elasticities we must assume that our proposed rule's impact on fuel and vehicle costs is fully reflected in freight rates.  This may not be the case if truck operators adjust their profit margins or other operational practices (e.g., loading practices, truck driver's wages) instead of freight rates.  It is not well understood how trucking firms respond to different types of cost changes (e.g., changes to fuel costs versus labor costs).
Freight price elasticity estimates in the literature typically measure freight activity in tons or ton-miles, rather than VMT.  As discussed in the previous section, average truck capacity and payload in the HDV sector varies dynamically  -  possibly in response to changes in fuel price and fuel efficiency  -  and data on these measures are limited.  This makes it difficult to confidently infer a direct relationship between ton-miles and VMT by assuming a constant average payload. Inferring a direct relationship between tons and VMT is even less straightforward.  Additionally, there are significant limitations on national freight rate and freight truck ton-mile data in the U.S., making it difficult to confidently measure the impact of a change in freight rates on ton-miles.  
Finally, freight price elasticity estimates in the literature vary significantly based on commodity type, length of haul, region, availability of alternative modes (discussed further in Section IX.E.b.iii below), and functional form of the model (i.e., log-linear, linear, translog) making it difficult to confidently apply any single estimate reported in the literature to nationwide freight activity.  For example, elasticity estimates for longer trips tend to be larger in magnitude than those for shorter trips, while demand to ship bulk commodities tends to be less elastic than for non-bulk commodities.  
Although these factors explain some of the differences among reported estimates, much of the observed variation cannot be explained quantitatively.  For example, one study that controlled for mode, commodity class, demand elasticity measure (i.e., tons or ton-miles), model estimation form, country, and temporal nature of data only accounted for about half of the observed variation.  
Mode Shift Case Study
Although the total demand for freight transport is generally determined by economic activity, there is often the choice of shipping freight on modes other than HDVs.  This is because the United States has extensive rail, waterway and air transport networks in addition to an extensive highway network; these networks often closely parallel each other and are often viable choices for freight transport for many long-distance shipping routes within the continental U.S.  If rates for one mode decline, demand for that mode is likely to increase, and some of this new demand could represent shifts from other modes.  The "cross-price elasticity of demand," which measures the percentage change in demand for shipping by another mode (e.g., rail) given a percentage change in the price of HDV freight transport services, provides a measure of the importance of such mode shifting.  Aggregate estimates of cross-price elasticities vary widely, and there is no general consensus on the most appropriate value to use for analytical purposes.  
When considering intermodal shift, one of the most relevant kinds of shipments are those that are competitive between rail and HDV modes.  These trips generally include long-haul shipments greater than 500 miles, which weigh between 50,000 and 80,000 pounds (the legal road limit in many states).  Special kinds of cargo like coal and short-haul deliveries are of less interest because they are generally not economically transferable between HDV and rail modes, so they would not be expected to shift modes except under an extreme price change.  However, to the best of our knowledge, the total amount of freight that could potentially be subject to mode shifting has not been studied extensively.  
In order to explore the potential for HDV fuel efficiency standards to produce economic conditions that favor a mode shift from rail to HDVs, EPA commissioned GIFT Solutions, LLC to perform case studies on the HD GHG Phase 1 rule using a number of data sources, including the Commodity Flow Survey, interviews with trucking firms, and the Geospatial Intermodal Freight Transportation (GIFT) model developed by Winebrake and Corbett, which includes information on infrastructure and other route characteristics in the U.S.[,]  
A central assumption in the case studies was that economic conditions would favor a shift from rail to HDVs if either the price per ton-mile to ship a commodity by HDV, or the price to ship a given quantity of a commodity by HDV, became lower relative to rail transport options post-regulation.  The results of the case studies indicate that the HD Phase I rule would not seem to create obvious economic conditions that lead to a mode shift from rail to truck, but there are a number of limitations and caveats to this analysis, which are discussed in the final report to EPA by GIFT.[,]  For example, even if trucking did not become less expensive than rail post-regulation, a relative decrease in the truck versus rail rates might be enough to produce a shift, given that other factors could influence shippers' decisions on modal choice. The study did not, however, consider these other factors such as time-of-delivery and modal capacity.  As another example, the analysis assumes all fuel cost savings and incremental vehicle costs from the HD Phase 1 rule would be passed on to shippers via changes in freight rates, even though the analysis found some evidence that this might not occur (in two cases, the charges for shipping a truckload over a given route and distance were the same despite differences in payloads that should have been reflected in their fuel costs). Given these limitations, more work is needed in this area to explore the potential for mode shift in response to HD fuel efficiency standards.
Case Study Using Freight Price Elasticities
Cambridge Systematics, Inc. (CSI) employed a case study approach using freight price elasticity estimates in the literature to show several examples of the magnitude of the HDV rebound effect.  In their unpublished paper commissioned by the National Research Council of the National Academies in support of its 2010 HDV report, CSI estimated the effect on HDV VMT from a net decrease in operating costs associated with fuel efficiency improvements, using two different technology cost and fuel savings scenarios for Class 8 combination tractors.  Scenario 1 increased average fuel efficiency of the tractor from 5.59 miles per gallon to 6.8 miles per gallon, with an additional cost of $22,930 for purchasing the improved tractor.  Scenario 2 increased the average fuel efficiency to 9.1 miles per gallon, at an incremental cost of $71,630 per tractor.  Both of these scenarios were based on the technologies and targets from a report authored by the Northeast States Center for a Clean Air Future (NESCCAF) and International Council on Clean Transportation (ICCT). 
The CSI estimates were based on a range of direct (or "own-price") freight elasticities (-0.5 to -1.5) and cross-price freight elasticities (0.35 to 0.59)  obtained from the literature.  In their calculations, CSI assumed 142,706 million miles of tractor VMT and 1,852 billion ton-miles were affected.  The tractor VMT was based on the Bureau of Transportation Statistics' (BTS) estimate of highway miles for combination tractors in 2006, and the rail ton-miles were based on the BTS estimate of total railroad miles during 2006.  This assumption is likely to overstate the rebound effect, since not all freight shipments occur on routes where tractors and rail service shipments compete directly.   Nevertheless, this assumption appears to be reasonable in the absence of more detailed information on the percentage of total miles and ton-miles that are subject to potential mode shifting.  
For CSI's calculations, all costs except fuel costs and vehicle costs were taken from a 2008 ATRI study.  It is not clear from the report how the new vehicle costs were incorporated into CSI's calculations of per-mile tractor operating costs.  For example, neither the ATRI report nor the CSI report discusses assumptions about depreciation, useful lifetimes of tractors, and the opportunity cost of capital.  
Based on these two scenarios, CSI estimated the change in tractor VMT in response to a net decrease in operating costs (i.e., accounting for fuel cost and changes in tractor purchase costs) associated with fuel efficiency improvement of 11-31 percent for Scenario 1 and 5-16 percent for Scenario 2, without accounting for any fuel savings from reduced rail service.  When the fuel savings from reduced rail usage were included in the calculations, they estimated the change in tractor VMT in response to a net decrease in operating costs associated with fuel efficiency improvement would be 9-30 percent for Scenario 1, and 3-15 percent for Scenario 2.  
Note that these estimates reflect changes to tractor VMT with respect to total operating costs, so they should theoretically be larger than a percent change in tractor VMT with respect to a percent change in fuel efficiency because fuel efficiency only impacts a portion of truck operating costs (e.g., fuel and vehicle costs, but not likely driver wages or highway tolls).
CSI included caveats associated with these calculations.  For example, their report states that freight price elasticity estimates derived from the literature are "heavily reliant on factors including the type of demand measures analyzed (vehicle-miles of travel, ton-miles, or tons), geography, trip lengths, markets served, and commodities transported."  These factors can increase variability in the results. Also, estimates in CSI's study have the limitation of using freight price elasticities to estimate the HDV rebound effect discussed previously in Section IV.D.2.b.  
Simulation Model Study Using Freight Price Elasticities
     Guerrero (2014) constructs a freight simulation model of the California trucking sector to measure the impact of fuel saving investments and fleet management on GHG emissions. Rather than estimating these impacts using econometric analysis of raw data, the study uses values from the existing literature.  Guerrero determines that "...improving the performance of trucking also increases the number of trips demanded because the market price also decreases.  This `rebound' effect offsets around 40-50 percent of these vehicle efficiency emission reductions, with 9-14 percent of the effect coming from increased pavement deterioration and 31-36 percent coming from increased fuel combustion." Note that to the extent that trip lengths also vary in response to improvements in HDV fuel efficiency, changes in the number of HDV trips may not exactly reflect changes in the total number of miles the vehicles are operated. 
     However, these findings are based on freight price elasticities, which  -  as we discuss in Section IV.D.2.b and in the context of the CSI study above  -  have significant limitations.  The study also simulates only one state's freight network (California), which may not be a good representation of national activity.
How the Agencies Estimated the HDV Rebound Effect for this Proposal
Based upon our review of the available information and the lack of certain other information, described above, we have continued to use the rebound effect estimates we used previously in the HD Phase 1 rule in our analysis of Phase 2 proposed standards.  While some new work has become available since the HD Phase 1 rule, the agencies have concluded that this new work is not sufficiently compelling to change our estimates from the HD Phase 1 rule.  We do, however, seek comment on changing the following rebound effect estimates for the HD Phase 2 final rule.
The rebound effect estimates used in the HD Phase 1 rule were 15 percent for vocational vehicles, 10 percent for HD pickup trucks and vans, and 5 percent for combination tractors. These estimates represent the impact on VMT with respect to decreases in the fuel cost per mile driven.  That is, we assume that for every 10 percent decrease in fuel cost per mile from this rule, we anticipate 1.5 percent, 1.0 percent, and 0.5 percent increases in VMT for vocational trucks, HD pickup trucks & vans, and combination tractors, respectively.  These VMT increases result in increases in the fuel consumption outputs of the EPA MOVES national emissions inventory model and the Volpe Center's HD CAFE model, which both utilize model inputs based on these HDV rebound effect values.
In our analysis, we do not discern between short-run and long-run rebound effects, although these effects may differ. The vocational and combination truck estimates are based on the NHTSA analysis presented in the HD Phase 1 rule and the case study from CSI.  As with the HD Phase 1 rule, we did not find any literature specifically examining the HD pickup and truck sector.  Since these vehicles are used for very different purposes than combination tractors and vocational vehicles, and they are more similar in use to large light-duty vehicles, we have chosen the light-duty rebound effect of 10 percent used in the final rule establishing fuel economy and GHG standards for MYs 2017-2025 light-duty vehicles in our analysis of HD pickup trucks and vans. 
While for this proposal, the agencies have selected to use these rebound effect values, we acknowledge the literature shows a wide range of rebound effect estimates.  Therefore, we will review and consider revising these estimates in the final rule, taking into consideration all available data and analysis, including submissions from public commenters and new research on the rebound effect. 
It should be noted that the rebound estimates we have selected for our analysis represent the VMT impact from our proposed standards with respect to changes in the fuel cost per mile driven.  As described previously, the HDV rebound effect should ideally be a measure of the change in fuel consumed with respect to the change in overall operating costs due to a change in HDV fuel efficiency.  Such a measure would incorporate all impacts from our proposal, including those from incremental increases in vehicle prices that reflect costs for improving their fuel efficiency.  Therefore, VMT rebound estimates with respect to fuel costs per mile must be "scaled" to apply to total operating costs, by dividing them by the fraction of total operating costs accounted for by fuel.  
The agencies made simplifying assumptions in the VMT rebound analysis for this proposal, similar to the approach taken during the development of the HD GHG Phase 1 final rule.  However, for the HD Phase 2 final rulemaking, we plan to use a more comprehensive approach.  Due to timing constraints during the development of this proposal, the agencies did not have the technology package costs for each of the alternatives prior to the need to conduct the inventory analysis, except for the pickup truck and van category in analysis Method A.  Therefore, the same "overall" VMT rebound values were used for Alternatives 2 through 5 (as discussed in Chapter 8.3.3 of the Draft RIA and analyzed in Chapter 6 of the Draft RIA), despite the fact that each alternative results in a different change in incremental technology and fuel costs.  For the final rulemaking, we plan to determine VMT rebound separately for each HDV category and for each alternative.  Tables 64 through 66 in Chapter 7 of the Draft RIA present VMT rebound for each HDV sector that we estimated for the preferred alternative. These VMT impacts are reflected in the estimates of total fuel savings and reductions in emissions of GHG and other air pollutants presented in Section VI and VII of this preamble for all categories.
Section 9.3.3 in the draft RIA provides more details on our assessment of HDV VMT rebound.  We invite comment on our approach, the rebound estimates, and the related assumptions we made.  In particular, we invite comment on the most appropriate methodology for factoring new vehicle purchase or leasing costs into the per-mile operating costs.  Also, for the purposes of this proposal, we have not taken into account any potential fuel savings or GHG emission reductions from the rail sector due to mode shift because estimates of this effect seem too speculative at this time.  We invite comment on this assumption, as well as suggestions on alternative modeling frameworks that could be used to assess mode shifting implications of these proposed regulations.
Note that while we focus on the VMT rebound effect in our analysis of this proposed rule, there are at least two other types of rebound effects discussed in the economics literature.  In addition to VMT rebound effects, there are "indirect" rebound effects, which refers to the purchase of other goods or services (that consume energy) with the costs savings from energy efficiency improvements; and "economy-wide" rebound effects, which refers to the increased demand for energy throughout the economy in response to the reduced market price of energy that happens as a result of energy efficiency improvements. 
Research on indirect and economy-wide rebound effects is nascent, and we have not identified any that attempts to quantify indirect or economy-wide rebound effects for HDVs.  In particular, the agencies are not aware of any data to indicate that the magnitude of indirect or economy-wide rebound effects, if any, would be significant for this proposed rule.  Therefore, we rely the same analysis of vehicle miles traveled to estimate the rebound effect in this proposal that we did for the HD Phase 1 rule, where we attempted to quantify only rebound effects from our rule that impact HDV VMT.  We welcome comments and any new work in this area that helps to assess and quantify different rebound effects that could result from improvements in HDV efficiency, including different types of more intensive truck usage that affect fuel consumption but not VMT such as loaded weight, truck routing, and scheduling.

Impact on Class Shifting, Fleet Turnover, and Sales
The agencies considered two additional potential indirect effects which may lead to unintended consequences of the program to improve the fuel efficiency and reduce GHG emissions from HD trucks.  The next sections cover the agencies' qualitative discussions on potential class shifting and fleet turnover effects.
Class Shifting
Heavy-duty vehicles are typically configured and purchased to perform a function.  For example, a concrete mixer truck is purchased to transport concrete, a combination tractor is purchased to move freight with the use of a trailer, and a Class 3 pickup truck could be purchased by a landscape company to pull a trailer carrying lawnmowers.  The purchaser makes decisions based on many attributes of the vehicle, including the gross vehicle weight rating of the vehicle, which in part determines the amount of freight or equipment that can be carried. If the proposed Phase 2 standards impact either the performance of the vehicle or the marginal cost of the vehicle relative to the other vehicle classes, then consumers may choose to purchase a different vehicle, resulting in the unintended consequence of increased fuel consumption and GHG emissions in-use.
The agencies, along with the NAS panel, found that there is little or no literature which evaluates class shifting between trucks.  NHTSA and EPA qualitatively evaluated the proposed rules in light of potential class shifting.  The agencies looked at four potential cases of shifting: - from light-duty pickup trucks to heavy-duty pickup trucks; from sleeper cabs to day cabs; from combination tractors to vocational vehicles; and within vocational vehicles.
Light-duty pickup trucks, those with a GVWR of less than 8,500 pounds, are currently regulated under the existing GHG/CAFE Phase 1 program and will meet GHG/CAFE Phase 2 emissions standards beginning in 2017.  The increased stringency of the light-duty 2017-2025 MY vehicle rule has led some to speculate that vehicle consumers may choose to purchase heavy-duty pickup trucks that are currently regulated under the HD Phase 1 program if the cost of the light-duty regulation is high relative to the cost to buy the larger heavy-duty pickup trucks.  Since fuel consumption and GHG emissions rise significantly with vehicle mass, a shift from light-duty trucks to heavy-duty trucks would likely lead to higher fuel consumption and GHG emissions, an untended consequence of the regulations.  Given the significant price premium of a heavy-duty truck (often five to ten thousand dollars more than a light-duty pickup), we believe that such a class shift would be unlikely even absent this program.  These proposed rules would continue to diminish any incentive for such a class shift because they would narrow the GHG and fuel efficiency performance gap between light-duty and heavy-duty pickup trucks. The proposed regulations for the HD pickup trucks, and similarly for vans, are based on similar technologies and therefore reflect a similar expected increase in cost when compared to the light-duty GHG regulation.  Hence, the combination of the two regulations provides little incentive for a shift from light-duty trucks to HD trucks.  To the extent that our proposed regulation of heavy-duty pickups and vans could conceivably encourage a class shift towards lighter pickups, this unintended consequence would in fact be expected to lead to lower fuel consumption and GHG emissions as the smaller light-duty pickups have significantly better fuel economy ratings than heavy-duty pickup trucks.
The projected cost increases for this proposed action differ between Class 8 day cabs and Class 8 sleeper cabs, reflecting our expectation that compliance with the proposed standards would lead truck consumers to specify sleeper cabs equipped with APUs while day cab consumers would not.  Since Class 8 day cab and sleeper cab trucks perform essentially the same function when hauling a trailer, this raises the possibility that the higher cost for an APU equipped sleeper cab could lead to a shift from sleeper cab to day cab trucks.  We do not believe that such an intended consequence would occur for the following reasons.  The addition of a sleeper berth to a tractor cab is not a consumer-selectable attribute in quite the same way as other vehicle features.  The sleeper cab provides a utility that long-distance trucking fleets need to conduct their operations -- an on-board sleeping berth that lets a driver comply with federally-mandated rest periods, as required by the Department of Transportation Federal Motor Carrier Safety Administration's hours-of-service regulations.  The cost of sleeper trucks is already higher than the cost of day cabs, yet the fleets that need this utility purchase them.  A day cab simply cannot provide this utility with a single driver.  The need for this utility would not be changed even if the additional costs to reduce greenhouse gas emissions from sleeper cabs exceed those for reducing greenhouse gas emissions from day cabs. 
 A trucking fleet could instead decide to put its drivers in hotels in lieu of using sleeper berths, and switch to day cabs.  However, this is unlikely to occur in any great number, since the added cost for the hotel stays would far overwhelm differences in the marginal cost between day and sleeper cabs.  Even if some fleets do opt to buy hotel rooms and switch to day cabs, they would be highly unlikely to purchase a day cab that was aerodynamically worse than the sleeper cab they replaced, since the need for features optimized for long-distance hauling would not have changed.  So in practice, there would likely be little difference to the environment for any switching that might occur.  Further, while our projected costs assume the purchase of an APU for compliance, in fact our proposed regulatory structure would allow compliance using a near zero cost software utility that eliminates tractor idling after five minutes.  Using this compliance approach, the cost difference between a Class 8 sleeper cab and day cab due to our proposed regulations is small.  We are proposing this alternative compliance approach reflecting that some sleeper cabs are used in team driving situations where one driver sleeps while the other drives.  In that situation, an APU is unnecessary since the tractor is continually being driven when occupied.  When it is parked, it would automatically eliminate any additional idling through the shutdown software.  If trucking businesses choose this option, then costs based on purchase of APUs may overestimate the costs of this program to this sector.
Class shifting from combination tractors to vocational vehicles may occur if a customer deems the additional marginal cost of tractors due to the regulation to be greater than the utility provided by the tractor.  The agencies initially considered this issue when deciding whether to include Class 7 tractors with the Class 8 tractors or regulate them as vocational vehicles.  The agencies' evaluation of the combined vehicle weight rating of the Class 7 shows that if these vehicles were treated significantly differently from the Class 8 tractors, then they could be easily substituted for Class 8 tractors.  Therefore, the agencies are proposing to continue to include both classes in the tractor category.  The agencies believe that a shift from tractors to vocational vehicles would be limited because of the ability of tractors to pick up and drop off trailers at locations which cannot be done by vocational vehicles.
The agencies do not envision that the proposed regulatory program would cause class shifting within the vocational vehicle class.  The marginal cost difference due to the regulation of vocational vehicles is minimal.  The cost of LRR tires on a per tire basis is the same for all vocational vehicles so the only difference in marginal cost of the vehicles is due to the number of axles.  The agencies believe that the utility gained from the additional load carrying capability of the additional axle would outweigh the additional cost for heavier vehicles.
In conclusion, NHTSA and EPA believe that the proposed regulatory structure for HD trucks would not significantly change the current competitive and market factors that determine purchaser preferences among truck types.  Furthermore, even if a small amount of shifting would occur, any resulting GHG impacts would likely to be negligible because any vehicle class that sees an uptick in sales is also being regulated for fuel efficiency.  Therefore, the agencies did not include an impact of class shifting on the vehicle populations used to assess the benefits of the proposed program.   
Fleet Turnover and Sales Effects
A regulation that affects the cost to purchase and/or operate trucks could affect whether a consumer decides to purchase a new truck and the timing of that purchase.  The term pre-buy refers to the idea that truck purchases may occur earlier than otherwise planned to avoid the additional costs associated with a new regulatory requirement.  Slower fleet turnover, or low-buys, may occur when owners opt to keep their existing truck rather than purchase a new truck due to the incremental cost of the regulation.  
The 2010 NAS HD Report discussed the topics associated with HD truck fleet turnover.  NAS noted that there is some empirical evidence of pre-buy behavior in response to the 2004 and 2007 heavy-duty engine emission standards, with larger impacts occurring in response to higher costs.  However, those regulations increased upfront costs to firms without any offsetting future cost savings from reduced fuel purchases. In summary, NAS stated that
      ...during periods of stable or growing demand in the freight sector, pre-buy behavior may have significant impact on purchase patterns, especially for larger fleets with better access to capital and financing.  Under these same conditions, smaller operators may simply elect to keep their current equipment on the road longer, all the more likely given continued improvements in diesel engine durability over time.  On the other hand, to the extent that fuel economy improvements can offset incremental purchase costs, these impacts will be lessened.  Nevertheless, when it comes to efficiency investments, most heavy-duty fleet operators require relatively quick payback periods, on the order of two to three years.  
The proposed regulations are projected to return fuel savings to the truck owners that offset the cost of the regulation within a few years.  The effects of the regulation on purchasing behavior and sales will depend on the nature of the market failures and the extent to which firms consider the projected future fuel savings in their purchasing decisions.  
If trucking firms account for the rapid payback, they are unlikely to strategically accelerate or delay their purchase plans at additional cost in capital to avoid a regulation that will lower their overall operating costs.  As discussed in Section IX. A. this scenario may occur if this proposed program reduces uncertainty about fuel-saving technologies.  More reliable information about ways to reduce fuel consumption allows truck purchasers to evaluate better the benefits and costs of additional fuel savings, primarily in the original vehicle market, but possibly in the resale market as well.  In addition, the proposed standards are expected to lead manufacturers to install more fuel-saving technologies and promote their purchase; the increased availability and promotion may encourage sales.  
Other market failures may leave open the possibility of some pre-buy or delayed purchasing behavior.  Firms may not consider the full value of the future fuel savings for several reasons.  For instance, truck purchasers may not want to invest in fuel efficiency because of uncertainty about fuel prices.  Another explanation is that the resale market may not fully recognize the value of fuel savings, due to lack of trust of new technologies or changes in the uses of the vehicles.  Lack of coordination (also called split incentives -- see Section IX. A. ) between truck purchasers (who may emphasize the up-front costs of the trucks) and truck operators, who would like the fuel savings, can also lead to pre-buy or delayed purchasing behavior.  If these market failures prevent firms from fully internalizing fuel savings when deciding on vehicle purchases, then pre-buy and delayed purchase could occur and could result in a slight decrease in the GHG benefits of the regulation.  
Thus, whether pre-buy or delayed purchase is likely to play a significant role in the truck market depends on the specific behaviors of purchasers in that market.  Without additional information about which scenario is more likely to be prevalent, the agencies are not projecting a change in fleet turnover characteristics due to this regulation.  
Whether vehicle sales appear to be affected by the HD Phase 1 standards could provide some insight into the impacts of the proposed standards.   At the time of this NPRM, sales data are not yet available for 2014 model year, the first year of the Phase 1 standards.  In addition, any trends in sales are likely to be affected by macroeconomic conditions, which have been recovering since 2009-2010.  As a result, it is unlikely to be possible, even when vehicle sales data are available, to separate the effects of the existing standards from other confounding factors.  

Monetized GHG Impacts
Monetized CO2 Impacts  -  The Social Cost of Carbon (SC-CO2)
We estimate the global social benefits of CO2 emission reductions expected from the proposed heavy-duty GHG and fuel efficiency standards using the social cost of carbon (SC-CO2) estimates presented in the 2013 Technical Support Document: Technical Update of the Social Cost of Carbon for Regulatory Impact Analysis Under Executive Order 12866 (2013 SCC TSD). (The SC-CO2 estimates are presented in Table IX-11). We refer to these estimates, which were developed by the U.S. government's Interagency Working Group on the Social Cost of Carbon (IWG), as "SC-CO2 estimates."  The SC-CO2 is a metric that estimates the monetary value of impacts associated with marginal changes in CO2 emissions in a given year.  It includes a wide range of anticipated climate impacts, such as net changes in agricultural productivity and human health, property damage from increased flood risk, and changes in energy system costs, such as reduced costs for heating and increased costs for air conditioning. It is used to quantify the benefits of reducing CO2 emissions, or the disbenefit from increasing emissions, in regulatory impact analyses.  
The IWG first published the SC-CO2 estimates in 2010 following an interagency process that included EPA, DOT, and other executive branch entities; the process used three integrated assessment models (IAMs) to develop SC-CO2 estimates and selected four global values for use in regulatory analyses.   The IWG updated these estimates in 2013 using new versions of each IAM.  The 2013 update did not revisit the 2010 modeling decisions (e.g., with regard to the discount rate, reference case socioeconomic and emission scenarios or equilibrium climate sensitivity).  Rather, improvements in the way damages are modeled are confined to those that have been incorporated into the latest versions of the models by the developers themselves and used for analyses in peer-reviewed publications.  The 2010 SCC Technical Support Document (2010 SCC TSD) provides a complete discussion of the methods used to develop these estimates and the 2013 SCC TSD presents and discusses the updated estimates.
EPA and other agencies have sought public comment on the SC-CO2 estimates as part of various rulemakings.  In addition, OMB's Office of Information and Regulatory Affairs sought public comment on the approach used to develop the estimates.  The comment period ended on February 26, 2014, and OMB is reviewing the comments received.     
The four global SC-CO2 estimates, updated in 2013, are as follows: $13, $46, $68, and $137 per metric ton of CO2 emissions in the year 2020 (2012$).  The first three values are based on the average SC-CO2 from the three IAMs, at discount rates of 5, 3, and 2.5 percent, respectively. SC-CO2 estimates for several discount rates are included because the literature shows that the SC-CO2 is quite sensitive to assumptions about the discount rate, and because no consensus exists on the appropriate rate to use in an intergenerational context (where costs and benefits are incurred by different generations).  The fourth value is the 95th percentile of the SC-CO2 from all three models at a 3 percent discount rate. It is included to represent higher-than-expected impacts from temperature change further out in the tails of the SC-CO2 distribution.  The SC-CO2 increases over time because future emissions are expected to produce larger incremental damages as economies grow and physical and economic systems become more stressed in response to greater climate change.  The SC-CO2 values are presented in Table IX-11.
The U.S.2010 SCC TSD noted a number of limitations to the SC-CO2 analysis, including the incomplete way in which the IAMs capture catastrophic and non-catastrophic impacts, their incomplete treatment of adaptation and technological change, uncertainty in the extrapolation of damages to high temperatures, and assumptions regarding risk aversion.  Current IAMs do not assign value to all of the important physical, ecological, and economic impacts of climate change recognized in the climate change literature due to a lack of precise information on the nature of damages and because the science incorporated into these models understandably lags behind the most recent research.  Nonetheless, these estimates and the discussion of their limitations represent the best available information about the social benefits of CO2 reductions to inform benefit-cost analysis.  The new versions of the models used to estimate the values presented below offer some improvements in these areas, although further work is warranted. Accordingly, EPA and other agencies continue to engage in research on modeling and valuation of climate impacts with the goal to improve these estimates.  Additional details are provided in the RIA of this rule and the SCC TSDs.
Applying the global SC-CO2 estimates, shown in Table IX-11, to the estimated reductions in domestic CO2 emissions for the proposed program, yields estimates of the dollar value of the climate related benefits for each analysis year.  These estimates are then discounted back to the analysis year using the same discount rate used to estimate the SC-CO2.  For internal consistency, the annual benefits are discounted back to net present value terms using the same discount rate as each SC-CO2 estimate (i.e. 5 percent, 3 percent, and 2.5 percent) rather than the discount rates of 3 percent and 7 percent used to derive the net present value of other streams of costs and benefits of the proposed rule.  The SC-CO2 benefit estimates for each calendar year are shown in Table IX-12.   The SC-CO2 benefit estimates for each model year are shown in Table IX-13.
Table IX-11 Social Cost of CO2, 2012  -  2050[a] (in 2012$ per Metric Ton)
                                   Calendar
                                     Year
                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%,
                                95th Percentile
                                     2012
                                                                            $12
                                                                            $37
                                                                            $58
                                                                           $100
                                     2015
                                                                            $12
                                                                            $40
                                                                            $61
                                                                           $120
                                     2020
                                                                            $13
                                                                            $46
                                                                            $69
                                                                           $140
                                     2025
                                                                            $15
                                                                            $51
                                                                            $74
                                                                           $150
                                     2030
                                                                            $17
                                                                            $56
                                                                            $81
                                                                           $170
                                     2035
                                                                            $20
                                                                            $60
                                                                            $86
                                                                           $190
                                     2040
                                                                            $23
                                                                            $66
                                                                            $93
                                                                           $210
                                     2045
                                                                            $26
                                                                            $71
                                                                            $99
                                                                           $220
                                     2050
                                                                            $28
                                                                            $77
                                                                           $100
                                                                           $240
                  a The SC-CO2 values are dollar-year and emissions-year specific and have been rounded to two significant digits. Unrounded numbers from the 2013 SCC TSD were used to calculate the CO2 benefits.


Table IX-12 Upstream and Downstream Annual CO2 Benefits for the Given SC-CO2 Value[a] using Method B and Relative to the Less Dynamic Baseline (Millions of 2012$)  
                                   Calendar
                                     Year
                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%,
                                95th Percentile
                                     2018
                                                                            $13
                                                                            $43
                                                                            $65
                                                                           $130
                                     2019
                                                                            $26
                                                                            $91
                                                                           $130
                                                                           $270
                                     2020
                                                                            $40
                                                                           $140
                                                                           $210
                                                                           $420
                                     2021
                                                                            $92
                                                                           $330
                                                                           $500
                                                                         $1,000
                                     2022
                                                                           $170
                                                                           $590
                                                                           $880
                                                                         $1,800
                                     2023
                                                                           $250
                                                                           $860
                                                                         $1,300
                                                                         $2,600
                                     2024
                                                                           $400
                                                                         $1,300
                                                                         $1,900
                                                                         $4,000
                                     2025
                                                                           $540
                                                                         $1,800
                                                                         $2,600
                                                                         $5,500
                                     2026
                                                                           $720
                                                                         $2,300
                                                                         $3,400
                                                                         $7,000
                                     2027
                                                                           $890
                                                                         $2,900
                                                                         $4,200
                                                                         $8,900
                                     2028
                                                                         $1,100
                                                                         $3,500
                                                                         $5,100
                                                                        $11,000
                                     2029
                                                                         $1,300
                                                                         $4,200
                                                                         $5,900
                                                                        $13,000
                                     2030
                                                                         $1,500
                                                                         $4,800
                                                                         $6,900
                                                                        $15,000
                                     2035
                                                                         $2,500
                                                                         $7,400
                                                                        $11,000
                                                                        $23,000
                                     2040
                                                                         $3,300
                                                                         $9,700
                                                                        $14,000
                                                                        $30,000
                                     2050
                                                                         $5,000
                                                                        $14,000
                                                                        $19,000
                                                                        $42,000
                                      NPV
                                                                        $22,000
                                                                       $100,000
                                                                       $160,000
                                                                       $320,000
         a The SC-CO2 values are dollar-year and emissions-year specific.  

Table IX-13 Upstream and Downstream Discounted Model Year Lifetime CO2 Benefits for the Given SC-CO2 Value using Method B and Relative to the Less Dynamic Baseline (Millions of 2012$)[a]  
                                     Model
                                     Year
                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%,
                                95th Percentile
                                     2018
                                                                            $71
                                                                           $280
                                                                           $440
                                                                           $860
                                     2019
                                                                            $68
                                                                           $280
                                                                           $430
                                                                           $850
                                     2020
                                                                            $66
                                                                           $270
                                                                           $420
                                                                           $830
                                     2021
                                                                           $390
                                                                         $1,600
                                                                         $2,600
                                                                         $5,100
                                     2022
                                                                           $410
                                                                         $1,700
                                                                         $2,700
                                                                         $5,300
                                     2023
                                                                           $420
                                                                         $1,800
                                                                         $2,800
                                                                         $5,500
                                     2024
                                                                           $660
                                                                         $2,800
                                                                         $4,400
                                                                         $8,700
                                     2025
                                                                           $680
                                                                         $3,000
                                                                         $4,600
                                                                         $9,100
                                     2026
                                                                           $700
                                                                         $3,100
                                                                         $4,800
                                                                         $9,500
                                     2027
                                                                           $830
                                                                         $3,700
                                                                         $5,800
                                                                        $11,000
                                     2028
                                                                           $830
                                                                         $3,700
                                                                         $5,800
                                                                        $11,000
                                     2029
                                                                           $830
                                                                         $3,700
                                                                         $5,900
                                                                        $12,000
                                      Sum
                                                                         $6,000
                                                                        $26,000
                                                                        $41,000
                                                                        $80,000
         a The SC-CO2 values are dollar-year and emissions-year specific.  

Sensitivity Analysis - Monetized Non-CO2 GHG Impacts 
One limitation of the primary benefits analysis is that it does not include the valuation of non-CO2 GHG impacts (e.g., CH4, N2O, HFC-134a).  Specifically, the 2010 and 2013 SCC TSDs do not include estimates of the social costs of non-CO2 GHG emissions using an approach analogous to the one used to estimate the SC-CO2.  However, EPA recognizes that non-CO2 GHG impacts associated with this rulemaking (e.g., net reductions in CH4,N2O, and HFC-134a) would provide additional benefits to society.  To understand the potential implication of omitting these benefits, EPA has conducted sensitivity analysis using two approaches: 1) an approximation approach based on the global warming potentials (GWP) of non-CO2 GHGs, which has been used in previous rulemakings, and 2) a set of recently published SC-CH4 and SC-N2O estimates that are consistent with the modeling assumptions underlying the SC-CO2 estimates (Marten et al. 2014).  This section presents estimates of the non-CO2 benefits of the proposed rulemaking using both approaches.  Other unquantified non-CO2 benefits are discussed in this section as well. Additional details are provided in the RIA of this rule.
Currently, EPA is undertaking a peer review of the application of the Marten et al. (2014) non-CO2 social cost estimates in regulatory analysis.  Pending a favorable peer review, EPA plans to include monetized benefits of CH4 and N2O emission reductions in the main benefit-cost analysis of the RIA for the final rule, using the directly modeled estimates of SC-CH4 and SC-N2O from Marten et al.  EPA seeks comments on the use of directly modeled estimates for the social cost of non-CO2 GHGs.
Non-CO2 GHG Benefits Based on the GWP Approximation Approach
In the absence of directly modeled estimates, one potential method for approximating the value of marginal non-CO2 GHG emission reductions is to convert non-CO2 emissions reductions to CO2-equivalents that may then be valued using the SC-CO2.  Conversion to CO2-equivalents is typically based on the global warming potentials (GWPs) for the non-CO2 gases. This approach, henceforth referred to as the "GWP approach," has been used in sensitivity analyses to estimate the non-CO2 benefits in previous EPA rulemakings (see U.S. EPA 2012, 2013).  EPA has not presented these estimates in a main benefit-cost analysis due to the limitations associated with using the GWP approach to value changes in non-CO2 GHG emissions, and considered the GWP approach as an interim method of analysis until social cost estimates for non-CO2 GHGs, consistent with the  SC-CO2 estimates, were developed.
The GWP is a simple, transparent, and well-established metric for assessing the relative impacts of non-CO2 emissions compared to CO2 on a purely physical basis.  However, as discussed both in the 2010 SCC TSD and previous rulemakings (e.g., U.S. EPA 2012, 2013), the GWP approximation approach to measuring non-CO2 GHG benefits has several well-documented limitations.  These metrics are not ideally suited for use in benefit-cost analyses to approximate the social cost of non-CO2 GHGs because the approach would assume all subsequent linkages leading to damages are linear in radiative forcing, which would be inconsistent with the most recent scientific literature.  Detailed discussion of limitations of the GWP approach can be found in the RIA.
Similar to the approach used in the RIA of the Final Rulemaking for 2017-2025 Light-Duty Vehicle Greenhouse Gas Emission Standards and Corporate Average Fuel Economy Standards (US EPA, 2013), EPA applies the GWP approach to estimate the benefits associated with reductions of CH4, N2O and HFCs in each calendar year.  Under the GWP Approach, EPA converted CH4, N2O and HFC-134a to CO2 equivalents using the AR4 100-year GWP for each gas: CH4 (25), N2O (298), and HFC-134a (1,430).  These CO2-equivalent emission reductions are multiplied by the SC-CO2 estimate corresponding to each year of emission reductions. As with the calculation of annual benefits of CO2 emission reductions, the annual benefits of non-CO2 emission reductions based on the GWP approach are discounted back to net present value terms using the same discount rate as each SC-CO2 estimate.  The estimated non-CO2 GHG benefits using the GWP approach are presented in Table IX-14 through Table IX-16.  The total net present value of the annual GHG benefits for this proposed rulemaking would increase by about $800 million to $12 billion (2012$), depending on discount rate, or roughly 3 percent if these non-CO2 estimates were included.  

Table IX-14 Annual Upstream and Downstream CH4 Benefits for the Given SC-CO2 Value using Method B and Relative to the Less Dynamic Baseline, Using the GWP Approach[a][,b] (Millions of 2012$)  
                                       
                                      CH4
                                   Calendar
                                     Year
                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%,
                                95th Percentile
                                     2018
                                                                           $0.3
                                                                           $1.1
                                                                           $1.6
                                                                           $3.2
                                     2019
                                                                           $0.6
                                                                           $2.2
                                                                           $3.3
                                                                           $6.6
                                     2020
                                                                           $1.0
                                                                           $3.5
                                                                           $5.2
                                                                            $10
                                     2021
                                                                           $3.1
                                                                            $11
                                                                            $17
                                                                            $33
                                     2022
                                                                           $6.0
                                                                            $20
                                                                            $30
                                                                            $62
                                     2023
                                                                           $8.8
                                                                            $30
                                                                            $45
                                                                            $93
                                     2024
                                                                            $14
                                                                            $46
                                                                            $68
                                                                           $140
                                     2025
                                                                            $19
                                                                            $62
                                                                            $91
                                                                           $190
                                     2026
                                                                            $25
                                                                            $79
                                                                           $120
                                                                           $240
                                     2027
                                                                            $30
                                                                            $99
                                                                           $140
                                                                           $300
                                     2028
                                                                            $36
                                                                           $120
                                                                           $170
                                                                           $360
                                     2029
                                                                            $43
                                                                           $140
                                                                           $200
                                                                           $420
                                     2030
                                                                            $49
                                                                           $160
                                                                           $230
                                                                           $480
                                     2035
                                                                            $82
                                                                           $240
                                                                           $350
                                                                           $760
                                     2040
                                                                           $110
                                                                           $320
                                                                           $440
                                                                           $990
                                     2050
                                                                           $160
                                                                           $440
                                                                           $600
                                                                         $1,400
                                      NPV
                                                                           $730
                                                                         $3,400
                                                                         $5,400
                                                                        $11,000
  a The SC-CO2 values are dollar-year and emissions-year specific.  
Table IX-15 Annual Upstream and Downstream N2O Benefits for the Given SC-CO2 Value using Method B and Relative to the Less Dynamic Baseline, Using the GWP Approach[a][,b] (Millions of 2012$)  
                                       
                                      N2O
                                   Calendar
                                     Year
                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%,
                                95th Percentile
                                     2018
                                                                           $0.0
                                                                           $0.0
                                                                           $0.1
                                                                           $0.2
                                     2019
                                                                           $0.0
                                                                           $0.1
                                                                           $0.2
                                                                           $0.3
                                     2020
                                                                           $0.0
                                                                           $0.2
                                                                           $0.2
                                                                           $0.5
                                     2021
                                                                           $0.1
                                                                           $0.4
                                                                           $0.5
                                                                           $1.1
                                     2022
                                                                           $0.2
                                                                           $0.6
                                                                           $1.0
                                                                           $1.9
                                     2023
                                                                           $0.3
                                                                           $0.9
                                                                           $1.4
                                                                           $2.8
                                     2024
                                                                           $0.4
                                                                           $1.4
                                                                           $2.1
                                                                           $4.4
                                     2025
                                                                           $0.6
                                                                           $2.0
                                                                           $2.9
                                                                           $6.0
                                     2026
                                                                           $0.8
                                                                           $2.6
                                                                           $3.7
                                                                           $7.8
                                     2027
                                                                           $1.0
                                                                           $3.2
                                                                           $4.7
                                                                            $10
                                     2028
                                                                           $1.2
                                                                           $3.9
                                                                           $5.7
                                                                            $12
                                     2029
                                                                           $1.5
                                                                           $4.6
                                                                           $6.6
                                                                            $14
                                     2030
                                                                           $1.6
                                                                           $5.3
                                                                           $7.7
                                                                            $16
                                     2035
                                                                           $2.8
                                                                           $8.3
                                                                            $12
                                                                            $26
                                     2040
                                                                           $3.8
                                                                            $11
                                                                            $15
                                                                            $34
                                     2050
                                                                           $5.6
                                                                            $15
                                                                            $21
                                                                            $47
                                      NPV
                                                                            $25
                                                                           $120
                                                                           $180
                                                                           $360
                  a The SC-CO2 values are dollar-year and emissions-year specific.  
Table IX-16 Annual Upstream and Downstream HFC-134a Benefits for the Given SC-CO2 Value using Method B and Relative to the Less Dynamic Baseline, Using the GWP Approach[a][,b] (Millions of 2012$)  
                                       
                                   HFC-134a
                                   Calendar
                                     Year
                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%,
                                95th Percentile
                                     2018
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                     2019
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                     2020
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                     2021
                                                                           $0.2
                                                                           $0.8
                                                                           $1.3
                                                                           $2.6
                                     2022
                                                                           $0.5
                                                                           $1.7
                                                                           $2.6
                                                                           $5.3
                                     2023
                                                                           $0.8
                                                                           $2.7
                                                                           $4.0
                                                                           $8.1
                                     2024
                                                                           $1.1
                                                                           $3.7
                                                                           $5.4
                                                                            $11
                                     2025
                                                                           $1.4
                                                                           $4.7
                                                                           $6.9
                                                                            $14
                                     2026
                                                                           $1.8
                                                                           $5.9
                                                                           $8.6
                                                                            $18
                                     2027
                                                                           $2.2
                                                                           $7.1
                                                                            $10
                                                                            $22
                                     2028
                                                                           $2.5
                                                                           $8.3
                                                                            $12
                                                                            $25
                                     2029
                                                                           $3.0
                                                                            $10
                                                                            $14
                                                                            $29
                                     2030
                                                                           $3.4
                                                                            $11
                                                                            $16
                                                                            $34
                                     2035
                                                                           $5.2
                                                                            $15
                                                                            $22
                                                                            $48
                                     2040
                                                                           $6.1
                                                                            $18
                                                                            $25
                                                                            $56
                                     2050
                                                                           $8.4
                                                                            $23
                                                                            $31
                                                                            $71
                                      NPV
                                                                            $44
                                                                           $200
                                                                           $320
                                                                           $630
                  a The SC-CO2 values are dollar-year and emissions-year specific.  
Non-CO2 GHG Benefits Based on Directly Modeled Estimates 
Several researchers have directly estimated the social cost of non-CO2 emissions using integrated assessment models (IAMs), though the number of such estimates is small compared to the large number of SC-CO2 estimates available in the literature.  As discussed in previous RIAs (e.g., EPA 2012), there is considerable variation among these published estimates in the models and input assumptions they employ.  These studies differ in the emission perturbation year, employ a wide range of constant and variable discount rate specifications, and consider a range of baseline socioeconomic and emissions scenarios that have been developed over the last 20 years.  However, none of the other published estimates of the social cost of non-CO2 GHG are consistent with the SC-CO2 estimates, and most are likely underestimates due to changes in the underlying science since their publication. 
Recently, a paper by Marten et al. (2014) provided the first set of published SC-CH4 and SC-N2O estimates that are consistent with the modeling assumptions underlying the SC-CO2. Specifically, the estimation approach of Marten et al. (2014) used the same set of three IAMs, five socioeconomic-emissions scenarios, equilibrium climate sensitivity distribution, three constant discount rates, and aggregation approach used to develop the SC-CO2 estimates. 
The resulting SC-CH4 and SC-N2O estimates are presented in Table IX-17. More detailed discussion of their methodology, results and a comparison to other published estimates can be found in the RIA and in Marten et al. (2014).  The tables do not include HFC-134a because EPA is unaware of analogous estimates.
Table IX-17 Social Cost of CH4 and N2O, 2012  -  2050[a] [in 2012$ per metric ton] (Source: Marten et al., 2014)
Year
                                    SC-CH4
                                    SC-N2O

                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%
                                95th percentile
                                      5%
                                    Average
                                  3% Average
                                 2.5% Average
                                      3%
                                95th percentile
2012
                                                                           $440
                                                                          $1000
                                                                          $1400
                                                                          $2800
                                                                          $4000
                                                                         $14000
                                                                         $20000
                                                                         $37000
2015
                                                                            500
                                                                           1200
                                                                           1500
                                                                           3100
                                                                           4400
                                                                          15000
                                                                          22000
                                                                          39000
2020
                                                                            590
                                                                           1300
                                                                           1700
                                                                           3500
                                                                           5200
                                                                          16000
                                                                          24000
                                                                          44000
2025
                                                                            710
                                                                           1500
                                                                          19000
                                                                           4100
                                                                           6000
                                                                          18000
                                                                          27000
                                                                          50000
2030
                                                                            840
                                                                           1700
                                                                           2300
                                                                           4600
                                                                           7000
                                                                          20000
                                                                          29000
                                                                          55000
2035
                                                                            990
                                                                           2000
                                                                           2500
                                                                           5400
                                                                           8100
                                                                          23000
                                                                          32000
                                                                          61000
2040
                                                                           1200
                                                                           2300
                                                                           2800
                                                                           6000
                                                                           9300
                                                                          25000
                                                                          35000
                                                                          67000
2045
                                                                           1300
                                                                           2500
                                                                           3100
                                                                           6800
                                                                          11000
                                                                          27000
                                                                          38000
                                                                          73000
2050
                                                                           1500
                                                                           2700
                                                                           3300
                                                                           7400
                                                                          12000
                                                                         290000
                                                                          41000
                                                                          80000
Notes:
a The values are emissions-year specific and have been rounded to two significant digits. Unrounded numbers were used to calculate the GHG benefits.
The application of directly modeled estimates from Marten et al. (2014) to benefit-cost analysis of a regulatory action is analogous to the use of the SC-CO2 estimates.  Specifically, the SC-CH4 and SC-N2O estimates in Table IX-17 are used to monetize the benefits of changes in CH4 and N2O emissions expected as a result of the proposed rulemaking.  Forecast changes in CH4 and N2O emissions in a given year resulting from the regulatory action are multiplied by the SC-CH4 and SC-N2O estimate for that year, respectively. To obtain a present value estimate, the monetized stream of future non-CO2 benefits are discounted back to the analysis year using the same discount rate used to estimate the social cost of the non-CO2 GHG emission changes.
The CH4 and N2O benefits based on Marten et al. (2014) are presented for each calendar year in Table IX-18. Including these benefits would increase the total net present value of the annual GHG benefits for this proposed rulemaking by about $1.5 billion to $12 billion (2012$), or roughly 4 to 6 percent, depending on discount rate.  

Table IX-18 Annual Upstream and Downstream non-CO2 GHG Benefits for the Given SC-non-CO2 Value using Method B and Relative to the Less Dynamic Baseline, Using the Directly Modeled Approach[a][,b] (Millions of 2012$)  
                                       
                                      CH4
                                      N2O
                                   Calendar
                                     Year
                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%,
                                95th Percentile
                                      5%
                                    Average
                                      3%
                                    Average
                                     2.5%
                                    Average
                                      3%,
                                95th Percentile
                                     2018
                                                                           $0.6
                                                                           $1.3
                                                                           $1.6
                                                                           $3.3
                                                                           $0.0
                                                                           $0.1
                                                                           $0.1
                                                                           $0.2
                                     2019
                                                                           $1.1
                                                                           $2.6
                                                                           $3.4
                                                                           $6.8
                                                                           $0.0
                                                                           $0.1
                                                                           $0.2
                                                                           $0.3
                                     2020
                                                                           $1.8
                                                                           $3.9
                                                                           $5.2
                                                                            $10
                                                                           $0.1
                                                                           $0.2
                                                                           $0.3
                                                                           $0.5
                                     2021
                                                                           $5.8
                                                                            $13
                                                                            $17
                                                                            $35
                                                                           $0.1
                                                                           $0.4
                                                                           $0.6
                                                                           $1.2
                                     2022
                                                                            $11
                                                                            $24
                                                                            $31
                                                                            $65
                                                                           $0.3
                                                                           $0.8
                                                                           $1.1
                                                                           $2.1
                                     2023
                                                                            $17
                                                                            $35
                                                                            $49
                                                                            $97
                                                                           $0.4
                                                                           $1.1
                                                                           $1.7
                                                                           $3.1
                                     2024
                                                                            $26
                                                                            $56
                                                                            $72
                                                                           $150
                                                                           $0.6
                                                                           $1.8
                                                                           $2.5
                                                                           $4.7
                                     2025
                                                                            $35
                                                                            $74
                                                                            $95
                                                                           $200
                                                                           $0.8
                                                                           $2.4
                                                                           $3.5
                                                                           $6.5
                                     2026
                                                                            $46
                                                                            $99
                                                                           $130
                                                                           $260
                                                                           $1.0
                                                                           $3.0
                                                                           $4.5
                                                                           $8.4
                                     2027
                                                                            $57
                                                                           $120
                                                                           $150
                                                                           $320
                                                                           $1.3
                                                                           $4.0
                                                                           $5.8
                                                                            $11
                                     2028
                                                                            $69
                                                                           $140
                                                                           $190
                                                                           $390
                                                                           $1.6
                                                                           $4.8
                                                                           $6.9
                                                                            $13
                                     2029
                                                                            $82
                                                                           $170
                                                                           $220
                                                                           $460
                                                                           $1.9
                                                                           $5.8
                                                                           $8.2
                                                                            $15
                                     2030
                                                                            $95
                                                                           $190
                                                                           $260
                                                                           $520
                                                                           $2.2
                                                                           $6.5
                                                                           $9.3
                                                                            $18
                                     2035
                                                                           $160
                                                                           $330
                                                                           $400
                                                                           $870
                                                                           $3.7
                                                                            $10
                                                                            $15
                                                                            $28
                                     2040
                                                                           $230
                                                                           $430
                                                                           $540
                                                                         $1,200
                                                                           $5.2
                                                                            $14
                                                                            $19
                                                                            $37
                                     2050
                                                                           $350
                                                                           $620
                                                                           $770
                                                                         $1,700
                                                                           $7.9
                                                                            $20
                                                                            $27
                                                                            $53
                                      NPV
                                                                         $1,500
                                                                         $4,600
                                                                         $6,400
                                                                        $12,000
                                                                            $34
                                                                           $150
                                                                           $230
                                                                           $400
  a The SC-CH4 and SC-N2O values are dollar-year and emissions-year specific.  
  b Note that net present discounted values of reduced GHG emissions is are calculated differently than other benefits.  The same discount rate used to discount the value of damages from future emissions (SC-CH4 and SC-N2O at 5, 3, and 2.5 percent) is used to calculate net present value discounted values of SC-CH4 and SC-N2O for internal consistency.  Refer to SCC TSD for more detail.

As illustrated above, compared to the use of directly modeled estimates the GWP-based approximation approach underestimates the climate benefits of the CH4 emission reductions by 14 percent to 50 percent and the climate benefits of N2O reductions by 9 percent to 25 percent, depending on the discount rate assumption.

Additional non-CO2 GHGs Co-benefits
In determining the relative social costs of the different gases, the Marten et al. (2014) analysis accounts for differences in lifetime and radiative efficiency between the non-CO2 GHGs and CO2.  The analysis also accounts for radiative forcing resulting from methane's effects on tropospheric ozone and stratospheric water vapor, and for at least some of the fertilization effects of elevated carbon dioxide concentrations.  However, there exist several other differences between these gases that have not yet been captured in this analysis, namely the non-radiative effects of methane-driven elevated tropospheric ozone levels on human health, agriculture, and ecosystems, and the effects of carbon dioxide on ocean acidification. Inclusion of these additional non-radiative effects would potentially change both the absolute and relative value of the various gases.
    Of these effects, the human health effect of elevated tropospheric ozone levels resulting from methane emissions is the closest to being monetized in a way that would be comparable to the SCC.  Premature ozone-related cardiopulmonary deaths resulting from global increases in tropospheric ozone concentrations produced by the methane oxidation process have been the focus of a number of studies over the past decade (e.g., West et al. 2006).  Recent studies have produced an estimate of a monetized benefit of methane emissions reductions, with results on the order of $1000 per metric ton of CH4 emissions reduced (Anenberg et al. 2012; Shindell et al. 2012), an estimate similar in magnitude to the climate benefits of CH4 reductions estimated by the Marten et al. or GWP methods.  However, though EPA is continuing to monitor this area of research as it evolves, EPA is not applying them for benefit estimates at this time.   

Monetized Non-GHG Health Impacts
This section analyzes the economic benefits from reductions in health and environmental impacts resulting from non-GHG emission reductions that can be expected to occur as a result of the proposed Phase 2 standards.  CO2 emissions are predominantly the byproduct of fossil fuel combustion processes that also produce criteria and hazardous air pollutant emissions.  The vehicles that are subject to the proposed standards are also significant sources of mobile source air pollution such as direct PM, NOX, VOCs and air toxics.  The proposed standards would affect exhaust emissions of these pollutants from vehicles and would also affect emissions from upstream sources that occur during the refining and distribution of fuel.  Changes in ambient concentrations of ozone, PM2.5, and air toxics that would result from the proposed standards are expected to affect human health by reducing premature deaths and other serious human health effects, as well as other important improvements in public health and welfare.   
It is important to quantify the health and environmental impacts associated with the proposed standards because a failure to adequately consider these ancillary impacts could lead to an incorrect assessment of their costs and benefits.  Moreover, the health and other impacts of exposure to criteria air pollutants and airborne toxics tend to occur in the near term, while most effects from reduced climate change are likely to occur only over a time frame of several decades or longer.  
Although EPA typically quantifies and monetizes the health and environmental impacts related to both PM and ozone in its regulatory impact analyses (RIAs), it was unable to do so in time for this proposal.  Instead, EPA has applied PM-related "benefits per-ton" values to its estimated emission reductions as an interim approach to estimating the PM-related benefits of the proposal.[,]  EPA also characterizes the health and environmental impacts that will be quantified and monetized for the final rulemaking.  
This section is split into two sub-sections: the first presents the benefits-per-ton values used to monetize the benefits from reducing population exposure to PM associated with the proposed standards; the second explains what PM- and ozone-related health and environmental impacts EPA will quantify and monetize in the analysis for the final rule.  EPA bases its analyses on peer-reviewed studies of air quality and health and welfare effects and peer-reviewed studies of the monetary values of public health and welfare improvements, and is generally consistent with benefits analyses performed for the analysis of the final Tier 3 Vehicle Rule, the final 2012 PM NAAQS Revision, and the final 2017-2025 Light Duty Vehicle GHG Rule.   
Though EPA is characterizing the changes in emissions associated with toxic pollutants, we are not able to quantify or monetize the human health effects associated with air toxic pollutants for either the proposal or the final rule analyses (see Section VIII.G.1.b.iii for more information).  Please refer to Section VIII for more information about the air toxics emissions impacts associated with the proposed standards.
     Economic Value of Reductions in Criteria Pollutants
As described in Section VIII, the proposed standards would reduce emissions of several criteria and toxic pollutants and their precursors.  In this analysis, EPA estimates the economic value of the human health benefits associated with the resulting reductions in PM2.5 exposure.  Due to analytical limitations with the benefit per ton method, this analysis does not estimate benefits resulting from reductions in population exposure to other criteria pollutants such as ozone.   Furthermore, the benefits per-ton method, like all air quality impact analyses, does not monetize all of the potential health and welfare effects associated with reduced concentrations of PM2.5.
This analysis uses estimates of the benefits from reducing the incidence of the specific PM2.5-related health impacts described below.  These estimates, which are expressed per ton of PM2.5-related emissions eliminated by the proposed rule, represent the monetized value of human health benefits (including reductions in both premature mortality and premature morbidity) from reducing each ton of directly emitted PM2.5 or its precursors (SO2 and NOx), from a specified source.  Ideally, the human health benefits would be estimated based on changes in ambient PM2.5 as determined by full-scale air quality modeling.  However, this modeling was not possible in the timeframe for this proposal.  
The dollar-per-ton estimates used in this analysis are provided in Table IX-19.  As the table indicates, these values differ among pollutants, and also depend on their original source, because emissions from different sources can result in different degrees of population exposure and resulting health impacts.  In the summary of costs and benefits, Section IX.K of this preamble, EPA presents the monetized value of PM-related improvements associated with the proposal.

Table IX-19 Benefits-per-ton Values (Thousands, 2012$)[a]
                                    Year[c]
                            On-road Mobile Sources
                              Upstream Sources[d]

                                 Direct PM2.5
                                      SO2
                                      NOX
                                 Direct PM2.5
                                      SO2
                                      NOx
                 Estimated Using a 3 Percent Discount Rate[b]
                                     2016
                                   $380-$850
                                    $20-$45
                                   $7.7-$18
                                   $330-$750
                                   $69-$160
                                   $6.8-$16
                                     2020
                                   $400-$910
                                    $22-$49
                                   $8.1-$18
                                   $350-$790
                                   $75-$170
                                   $7.4-$17
                                     2025
                                  $440-$1,000
                                    $24-$55
                                   $8.8-$20
                                   $390-$870
                                   $83-$190
                                   $8.1-$18
                                     2030
                                  $480-$1,100
                                    $27-$61
                                   $9.6-$22
                                   $420-$950
                                   $91-$200
                                   $8.7-$20
                 Estimated Using a 7 Percent Discount Rate[b]
                                     2016
                                   $340-$770
                                    $18-$41
                                   $6.9-$16
                                   $290-$670
                                   $63-$140
                                   $6.2-$14
                                     2020
                                   $370-$820
                                    $20-$44
                                   $7.4-$17
                                   $320-$720
                                   $67-$150
                                   $6.6-$15
                                     2025
                                   $400-$910
                                    $22-$49
                                   $8.0-$18
                                   $350-$790
                                   $75-$170
                                   $7.3-$17
                                     2030
                                   $430-$980
                                    $24-$55
                                   $8.6-$20
                                   $380-$850
                                   $81-$180
                                   $7.9-$18
Notes:
a The benefit-per-ton estimates presented in this table are based on a range of premature mortality estimates derived from the ACS study (Krewski et al., 2009) and the Six-Cities study (Lepeule et al., 2012). See Chapter VIII of the RIA for a description of these studies.
b The benefit-per-ton estimates presented in this table assume either a 3 percent or 7 percent discount rate in the valuation of premature mortality to account for a twenty-year segmented premature mortality cessation lag.  
[c] Benefit-per-ton values were estimated for the years 2016, 2020, 2025 and 2030.  We hold values constant for intervening years (e.g., the 2016 values are assumed to apply to years 2017-2019; 2020 values for years 2021-2024; 2030 values for years 2031 and beyond). 
[d] We assume for the purpose of this analysis that total "upstream emissions" are most appropriately monetized using the refinery sector benefit per-ton values.  The majority of upstream emission reductions associated with the NPRM are related to domestic onsite refinery emissions and domestic crude production.  While total upstream emissions also include storage and transport sources, as well as sources upstream from the refinery, we have chosen to simply apply the refinery values.  Full-scale air quality modeling, and the associated benefits analysis, will include upstream emissions from all sources in the FRM.


The benefit-per-ton technique has been used in previous analyses, including EPA's 2017-2025 Light-Duty Vehicle Greenhouse Gas Rule, the Reciprocating Internal Combustion Engine rules,[,] and the Residential Wood Heaters NSPS.  Table IX-20 shows the quantified PM2.5-related co-benefits captured in those benefit per-ton estimates, as well as unquantified effects the benefit per-ton estimates are unable to capture.
Table IX-20 Human Health and Welfare Effects of PM2.5
Pollutant / Effect
Quantified and Monetized 
in Primary Estimates
Unquantified Effects 
Changes in:
PM2.5 
Adult premature mortality 
Acute bronchitis
Hospital admissions: respiratory and cardiovascular
Emergency room visits for asthma
Nonfatal heart attacks (myocardial infarction)
Lower and upper respiratory illness
Minor restricted-activity days
Work loss days
Asthma exacerbations (asthmatic population)
Infant mortality
Chronic and subchronic bronchitis cases
Strokes and cerebrovascular disease
Low birth weight
Pulmonary function
Chronic respiratory diseases other than chronic bronchitis
Non-asthma respiratory emergency room visits
Visibility
Household soiling

A more detailed description of the benefit-per-ton estimates is provided in Chapter VIII of the Draft RIA that accompanies this rulemaking.  Readers interested in reviewing the complete methodology for creating the benefit-per-ton estimates used in this analysis can consult EPA's "Technical Support Document: Estimating the Benefit per Ton of Reducing PM2.5 Precursors from 17 Sectors."  Readers can also refer to Fann et al. (2012) for a detailed description of the benefit-per-ton methodology.  
As Table IX-18 indicates, EPA projects that the per-ton values for reducing emissions of non-GHG pollutants from both vehicle use and upstream sources such as fuel refineries will increase over time.  These projected increases reflect rising income levels, which increase affected individuals' willingness to pay for reduced exposure to health threats from air pollution.  They also reflect future population growth and increased life expectancy, which expands the size of the population exposed to air pollution in both urban and rural areas, especially among older age groups with the highest mortality risk.  
     Human Health and Environmental Benefits for the Final Rule 
Human Health and Environmental Impacts 
To model the ozone and PM air quality benefits of the final rule, EPA will use the Community Multiscale Air Quality (CMAQ) model (see Section VIII for a description of the CMAQ model).  The modeled ambient air quality data will serve as an input to the Environmental Benefits Mapping and Analysis Program  -  Community Edition (BenMAP CE).  BenMAP CE is a computer program developed by EPA that integrates a number of the modeling elements used in previous RIAs (e.g., interpolation functions, population projections, health impact functions, valuation functions, analysis and pooling methods) to translate modeled air concentration estimates into health effects incidence estimates and monetized benefits estimates.  
Chapter VIII in the DRIA that accompanies this proposal lists the co-pollutant health effect concentration-response functions EPA will use to quantify the non-GHG incidence impacts associated with the proposed heavy-duty vehicle standards.  These include PM- and ozone-related premature mortality, nonfatal heart attacks, hospital admissions (respiratory and cardiovascular), emergency room visits, acute bronchitis, minor restricted activity days, and days of work and school lost.
Monetized Impacts
To calculate the total monetized impacts associated with quantified health impacts, EPA applies values derived from a number of sources.  For premature mortality, EPA applies a value of a statistical life (VSL) derived from the mortality valuation literature.  For certain health impacts, such as a number of respiratory-related ailments, EPA applies willingness-to-pay estimates derived from the valuation literature.  For the remaining health impacts, EPA applies values derived from current cost-of-illness and/or wage estimates.  Chapter VIII in the DRIA that accompanies this proposal presents the monetary values EPA will apply to changes in the incidence of health and welfare effects associated with reductions in non-GHG pollutants that will occur when these GHG control strategies are finalized.
Other Unquantified Health and Environmental Impacts
In addition to the co-pollutant health and environmental impacts EPA will quantify for the analysis of the final standard, there are a number of other health and human welfare endpoints that EPA will not be able to quantify or monetize because of current limitations in the methods or available data.  These impacts are associated with emissions of air toxics (including benzene, 1,3-butadiene, formaldehyde, acetaldehyde, acrolein, naphthalene and ethanol), ambient ozone, and ambient PM2.5 exposures.  Chapter VIII of the DRIA lists these unquantified health and environmental impacts.
While there will be impacts associated with air toxic pollutant emission changes that result from the final standard, EPA will not attempt to monetize those impacts.  This is primarily because currently available tools and methods to assess air toxics risk from mobile sources at the national scale are not adequate for extrapolation to incidence estimations or benefits assessment.  The best suite of tools and methods currently available for assessment at the national scale are those used in the National-Scale Air Toxics Assessment (NATA).  EPA's Science Advisory Board specifically commented in their review of the 1996 NATA that these tools were not yet ready for use in a national-scale benefits analysis, because they did not consider the full distribution of exposure and risk, or address sub-chronic health effects.   While EPA has since improved the tools, there remain critical limitations for estimating incidence and assessing benefits of reducing mobile source air toxics.  EPA continues to work to address these limitations; however, EPA does not anticipate having methods and tools available for national-scale application in time for the analysis of the final rules.  
Energy Security Impacts
The Phase 2 standards are designed to require improvements in the fuel efficiency of medium- and heavy-duty vehicles and, thereby, reduce fuel consumption and GHG emissions. In turn, the Phase 2 standards help to reduce U.S. petroleum imports.  A reduction of U.S. petroleum imports reduces both financial and strategic risks caused by potential sudden disruptions in the supply of imported petroleum to the U.S., thus increasing U.S. energy security.  This section summarizes the agency's estimates of U.S. oil import reductions and energy security benefits of the proposed Phase 2 standards.  Additional discussion of this issue can be found in Chapter 8 of the draft RIA.
         Implications of Reduced Petroleum Use on U.S. Imports
U.S. energy security is broadly defined as the continued availability of energy sources at an acceptable price.  Most discussion of U.S. energy security revolves around the topic of the economic costs of U.S. dependence on oil imports.  However, it is not imports alone, but both imports and consumption of petroleum from all sources and their role in economic activity, that expose the U.S. to risk from price shocks in the world oil price. The relative significance of petroleum consumption and import levels for the macroeconomic disturbances that follow from oil price shocks is not fully understood.  Recognizing that changing petroleum consumption will change U.S. imports, this assessment of oil costs focuses on those incremental social costs that follow from the resulting changes in imports, employing the usual oil import premium measure. The agencies request comment on how to incorporate the impact of changes in oil consumption, rather than imports exclusively, into our energy security analysis. 
While the U.S. has reduced its consumption and increased its production of oil in recent years, it still relies on oil from potentially unstable sources.  In addition, oil exporters with a large share of global production have the ability to raise the price of oil by exerting the monopoly power associated with a cartel, the Organization of Petroleum Exporting Countries (OPEC), to restrict oil supply relative to demand.  These factors contribute to the vulnerability of the U.S. economy to episodic oil supply shocks and price spikes. In 2012, U.S. net expenditures for imports of crude oil and petroleum products were $290 billion and expenditures on both imported oil and domestic petroleum and refined products totaled $634 billion (see Figure IX-1).  Import costs have declined since 2011 but total oil expenditures (domestic and imported) remain near historical highs, at roughly triple the inflation-adjusted levels experienced by the U.S. from 1986 to 2002. 
In 2010, just over 40 percent of world oil supply came from OPEC nations and the AEO 2014 (Early Release) projects that this share will rise gradually to over 45 percent by 2040.  Approximately 31 percent of global supply is from Middle East and North African countries alone, a share that is also expected to grow.  Measured in terms of the share of world oil resources or the share of global oil export supply, rather than oil production, the concentration of global petroleum resources in OPEC nations is even larger.  As another measure of concentration, of the 137 countries/principalities that export either crude or refined products, the top 12 have recently accounted for over 55 percent of exports.  Eight of these countries are members of OPEC, and a ninth is Russia.  In a market where even a 1-2 percent supply loss can raise prices noticeably, and where a 10 percent supply loss could lead to an unprecedented price shock, this regional concentration is of concern.  Historically, the countries of the Middle East have been the source of eight of the ten major world oil disruptions, with the ninth originating in Venezuela, an OPEC country, and the tenth being Hurricanes Katrina and Rita.

                           	Figure IX-1: U.S. Expenditures on Crude Oil from 1970 through 2015
The agencies used EPA's MOVES model to estimate the reductions in U.S. fuel consumption due to this proposed rule for vocational vehicles and tractors. For HD pickups and vans, the agencies used both DOT's CAFE model and EPA's MOVES model to estimate the fuel consumption impacts. (Detailed explanations of the MOVES and CAFE models can be found in Chapters 5 and 10 of the draft RIA.  See IX.C of the preamble for estimates of reduced fuel consumption from the proposed rule).  Based on a detailed analysis of differences in U.S. fuel consumption, petroleum imports, and imports of  petroleum products, the agencies estimate that approximately 90 percent of the reduction in fuel consumption resulting from adopting improved GHG emissions standards and fuel efficiency standards is likely to be reflected in reduced U.S. imports of crude oil and net imported petroleum products.  Thus, on balance, each gallon of fuel saved as a consequence of the HD GHG and fuel efficiency standards is anticipated to reduce total U.S. imports of petroleum by 0.90 gallons.  Based upon the fuel savings estimated by the MOVES/CAFE models and the 90 percent oil import factor, the reduction in U.S. oil imports from this proposed rule are estimated for the years 2020, 2025, 2030, 2040, and 2050 (in millions of barrels per day (MMBD)) in Table IX-23 below.  For comparison purposes, Table IX-23 also shows U.S. imports of crude oil in 2020, 2025, 2030 and 2040 as projected by DOE in the Annual Energy Outlook 2014 (Early Release) Reference Case. U.S. Gross Domestic Product (GDP) is projected to grow by roughly 59 percent over the same time frame (e.g., from 2020 to 2040) in the same AEO projections.
Table IX-21 Projected U.S. Imports of Crude Oil and U.S. Oil Import Reductions Resulting from the Proposed Phase Two Heavy-Duty Vehicle Rule in 2020, 2025, 2030, 2040 and 2050 using Method B and Relative to the Less Dynamic Baseline
(Millions of barrels per day (MMBD)
                                     Year
                               U.S. Oil Imports

                       Reductions from Proposed HD Rule
                                     2020
                                     4.93
                                     0.01
                                     2025
                                     5.04
                                     0.16
                                     2030
                                     5.35
                                     0.37
                                     2040
                                     5.92
                                     0.65
                                     2050
                                       *
                                     0.78
                 * The AEO 2014 (Early Release) only projects energy market and economic trends through 2040.
         Energy Security Implications
     In order to understand the energy security implications of reducing U.S. oil imports, EPA has worked with Oak Ridge National Laboratory (ORNL), which has developed approaches for evaluating the social costs and energy security implications of oil use.  The energy security estimates provided below are based upon a methodology developed in a peer-reviewed study entitled, "The Energy Security Benefits of Reduced Oil Use, 2006-2015," completed in March 2008.  This ORNL study is an updated version of the approach used for estimating the energy security benefits of U.S. oil import reductions developed in a 1997 ORNL Report.  For EPA and NHTSA rulemakings, the ORNL methodology is updated periodically to account for forecasts of future energy market and economic trends reported in the U.S. Energy Information Administration's Annual Energy Outlook. 
When conducting this analysis, ORNL considered the full cost of importing petroleum into the U.S.  The full economic cost is defined to include two components in addition to the purchase price of petroleum itself.  These are: (1) the higher costs for oil imports resulting from the effect of U.S. demand on the world oil price (i.e., the "demand" or "monopsony" costs); and (2) the risk of reductions in U.S. economic output and disruption to the U.S. economy caused by sudden disruptions in the supply of imported oil to the U.S. (i.e., macroeconomic disruption/adjustment costs).  
The literature on the energy security for the last two decades has routinely combined the monopsony and the macroeconomic disruption components when calculating the total value of the energy security premium.  However, in the context of using a global value for the Social Cost of Carbon (SCC) the question arises: how should the energy security premium be used when some benefits from the rule, such as the benefits of reducing greenhouse gas emissions, are calculated from a global perspective?  Monopsony benefits represent avoided payments by U.S. consumers to oil producers that result from a decrease in the world oil price as the U.S. decreases its demand for oil.  Although there is clearly an overall benefit to the U.S. when considered from a domestic perspective, the decrease in price due to decreased demand in the U.S. also represents a loss to oil producing countries, one of which is the United States.  Given the redistributive nature of this monopsony effect from a global perspective, and the fact that an increasing fraction of it represents a transfer between U.S. consumers and producers, it is excluded in the energy security benefits calculations for this proposed rule.  
In contrast, the other portion of the energy security premium, the avoided U.S. macroeconomic disruption and adjustment cost that arises from reductions in U.S. petroleum imports, does not have offsetting impacts outside of the U.S., and, thus, is included in the energy security benefits estimated for this proposed rule.  To summarize, the agencies have included only the avoided macroeconomic disruption portion of the energy security benefits to estimate the monetary value of the total energy security benefits of this proposed rule.  
	For this rulemaking, ORNL updated the energy security premiums by incorporating the most recent oil price forecast and energy market trends, particularly regional oil supplies and demands, from the AEO 2014 (Early Release) into its model. ORNL developed energy security premium estimates for a number of different years.  Table IX-22 provides estimates for energy security premiums for the years 2020, 2025, 2030 and 2040, as well as a breakdown of the components of the energy security premiums for each year.  The components of the energy security premiums and their values are discussed below.  
Table IX-22 Energy Security Premiums in 2020, 2025, 2030 and 2040 (2012$/Barrel)*
                                 Year (range)
                                   Monopsony
                                    (Range)
               Avoided Macroeconomic Disruption/Adjustment Costs
                                    (Range)
                                Total Mid-Point
                                    (Range)
2020
                                     $4.91
                                (1.63  -  9.15)
                                     $6.35
                               (3.07  -  10.15)
                                    $11.25
                               (6.67  -  16.53)
2025
                                     $5.46
                               (1.81  -  10.47)
                                     $7.29
                               (3.57  -  11.67)
                                    $12.75
                               (7.58  -  18.65)
2030
                                     $6.04
                               (2.00  -  11.67)
                                     $8.39
                               (4.12  -  13.41)
                                    $14.43
                               (8.54  -  21.13)
2040
                                     $7.17
                               (2.32  -  14.03)
                                    $10.74
                               (5.36  -  17.22)
                                    $17.91
                                   -  26.14)
      * Top values in each cell are the midpoints, the values in parentheses are the 90 percent confidence intervals.
(a) Effect of Oil Use on the Long-Run Oil Price
The first component of the full economic costs of importing petroleum into the U.S. follows from the effect of U.S. import demand on the world oil price over the long-run.  Because the U.S. is a sufficiently large purchaser of global oil supplies, its purchases can affect the world oil price.  This monopsony power means that increases in U.S. petroleum demand can cause the world price of crude oil to rise, and conversely, that reduced U.S. petroleum demand can reduce the world price of crude oil.  Thus, one benefit of decreasing U.S. oil purchases, due to improvements in the fuel efficiency of medium- and heavy-duty vehicles, is the potential decrease in the crude oil price paid for all crude oil purchased.
A variety of oil market and economic factors have contributed to lowering the estimated monopsony premium compared to monopsony premiums cited in recent EPA/NHTSA rulemakings.  Three principal factors contribute to lowering the monopsony premium: lower world oil prices, lower U.S. oil imports and less responsiveness of world oil prices to changes in U.S. oil demand.  For example, between 2012 (using the AEO 2012 (Early Release)) and 2014 (using the AEO 2014 (Early Release)), there has been a general downward revision in world oil price projections in the near term (e.g. 19 percent in 2020) and a sharp reduction in projected U.S. oil imports in the near term, due to increased U.S. supply (i.e., a 41 percent reduction in U.S. oil imports by 2017 and a 36 percent reduction in 2020).  Over the longer term, oil's share of total U.S. imports is projected to gradually increase after 2020 but still remain 27 percent below the AEO2012 (Early Release) projected level in 2035.
Another factor influencing the monopsony premium is that U.S. demand on the global oil market is projected to decline, suggesting diminished overall influence and some reduction in the influence of U.S. oil demand on the world price of oil.  Outside of the U.S., projected OPEC supply remains roughly steady as a share of world oil supply compared to the AEO2012 (Early Release).  OPEC's share of world oil supply outside of the U.S. actually increases slightly.  Since OPEC supply is estimated to be more price sensitive than non-OPEC supply, this means that under AEO2014 (Early Release) world oil supply is slightly more responsive to changes in U.S. oil demand.  Together, these factors suggest that changes in U.S. oil import reductions have a somewhat smaller effect on the long-run world oil price than changes based on 2012 estimates. 
These changes in oil price and import levels lower the monopsony portion of energy security premium since this portion of the security premium is related to the change in total U.S. oil import costs that is achieved by a marginal reduction in U.S oil imports.  Since both the price and the quantity of oil imports are lower, the monopsony premium component is 46  -  57 percent lower over the years 2017  -  2025 than the estimates based upon the AEO 2012 (Early Release) projections.  
There is disagreement in the literature about the magnitude of the monopsony component, and its relevance for policy analysis. Brown and Huntington (2013),  for example, argue that the United States' refusal to exercise its market power to reduce the world oil price does not represent a proper externality, and that the monopsony component should not be considered in calculations of the energy security externality.  However, they also note in their earlier discussion paper (Brown and Huntington 2010) that this is a departure from the traditional energy security literature, which includes sustained wealth transfers associated with stable but higher-price oil markets. On the other hand, Greene (2010) and others in prior literature (e.g., Toman 1993) have emphasized that the monopsony cost component is policy-relevant because the world oil market is non-competitive and strongly influenced by cartelized and government-controlled supply decisions.  Thus, while sometimes couched as an externality, Greene notes that the monopsony component is best viewed as stemming from a completely different market failure than an externality (Ledyard 2008), yet still implying marginal social costs to importers.
There is also a question about the ability of gradual, long-term reductions, such as those resulting from this proposed rule, to reduce the world oil price in the presence of OPEC's monopoly power.  OPEC is currently the world's marginal petroleum supplier, and could conceivably respond to gradual reductions in U.S. demand with gradual reductions in supply over the course of several years as the fuel savings resulting from this rule grow.  However, if OPEC opts for a long-term strategy to preserve its market share, rather than maintain a particular price level (as they have done recently in response to increasing U.S. petroleum production), reduced demand would create downward pressure on the global price.  The Oak Ridge analysis assumes that OPEC does respond to demand reductions over the long run, but there is still a price effect in the model.  Under the mid-case behavioral assumption used in the premium calculations, OPEC responds by gradually reducing supply to maintain market share (consistent with the long-term self-interested strategy suggested by Gately (2004, 2007)).  
It is important to note that the decrease in global petroleum prices resulting from this rulemaking could spur increased consumption of petroleum in other sectors and countries, leading to a modest uptick in GHG emissions outside of the United States.  This increase in global fuel consumption could offset some portion of the GHG reduction benefits associated with this proposed rule.  The agencies have not quantified this increase in global GHG emissions. We request comments, data sources and methodologies for how global rebound effects may be quantified.
   (b) Macroeconomic Disruption Adjustment Costs  
The second component of the oil import premium, "avoided macroeconomic disruption/adjustment costs", arises from the effect of oil imports on the expected cost of supply disruptions and accompanying price increases.  A sudden increase in oil prices triggered by a disruption in world oil supplies has two main effects: (1) it increases the costs of oil imports in the short-run and (2) it can lead to macroeconomic contraction, dislocation and Gross Domestic Product (GDP) losses.  For example, ORNL estimates the combined value of these two factors to be $6.34/barrel when U.S. oil imports are reduced in 2020, with a range from $3.07/barrel to $10.15/barrel of imported oil reduced.
Since future disruptions in foreign oil supplies are an uncertain prospect, each of the disruption cost components must be weighted by the probability that the supply of petroleum to the U.S. will actually be disrupted.  Thus, the "expected value" of these costs  -  the product of the probability that a supply disruption will occur and the sum of costs from reduced economic output and the economy's abrupt adjustment to sharply higher petroleum prices  -  is the relevant measure of their magnitude.  Further, when assessing the energy security value of a policy to reduce oil use, it is only the change in the expected costs of disruption that results from the policy that is relevant.  The expected costs of disruption may change from lowering the normal (i.e., pre-disruption) level of domestic petroleum use and imports, from any induced alteration in the likelihood or size of disruption, or from altering the short-run flexibility (e.g., elasticity) of petroleum use.
With updated oil market and economic factors, the avoided macroeconomic disruption component of the energy security premiums is slightly lower in comparison to avoided macroeconomic disruption premiums used in previous rulemakings.  Factors that contribute to moderately lowering the avoided macroeconomic disruption component are lower projected GDP, moderately lower oil prices and slightly smaller price increases during prospective shocks.  For example, oil price levels are 5  -  19 percent lower over the 2020  -  2035 period, and the likely increase in oil prices in the event of an oil shock are somewhat smaller, given small increases in the responsiveness of oil supply to changes in the world price of oil.  Overall, the avoided macroeconomic disruption component estimates for the oil security premiums are 2  -  19 percent lower over the period from 2020  -  2035 based upon different projected oil market and economic trends in the AEO2014 (Early Release) compared to the AEO2012 (Early Release).  
There are several reasons why the avoided macroeconomic disruption premiums change only moderately.  One reason is that the macroeconomic sensitivity to oil price shocks is assumed unchanged in recent years since U.S. oil consumption levels and the value share of oil in the U.S. economy remain at high levels.  For example, Figure IX-2 below shows that under AEO2014 (Early Release), projected U.S. real annual oil expenditures continue to rise after 2015 to over $800 billion (2012$) by 2030.  The value share of oil use in the U.S. economy remains between three and four percent, well above the levels observed from 1985 to 2005.  A second factor is that oil disruption risks are little changed.  The two factors influencing disruption risks are the probability of global supply interruptions and the world oil supply share from OPEC. Both factors are not significantly different from previous forecasts of oil market trends.
The energy security costs estimated here follow the oil security premium framework, which is well established in the energy economics literature.  The oil import premium gained attention as a guiding concept for energy policy around the time of the second and third major post-war oil shocks (Plummer 1981, Bohi and Montgomery 1982, EMF 1982) .  Plummer (1981, 1981a) provided valuable discussion of many of the key issues related to the oil import premium as well as the analogous oil stockpiling premium.  Bohi and Montgomery (Bohi and Montgomery, 1982) detailed the theoretical foundations of the oil import premium established many of the critical analytic relationships through their thoughtful analysis.  Hogan (1981) and Broadman and Hogan (1986, 1988) revised and extended the established analytical framework to estimate optimal oil import premia with a more detailed accounting of macroeconomic effects.  
Since the original work on energy security was undertaken in the 1980's, there have been several reviews on this topic. For example, Leiby, Jones, Curlee and Lee (1997) provided an extended review of the literature and issues regarding the estimation of the premium.  Parry and Darmstadter (2004) also provided an overview of extant oil security premium estimates and estimated of some premium components.  
The recent economics literature on whether oil shocks are a threat to economic stability that they once were is mixed.  Some of the current literature asserts that the macroeconomic component of the energy security externality is small. For example, the National Research Council (2009) argued that the non-environmental externalities associated with dependence on foreign oil are small, and potentially trivial.  Analyses by Nordhaus (2007) and Blanchard and Gali (2010) question the impact of more recent oil price shocks on the economy.  They were motivated by attempts to explain why the economy actually expanded immediately after the last shocks, and why there was no evidence of higher energy prices being passed on through higher wage inflation.  Using different methodologies, they conclude that the economy has largely gotten over its concern with dramatic swings in oil prices.
One reason, according to Nordhaus, is that monetary policy has become more accommodating to the price impacts of oil shocks.  Another is that consumers have simply decided that such movements are temporary, and have noted that price impacts are not passed on as inflation in other parts of the economy.  He also notes that real changes to productivity due to oil price increases are incredibly modest, and that the general direction of the economy matters a great deal regarding how the economy responds to a shock.  Estimates of the impact of a price shock on aggregate demand are insignificantly different from zero.
Blanchard and Gali (2010) contend that improvements in monetary policy (as noted above), more flexible labor markets, and lessening of energy intensity in the economy, combined with an absence of concurrent shocks, all contributed to lessen the impact of oil shocks after 1980.  They find "... the effects of oil price shocks have changed over time, with steadily smaller effects on prices and wages, as well as on output and employment."  In a comment at the chapter's end, this work is summarized as follows: "The message of this chapter is thus optimistic in that it suggests a transformation in U.S. institutions has inoculated the economy against the responses that we saw in the past."
At the same time, the implications of the "Shale Oil Revolution" are now being felt in the international markets, with current prices at four year lows.  Analysts generally attribute this result in part to the significant increase in supply resulting from U.S. production, which has put liquid petroleum production on par with Saudi Arabia.  The price decline is also attributed to the sustained reductions in U.S. consumption and global demand growth from fuel efficiency policies and high oil prices.  The resulting decrease in foreign imports, down to about one-third of domestic consumption (from 60 percent in 2005, for example), effectively permits U.S. supply to act as a buffer against artificial or other supply restrictions (the latter due to conflict or natural disaster, for example).
However, other papers suggest that oil shocks, particularly sudden supply shocks, remain a concern.  Both Blanchard and Gali's and Nordhaus work were based on data and analysis through 2006, ending with a period of strong global economic growth and growing global oil demand. The Nordhaus work particularly stressed the effects of the price increase from 2002-2006 that were comparatively gradual (about half the growth rate of the 1973 event and one-third that of the 1990 event). The Nordhaus study emphasizes the robustness of the U.S. economy during a time period through 2006. This time period was just before rapid further increases in the price of oil and other commodities with oil prices more-than-doubling to over $130/barrel by mid-2008, only to drop after the onset of the largest recession since the Great Depression.  
Hamilton (2012) reviewed the empirical literature on oil shocks and suggested that the results are mixed, noting that some work (e.g. Rasmussen and Roitman (2011) finds less evidence for economic effects of oil shocks, or declining effects of shocks (Blanchard and Gali 2010), while other work continues to find evidence regarding the economic importance of oil shocks.  For example, Baumeister and Peersman (2011) found that an oil price increase of a given size seems to have a decreasing eﬀect over time, but noted that the declining price-elasticity of demand meant that a given physical disruption had a bigger eﬀect on price and turned out to have a similar eﬀect on output as in the earlier data."  Hamilton observes that "a negative effect of oil prices on real output has also been reported for a number of other countries, particularly when nonlinear functional forms have been employed" (citing as recent examples Kim 2012, Engemann, Kliesen, and Owyang 2011 and Daniel, et. al. 2011).  Alternatively, rather than a declining effect, Ramey and Vine (2010) found "remarkable stability in the response of aggregate real variables to oil shocks once we account for the extra costs imposed on the economy in the 1970s by price controls and a complex system of entitlements that led to some rationing and shortages."
Some of the recent literature on oil price shocks has emphasized that economic impacts depend on the nature of the oil shock, with differences between price increases caused by sudden supply loss and those caused by rapidly growing demand.  Most recent analyses of oil price shocks have confirmed that "demand-driven" oil price shocks have greater effects on oil prices and tend to have positive effects on the economy while "supply-driven" oil shocks still have negative economic impacts (Baumeister, Peersman and Robays, 2010).  A recent paper by Kilian and Vigfusson (2014), for example, assigned a more prominent role to the effects of price increases that are unusual, in the sense of being beyond range of recent experience.  Kilian and Vigfussen also conclude that the difference in response to oil shocks may well stem from the different effects of demand- and supply-based price increases: "One explanation is that oil price shocks are associated with a range of oil demand and oil supply shocks, some of which stimulate the U.S. economy in the short run and some of which slow down U.S. growth (see Kilian 2009a). How recessionary the response to an oil price shock is thus depends on the average composition of oil demand and oil supply shocks over the sample period."  
The general conclusion that oil supply-driven shocks reduce economic output is also reached in a recently published paper by Cashin et al. (2014) for 38 countries from 1979-2011.  "The results indicate that the economic consequences of a supply-driven oil-price shock are very different from those of an oil-demand shock driven by global economic activity, and vary for oil-importing countries compared to energy exporters," and "oil importers [including the U.S.] typically face a long-lived fall in economic activity in response to a supply-driven surge in oil prices" but almost all countries see an increase in real output for an oil-demand disturbance. Note that the energy security premium calculation in this analysis is based on price shocks from potential future supply events only.
Finally, despite continuing uncertainty about oil market behavior and outcomes and the sensitivity of the U.S. economy to oil shocks, it is generally agreed that it is beneficial to reduce petroleum fuel consumption from an energy security standpoint.  Reducing fuel consumption reduces the amount of domestic economic activity associated with a commodity whose price depends on volatile international markets. Also, reducing U.S. oil import levels reduces the likelihood and significance of supply disruptions. 







Figure IX-2:  Projected and Historical U.S. Expenditures, and Expenditure Share, on Crude Oil
(c) Cost of Existing U.S. Energy Security Policies
The last often-identified component of the full economic costs of U.S. oil imports are the costs to the U.S. taxpayers of existing U.S. energy security policies.  The two primary examples are maintaining the Strategic Petroleum Reserve (SPR) and maintaining a military presence to help secure a stable oil supply from potentially vulnerable regions of the world.  The SPR is the largest stockpile of government-owned emergency crude oil in the world.  Established in the aftermath of the 1973/1974 oil embargo, the SPR provides the U.S. with a response option should a disruption in commercial oil supplies threaten the U.S. economy.  It also allows the U.S. to meet part of its International Energy Agency obligation to maintain emergency oil stocks, and it provides a national defense fuel reserve.  While the costs for building and maintaining the SPR are more clearly related to U.S. oil use and imports, historically these costs have not varied in response to changes in U.S. oil import levels.  Thus, while the effect of the SPR in moderating price shocks is factored into the ORNL analysis, the cost of maintaining the SPR is excluded.
U.S. military costs are excluded from the analysis performed by ORNL because their attribution to particular missions or activities is difficult, and because it is not clear that these outlays would decline in response to incremental reductions in U.S. oil imports.  Most military forces serve a broad range of security and foreign policy objectives.  The agencies also recognize that attempts to attribute some share of U.S. military costs to oil imports are further challenged by the need to estimate how those costs might vary with incremental variations in U.S. oil imports.
       (3) Energy Security Benefits of this Program  
Using the ORNL "oil premium" methodology, updating world oil price values and energy trends using AEO 2014 (Early Release) and using the estimated fuel savings from the proposed rule estimated from the MOVES/CAFE models, the agencies has calculated the annual energy security benefits of this proposed rule through 2050.  Since the agencies are taking a global perspective with respect to valuing greenhouse gas benefits from the rule, only the avoided macroeconomic adjustment/disruption portion of the energy security premium is used in the energy security benefits estimates present below.  These results are shown below in Table IX-23. The agencies have also calculated the net present value at 3 percent and 7 percent discount rates of model year lifetime benefits associated with energy security; these values are presented in Table IX-24.

Table IX-23 Annual U.S. Energy Security Benefits of the Preferred Alternative and Net Present Values at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline (in millions of 2012$)
                                     YEAR
                               BENEFITS (2012$)
                                     2018
                                                                            $10
                                     2019
                                                                            $20
                                     2020
                                                                            $31
                                     2021
                                                                            $77
                                     2022
                                                                           $140
                                     2023
                                                                           $211
                                     2024
                                                                           $328
                                     2025
                                                                           $456
                                     2026
                                                                           $596
                                     2027
                                                                           $770
                                     2028
                                                                           $947
                                     2029
                                                                         $1,126
                                     2030
                                                                         $1,306
                                     2035
                                                                         $2,156
                                     2040
                                                                         $2,920
                                     2050
                                                                         $3,498
                                    NPV, 3%
                                                                        $28,947
                                    NPV, 7%
                                                                        $11,857

Table IX-24:  Discounted Model Year Lifetime Energy Security Benefits due to the Preferred Alternative at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline (Millions of 2012$)
                                   Calendar
                                     Year
                                      3%
                                 Discount Rate
                                      7%
                                 Discount Rate
                                     2018
                                                                            $86
                                                                            $60
                                     2019
                                                                            $85
                                                                            $56
                                     2020
                                                                            $84
                                                                            $53
                                     2021
                                                                           $534
                                                                           $326
                                     2022
                                                                           $579
                                                                           $341
                                     2023
                                                                           $621
                                                                           $353
                                     2024
                                                                           $996
                                                                           $546
                                     2025
                                                                         $1,060
                                                                           $560
                                     2026
                                                                         $1,121
                                                                           $571
                                     2027
                                                                         $1,375
                                                                           $676
                                     2028
                                                                         $1,388
                                                                           $657
                                     2029
                                                                         $1,397
                                                                           $637
                                      Sum
                                                                         $9,325
                                                                         $4,837

Other Impacts
Costs of Noise, Congestion and Accidents Associated with Additional (Rebound) Driving
Although it provides benefits to drivers as described above, increased vehicle use associated with the rebound effect also contributes to increased traffic congestion, motor vehicle accidents, and highway noise.  Depending on how the additional travel is distributed over the day and where it takes place, additional vehicle use can contribute to traffic congestion and delays by increasing the number of vehicles using facilities that are already heavily traveled.  These added delays impose higher costs on drivers and other vehicle occupants in the form of increased travel time and operating expenses.  At the same time, this additional travel also increases costs associated with traffic accidents and vehicle noise. 
The agencies estimate these costs using the same methodology as used in the two light-duty and the HD Phase 1 rule analyses, which relies on estimates of congestion, accident, and noise costs imposed by automobiles and light trucks developed by the Federal Highway Administration to estimate these increased external costs caused by added driving.  We provide the details behind the estimates in Chapter 8.7 of the draft RIA.  The agencies request comment on all input metrics used in the analysis of accidents, congestion and noise and on the calculation methodology.  Table IX-25 presents the estimated annual impacts associated with accidents, congestion and noise along with net present values at both 3 percent and 7 percent discount rates.  Table IX-26 presents the estimated discounted model year lifetime impacts associated with accidents, congestion and noise. 
Table IX-25 Annual Costs Associated with Accidents, Congestion and Noise and Net Present Values at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline (Millions of 2012$)
                                   Calendar
                                     Year
                                   Costs of
                            Accidents, Congestion,
                                   And Noise
                                     2018
                                                                             $0
                                     2019
                                                                             $0
                                     2020
                                                                             $0
                                     2021
                                                                           $117
                                     2022
                                                                           $172
                                     2023
                                                                           $226
                                     2024
                                                                           $279
                                     2025
                                                                           $330
                                     2026
                                                                           $379
                                     2027
                                                                           $425
                                     2028
                                                                           $467
                                     2029
                                                                           $506
                                     2030
                                                                           $542
                                     2035
                                                                           $676
                                     2040
                                                                           $758
                                     2050
                                                                           $871
                                    NPV, 3%
                                                                         $9,334
                                    NPV, 7%
                                                                         $4,202

Table IX-26 Discounted Model Year Lifetime Costs of Accidents, Congestion and Noise at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline (Millions of 2012$) 
                                   Calendar
                                     Year
                                      3%
                                 Discount Rate
                                      7%
                                 Discount Rate
                                     2018
                                                                           $132
                                                                            $85
                                     2019
                                                                           $146
                                                                            $94
                                     2020
                                                                           $162
                                                                           $103
                                     2021
                                                                           $450
                                                                           $284
                                     2022
                                                                           $438
                                                                           $266
                                     2023
                                                                           $427
                                                                           $250
                                     2024
                                                                           $424
                                                                           $239
                                     2025
                                                                           $422
                                                                           $229
                                     2026
                                                                           $420
                                                                           $219
                                     2027
                                                                           $415
                                                                           $209
                                     2028
                                                                           $409
                                                                           $198
                                     2029
                                                                           $402
                                                                           $187
                                      Sum
                                                                         $4,247
                                                                         $2,362

Benefits Associated with Reduced Refueling Time
By reducing the frequency with which drivers typically refuel their vehicles and by extending the upper limit of the range that can be traveled before requiring refueling (i.e., future fuel tank sizes remain constant), savings would be realized associated with less time spent refueling vehicles.  Alternatively, refill intervals may remain the same (i.e., future fuel tank sizes get smaller), resulting in the same number of refills as today but less time spent per refill because there would be less fuel to refill.  The agencies have estimated this impact using the former approach -- by assuming that future tank sizes remain constant.
The savings in refueling time are calculated as the total amount of time the driver of a typical truck in each class would save each year as a consequence of pumping less fuel into the vehicle's tank.  The calculation does not include any reduction in time spent searching for a fueling station or other time spent at the station; it is assumed that time savings occur only when truck operators are actually refueling their vehicles.    
The calculation uses the reduced number of gallons consumed by truck type and divides that value by the tank volume and refill amount to get the number of refills, then multiplies that by the time per refill to determine the number of hours saved in a given year.  The calculation then applies DOT-recommended values of travel time savings to convert the resulting time savings to their economic value, including a 1.2 percent growth rate in those time savings going forward.  The input metrics used in the analysis are presented in greater detail in draft RIA Chapter 9.7.  The annual benefits associated with reduced refueling time are shown in Table IX-27 along with net present values at both 3 percent and 7 percent discount rates.  The discounted model year lifetime benefits are shown in Table IX-28
Table IX-27 Annual Refueling Benefits and Net Present Values at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline (Millions of 2012$)
                                   Calendar
                                     Year
                                   Refueling
                                   Benefits
                                     2018
                                                                             $3
                                     2019
                                                                             $6
                                     2020
                                                                             $9
                                     2021
                                                                            $25
                                     2022
                                                                            $47
                                     2023
                                                                            $72
                                     2024
                                                                           $113
                                     2025
                                                                           $157
                                     2026
                                                                           $205
                                     2027
                                                                           $266
                                     2028
                                                                           $327
                                     2029
                                                                           $386
                                     2030
                                                                           $444
                                     2035
                                                                           $698
                                     2040
                                                                           $890
                                     2050
                                                                         $1,195
                                    NPV, 3%
                                                                         $9,410
                                    NPV, 7%
                                                                         $3,868

Table IX-28 Discounted Model Year Lifetime Refueling Benefits using Method B and relative to the Less Dynamic Baseline (Millions of 2012$)
                                     Model
                                     Year
                                      3%
                                 Discount Rate
                                      7%
                                 Discount Rate
                                     2018
                                                                            $23
                                                                            $16
                                     2019
                                                                            $22
                                                                            $15
                                     2020
                                                                            $21
                                                                            $14
                                     2021
                                                                           $163
                                                                           $101
                                     2022
                                                                           $184
                                                                           $110
                                     2023
                                                                           $203
                                                                           $117
                                     2024
                                                                           $325
                                                                           $181
                                     2025
                                                                           $349
                                                                           $187
                                     2026
                                                                           $372
                                                                           $191
                                     2027
                                                                           $466
                                                                           $231
                                     2028
                                                                           $465
                                                                           $222
                                     2029
                                                                           $463
                                                                           $213
                                      Sum
                                                                         $3,055
                                                                         $1,597

Benefits of Increased Travel Associated with Rebound Driving
 The increase in travel associated with the rebound effect produces additional benefits to vehicle owners and operators, which reflect the value of the added (or more desirable) social and economic opportunities that become accessible with additional travel.  The analysis estimates the economic benefits from increased rebound-effect driving as the sum of fuel expenditures incurred plus the consumer surplus from the additional accessibility it provides.  As evidenced by the fact that vehicles make more frequent or longer trips when the cost of driving declines, the benefits from this added travel exceed added expenditures for the fuel consumed.  The amount by which the benefits from this increased driving exceed its increased fuel costs measures the net benefits from the additional travel, usually referred to as increased consumer surplus.  
The agencies' analysis estimates the economic value of the increased consumer surplus provided by added driving using the conventional approximation, which is one half of the product of the decline in vehicle operating costs per vehicle-mile and the resulting increase in the annual number of miles driven.  Because it depends on the extent of improvement in fuel economy, the value of benefits from increased vehicle use changes by model year and varies among alternative standards.  Under even those alternatives that would impose the highest standards, however, the magnitude of the consumer surplus from additional vehicle use represents a small fraction of this benefit.
The annual benefits associated with increased travel are shown in Table IX-29 along with net present values at both 3 percent and 7 percent discount rates.  The discounted model year lifetime benefits are shown in Table IX-30.
Table IX-29 Annual Value of Increased Travel and Net Present Values at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline(Millions of 2012$)
                                   Calendar
                                     Year
                         Benefits of Increased Travel
                                     2018
                                                                             $0
                                     2019
                                                                             $0
                                     2020
                                                                             $0
                                     2021
                                                                           $445
                                     2022
                                                                           $636
                                     2023
                                                                           $821
                                     2024
                                                                         $1,001
                                     2025
                                                                         $1,179
                                     2026
                                                                         $1,346
                                     2027
                                                                         $1,506
                                     2028
                                                                         $1,647
                                     2029
                                                                         $1,783
                                     2030
                                                                         $1,909
                                     2035
                                                                         $2,445
                                     2040
                                                                         $2,873
                                     2050
                                                                         $3,286
                                    NPV, 3%
                                                                        $34,240
                                    NPV, 7%
                                                                        $15,316

Table IX-30 Discounted Model Year Lifetime Value of Increased Travel at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline (Millions of 2012$) 
                                   Calendar
                                     Year
                                      3%
                                 Discount Rate
                                      7%
                                 Discount Rate
                                     2018
                                                                           $554
                                                                           $353
                                     2019
                                                                           $618
                                                                           $390
                                     2020
                                                                           $686
                                                                           $429
                                     2021
                                                                         $1,510
                                                                           $942
                                     2022
                                                                         $1,488
                                                                           $894
                                     2023
                                                                         $1,463
                                                                           $847
                                     2024
                                                                         $1,434
                                                                           $799
                                     2025
                                                                         $1,442
                                                                           $774
                                     2026
                                                                         $1,447
                                                                           $748
                                     2027
                                                                         $1,421
                                                                           $708
                                     2028
                                                                         $1,415
                                                                           $678
                                     2029
                                                                         $1,406
                                                                           $649
                                      Sum
                                                                        $14,884
                                                                         $8,211

Summary of Benefits and Costs
[Updated text will be forthcoming.]
This section summarizes the costs and benefits presented above, and detailed in the draft RIA. Table IX-31 shows the annual impacts and net impacts of the preferred alternative along with net present values at both 3 percent and 7 percent discount rates.  Table IX-32 and Table IX-33 show the discounted model year lifetime costs and benefits at 3 percent and 7 percent discount rates, respectively.
Table IX-31 Annual Benefits & Costs of the Preferred Alternative and Net Present Values at 3% and 7% Discount Rates using Method B and Relative to the Less Dynamic Baseline (Billions of 2012$)[a]

                                     2018
                                     2021
                                     2024
                                     2030
                                     2035
                                     2040
                                     2050
                                    NPV, 3%
                                    NPV, 7%
Vehicle program
                                                                          -$0.1
                                                                          -$2.4
                                                                          -$3.7
                                                                          -$5.4
                                                                          -$5.9
                                                                          -$6.3
                                                                          -$7.0
                                                                         -$86.8
                                                                         -$41.1
Maintenance 
                                                                           $0.0
                                                                           $0.0
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$1.8
                                                                          -$0.9
Pre-tax fuel 
                                                                           $0.2
                                                                           $1.7
                                                                           $6.9
                                                                          $24.0
                                                                          $37.2
                                                                          $47.8
                                                                          $57.5
                                                                         $495.6
                                                                         $206.7
Energy security 
                                                                           $0.0
                                                                           $0.1
                                                                           $0.3
                                                                           $1.3
                                                                           $2.2
                                                                           $2.9
                                                                           $3.5
                                                                          $28.9
                                                                          $11.9
Accidents/Congestion/Noise 
                                                                           $0.0
                                                                          -$0.1
                                                                          -$0.3
                                                                          -$0.5
                                                                          -$0.7
                                                                          -$0.8
                                                                          -$0.9
                                                                          -$9.3
                                                                          -$4.2
Refueling impacts
                                                                           $0.0
                                                                           $0.0
                                                                           $0.1
                                                                           $0.4
                                                                           $0.7
                                                                           $0.9
                                                                           $1.2
                                                                           $9.4
                                                                           $3.9
Travel value
                                                                           $0.0
                                                                           $0.4
                                                                           $1.0
                                                                           $1.9
                                                                           $2.4
                                                                           $2.9
                                                                           $3.3
                                                                          $34.2
                                                                          $15.3
Non-GHG impacts
                                                                   $0.0 to $0.1
                                                                   $0.4 to $0.9
                                                                   $1.0 to $2.4
                                                                   $3.3 to $8.3
                                                                  $4.8 to $12.1
                                                                  $5.7 to $14.3
                                                                  $7.0 to $17.5
                                                                $69.7 to $157.0
                                                                 $26.6 to $60.4
SCCb,c
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
SCC_CO2; 5% Avg
                                                                           $0.0
                                                                           $0.1
                                                                           $0.4
                                                                           $1.5
                                                                           $2.5
                                                                           $3.3
                                                                           $5.0
                                                                          $22.1
                                                                          $22.1
SCC_CO2; 3% Avg
                                                                           $0.0
                                                                           $0.3
                                                                           $1.3
                                                                           $4.8
                                                                           $7.4
                                                                           $9.7
                                                                          $13.6
                                                                         $103.1
                                                                         $103.1
SCC_CO2; 2.5% Avg
                                                                           $0.1
                                                                           $0.5
                                                                           $1.9
                                                                           $6.9
                                                                          $10.6
                                                                          $13.7
                                                                          $18.5
                                                                         $164.1
                                                                         $164.1
SCC_CO2; 3% 95th
                                                                           $0.1
                                                                           $1.0
                                                                           $4.0
                                                                          $14.6
                                                                          $23.2
                                                                          $30.3
                                                                          $42.0
                                                                         $320.5
                                                                         $320.5
Net benefits d
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
SCC_CO2; 5% Avg
                                                                           $0.2
                                                                           $0.4
                                                                           $6.4
                                                                          $28.8
                                                                          $46.8
                                                                          $60.6
                                                                          $74.6
                                                                         $605.8
                                                                         $257.1
SCC_CO2; 3% Avg
                                                                           $0.2
                                                                           $0.7
                                                                           $7.3
                                                                          $32.1
                                                                          $51.7
                                                                          $66.9
                                                                          $83.2
                                                                         $686.8
                                                                         $338.1
SCC_CO2; 2.5% Avg
                                                                           $0.2
                                                                           $0.8
                                                                           $7.9
                                                                          $34.2
                                                                          $54.9
                                                                          $70.9
                                                                          $88.2
                                                                         $747.8
                                                                         $399.1
SCC_CO2; 3% 95th
                                                                           $0.3
                                                                           $1.3
                                                                          $10.0
                                                                          $41.9
                                                                          $67.5
                                                                          $87.6
                                                                         $111.7
                                                                         $904.1
                                                                         $555.5
Notes: 
a Negative values denote increased social expenditures (costs); positive values denote decreased social expenditures (benefits).
b Net present value of reduced CO2 emissions is calculated differently than other benefits.  The same discount rate used to discount the value of damages from future emissions (SC-CO2 at 5, 3, 2.5 percent) is used to calculate net present value of SC-CO2 for internal consistency.  Refer to the SCC TSD for more detail. 
c Section IX.G notes that SC-CO2 increases over time.  For the years 2012-2050, the SC-CO2 estimates range as follows:  for Average SC-CO2 at 5%:  $12-$28; for Average SC-CO2 at 3%:  $37-$77; for Average SC-CO2 at 2.5%:  $58-$105; and for 95th percentile SC-CO2 at 3%:  $105-$237. Section IX.G also presents these SC-CO2 estimates.
d Net impacts are the summation of results within columns of the table with the exception that the net impacts at each SC-CO2 value include only the SC-CO2 impacts at that value.
  



Table IX-32 Discounted Model Year Lifetime Benefits & Costs of the Preferred Alternative using Method B and Relative to the Less Dynamic Baseline (Billions of 2012$ discounted at 3%)[a]

                                     2018
                                     2019
                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                     2025
                                     2026
                                     2027
                                     2028
                                     2029
                                      Sum
Vehicle
program
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$2.0
                                                                          -$1.9
                                                                          -$1.9
                                                                          -$2.8
                                                                          -$2.7
                                                                          -$2.7
                                                                          -$3.7
                                                                          -$3.6
                                                                          -$3.5
                                                                         -$25.1
Maintenance
                                                                          -$0.1
                                                                           $0.0
                                                                           $0.0
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$1.1
Pre-tax fuel
                                                                           $1.9
                                                                           $1.9
                                                                           $1.8
                                                                          $11.1
                                                                          $11.5
                                                                          $11.9
                                                                          $18.9
                                                                          $19.6
                                                                          $20.2
                                                                          $24.1
                                                                          $24.1
                                                                          $24.1
                                                                         $171.1
Energy security
                                                                           $0.1
                                                                           $0.1
                                                                           $0.1
                                                                           $0.5
                                                                           $0.6
                                                                           $0.6
                                                                           $1.0
                                                                           $1.1
                                                                           $1.1
                                                                           $1.4
                                                                           $1.4
                                                                           $1.4
                                                                           $9.3
Accidents/
Congestion/
Noise
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.2
                                                                          -$0.4
                                                                          -$0.4
                                                                          -$0.4
                                                                          -$0.4
                                                                          -$0.4
                                                                          -$0.4
                                                                          -$0.4
                                                                          -$0.4
                                                                          -$0.4
                                                                          -$4.2
Refueling
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                                                           $0.2
                                                                           $0.2
                                                                           $0.2
                                                                           $0.3
                                                                           $0.3
                                                                           $0.4
                                                                           $0.5
                                                                           $0.5
                                                                           $0.5
                                                                           $3.1
Travel value
                                                                           $0.6
                                                                           $0.6
                                                                           $0.7
                                                                           $1.5
                                                                           $1.5
                                                                           $1.5
                                                                           $1.4
                                                                           $1.4
                                                                           $1.4
                                                                           $1.4
                                                                           $1.4
                                                                           $1.4
                                                                          $14.9
Non-GHG
                                                                   $0.0 to $0.1
                                                                   $0.0 to $0.0
                                                                   $0.0 to $0.0
                                                                   $0.9 to $2.0
                                                                   $0.9 to $2.0
                                                                   $0.8 to $1.9
                                                                   $1.1 to $2.4
                                                                   $1.1 to $2.5
                                                                   $0.7 to $1.5
                                                                   $0.7 to $1.7
                                                                   $0.8 to $1.8
                                                                   $0.8 to $1.8
                                                                  $7.8 to $17.7
SCC b,c
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
SCC_CO2;
5% Avg
                                                                           $0.1
                                                                           $0.1
                                                                           $0.1
                                                                           $0.4
                                                                           $0.4
                                                                           $0.4
                                                                           $0.7
                                                                           $0.7
                                                                           $0.7
                                                                           $0.8
                                                                           $0.8
                                                                           $0.8
                                                                           $6.0
SCC_CO2;
3% Avg
                                                                           $0.3
                                                                           $0.3
                                                                           $0.3
                                                                           $1.6
                                                                           $1.7
                                                                           $1.8
                                                                           $2.8
                                                                           $3.0
                                                                           $3.1
                                                                           $3.7
                                                                           $3.7
                                                                           $3.7
                                                                          $25.9
SCC_CO2;
2.5% Avg
                                                                           $0.4
                                                                           $0.4
                                                                           $0.4
                                                                           $2.6
                                                                           $2.7
                                                                           $2.8
                                                                           $4.4
                                                                           $4.6
                                                                           $4.8
                                                                           $5.8
                                                                           $5.8
                                                                           $5.9
                                                                          $40.7
SCC_CO2;
3% 95th
                                                                           $0.9
                                                                           $0.8
                                                                           $0.8
                                                                           $5.1
                                                                           $5.3
                                                                           $5.5
                                                                           $8.7
                                                                           $9.1
                                                                           $9.5
                                                                          $11.4
                                                                          $11.5
                                                                          $11.5
                                                                          $80.0
Net benefits d
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
SCC_CO2;
5% Avg
                                                                           $2.4
                                                                           $2.4
                                                                           $2.4
                                                                          $12.7
                                                                          $13.2
                                                                          $13.5
                                                                          $20.7
                                                                          $21.7
                                                                          $21.7
                                                                          $25.2
                                                                          $25.4
                                                                          $25.5
                                                                         $186.7
SCC_CO2;
3% Avg
                                                                           $2.6
                                                                           $2.6
                                                                           $2.6
                                                                          $13.9
                                                                          $14.5
                                                                          $14.9
                                                                          $22.9
                                                                          $23.9
                                                                          $24.1
                                                                          $28.1
                                                                          $28.2
                                                                          $28.3
                                                                         $206.7
SCC_CO2; 
2.5% Avg
                                                                           $2.8
                                                                           $2.8
                                                                           $2.8
                                                                          $14.8
                                                                          $15.4
                                                                          $15.9
                                                                          $24.5
                                                                          $25.6
                                                                          $25.8
                                                                          $30.2
                                                                          $30.4
                                                                          $30.5
                                                                         $221.4
SCC_CO2;
3% 95th
                                                                           $3.2
                                                                           $3.2
                                                                           $3.2
                                                                          $17.3
                                                                          $18.0
                                                                          $18.6
                                                                          $28.8
                                                                          $30.1
                                                                          $30.5
                                                                          $35.8
                                                                          $36.0
                                                                          $36.2
                                                                         $260.8
Notes: 
a Positive values denote increased social expenditures (costs); negative values denote decreased social expenditures (benefits).
b Net present value of reduced CO2 emissions is calculated differently than other benefits.  The same discount rate used to discount the value of damages from future emissions (SC-CO2 at 5, 3, 2.5 percent) is used to calculate net present value of SC-CO2 for internal consistency.  Refer to the SCC TSD for more detail. 
c Section IX.G notes that SCC increases over time.  For the years 2012-2050, the SCC estimates range as follows:  for Average SC-CO2 at 5%:  $12-$28; for Average SC-CO2 at 3%:  $37-$77; for Average SC-CO2 at 2.5%:  $58-$105; and for 95th percentile SC-CO2 at 3%:  $105-$237. Section IX.G also presents these SCC estimates.
d Net impacts are the summation of results within columns of the table with the exception that the net impacts at each SC-CO2 value include only the SC-CO2 impacts at that value.


Table IX-33 Discounted Model Year Lifetime Benefits & Costs of the Preferred Alternative using Method B and Relative to the Less Dynamic Baseline (Billions of 2012$ discounted at 7%)[a]

                                     2018
                                     2019
                                     2020
                                     2021
                                     2022
                                     2023
                                     2024
                                     2025
                                     2026
                                     2027
                                     2028
                                     2029
                                      Sum
Vehicle
program
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$1.6
                                                                          -$1.4
                                                                          -$1.4
                                                                          -$1.9
                                                                          -$1.8
                                                                          -$1.7
                                                                          -$2.3
                                                                          -$2.1
                                                                          -$2.0
                                                                         -$16.6
Maintenance
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                           $0.0
                                                                          -$0.6
Pre-tax fuel
                                                                           $1.4
                                                                           $1.3
                                                                           $1.2
                                                                           $6.9
                                                                           $6.9
                                                                           $6.8
                                                                          $10.5
                                                                          $10.4
                                                                          $10.4
                                                                          $11.9
                                                                          $11.5
                                                                          $11.0
                                                                          $90.1
Energy security
                                                                           $0.1
                                                                           $0.1
                                                                           $0.1
                                                                           $0.3
                                                                           $0.3
                                                                           $0.4
                                                                           $0.5
                                                                           $0.6
                                                                           $0.6
                                                                           $0.7
                                                                           $0.7
                                                                           $0.6
                                                                           $4.8
Accidents/
Congestion/
Noise
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.1
                                                                          -$0.3
                                                                          -$0.3
                                                                          -$0.2
                                                                          -$0.2
                                                                          -$0.2
                                                                          -$0.2
                                                                          -$0.2
                                                                          -$0.2
                                                                          -$0.2
                                                                          -$2.4
Refueling
                                                                           $0.0
                                                                           $0.0
                                                                           $0.0
                                                                           $0.1
                                                                           $0.1
                                                                           $0.1
                                                                           $0.2
                                                                           $0.2
                                                                           $0.2
                                                                           $0.2
                                                                           $0.2
                                                                           $0.2
                                                                           $1.6
Travel value
                                                                           $0.4
                                                                           $0.4
                                                                           $0.4
                                                                           $0.9
                                                                           $0.9
                                                                           $0.8
                                                                           $0.8
                                                                           $0.8
                                                                           $0.7
                                                                           $0.7
                                                                           $0.7
                                                                           $0.6
                                                                           $8.2
Non-GHG
                                                                   $0.0 to $0.0
                                                                   $0.0 to $0.0
                                                                   $0.0 to $0.0
                                                                   $0.5 to $1.2
                                                                   $0.5 to $1.1
                                                                   $0.4 to $1.0
                                                                   $0.5 to $1.2
                                                                   $0.5 to $1.2
                                                                   $0.3 to $0.6
                                                                   $0.3 to $0.7
                                                                   $0.3 to $0.7
                                                                   $0.3 to $0.7
                                                                   $3.6 to $8.3
SCC b,c
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
SCC_CO2;
5% Avg
                                                                           $0.1
                                                                           $0.1
                                                                           $0.1
                                                                           $0.4
                                                                           $0.4
                                                                           $0.4
                                                                           $0.7
                                                                           $0.7
                                                                           $0.7
                                                                           $0.8
                                                                           $0.8
                                                                           $0.8
                                                                           $6.0
SCC_CO2;
3% Avg
                                                                           $0.3
                                                                           $0.3
                                                                           $0.3
                                                                           $1.6
                                                                           $1.7
                                                                           $1.8
                                                                           $2.8
                                                                           $3.0
                                                                           $3.1
                                                                           $3.7
                                                                           $3.7
                                                                           $3.7
                                                                          $25.9
SCC_CO2;
2.5% Avg
                                                                           $0.4
                                                                           $0.4
                                                                           $0.4
                                                                           $2.6
                                                                           $2.7
                                                                           $2.8
                                                                           $4.4
                                                                           $4.6
                                                                           $4.8
                                                                           $5.8
                                                                           $5.8
                                                                           $5.9
                                                                          $40.7
SCC_CO2;
3% 95th
                                                                           $0.9
                                                                           $0.8
                                                                           $0.8
                                                                           $5.1
                                                                           $5.3
                                                                           $5.5
                                                                           $8.7
                                                                           $9.1
                                                                           $9.5
                                                                          $11.4
                                                                          $11.5
                                                                          $11.5
                                                                          $80.0
Net benefits d
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
SCC_CO2;
5% Avg
                                                                           $1.7
                                                                           $1.6
                                                                           $1.5
                                                                           $7.6
                                                                           $7.6
                                                                           $7.6
                                                                          $11.3
                                                                          $11.4
                                                                          $11.0
                                                                          $12.3
                                                                          $12.0
                                                                          $11.6
                                                                          $97.1
SCC_CO2;
3% Avg
                                                                           $1.9
                                                                           $1.8
                                                                           $1.8
                                                                           $8.8
                                                                           $8.9
                                                                           $8.9
                                                                          $13.4
                                                                          $13.7
                                                                          $13.4
                                                                          $15.2
                                                                          $14.8
                                                                          $14.5
                                                                         $117.1
SCC_CO2; 
2.5% Avg
                                                                           $2.0
                                                                           $2.0
                                                                           $1.9
                                                                           $9.7
                                                                           $9.9
                                                                           $9.9
                                                                          $15.0
                                                                          $15.3
                                                                          $15.1
                                                                          $17.3
                                                                          $17.0
                                                                          $16.7
                                                                         $131.9
SCC_CO2;
3% 95th
                                                                           $2.5
                                                                           $2.4
                                                                           $2.3
                                                                          $12.2
                                                                          $12.5
                                                                          $12.6
                                                                          $19.3
                                                                          $19.8
                                                                          $19.8
                                                                          $22.9
                                                                          $22.6
                                                                          $22.3
                                                                         $171.2
Notes: 
a Positive values denote increased social expenditures (costs); negative values denote decreased social expenditures (benefits).
b Net present value of reduced CO2 emissions is calculated differently than other benefits.  The same discount rate used to discount the value of damages from future emissions (SC-CO2 at 5, 3, 2.5 percent) is used to calculate net present value of SCC for internal consistency.  Refer to the SCC TSD for more detail. 
c Section IX.G notes that SC-CO2 increases over time.  For the years 2012-2050, the SC-CO2 estimates range as follows:  for Average SC-CO2 at 5%:  $12-$28; for Average SC-CO2 at 3%:  $37-$77; for Average SC-CO2 at 2.5%:  $58-$105; and for 95th percentile SC-CO2 at 3%:  $105-$237. Section IX.G also presents these SC-CO2 estimates.
d Net impacts are the summation of results within columns of the table with the exception that the net impacts at each SC-CO2 value include only the SC-CO2 impacts at that value.



Table IX-34 shows benefits and costs for the proposed standards from the perspective of a program designed to improve the Nation's energy security and conserve energy by improving fuel efficiency.  From this viewpoint, technology costs occur when the vehicle is purchased, just as they do from a GHG-reduction perspective.  However, fuel savings are counted as benefits that occur over the lifetimes of the vehicles produced during the model years subject to the Phase 2 standards as they consume less fuel, rather than as negative costs experienced either at the time of purchase or over the lifetimes of these vehicles.
Table IX-34 Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for Model Years 2018 - 2029 Vehicles Using Analysis Method A (Billions of 2012$) [a]
                                   Category
                                  Baseline 1a
                                  Baseline 1b

                                      3%
                                      7%
                                      3%
                                      7%
Vehicle Program: Technology and Indirect Costs, Normal Profit on Additional Investments
                                     25.4
                                     17.1
                                     25.0
                                     16.8
Additional Routine Maintenance
                                      1.1
                                      0.6
                                      1.0
                                      0.6
Congestion, Accidents, and Noise from Increased Vehicle Use 
                                      4.7
                                      2.8
                                      4.5
                                      2.6
Total Costs
                                     31.1
                                     20.5
                                     30.5
                                     20.0
Fuel Savings (valued at pre-tax prices)
                                     175.1
                                     94.2
                                     165.1
                                     89.2
Savings from Less Frequent Refueling
                                      3.1
                                      1.6
                                      2.9
                                      1.5
Economic Benefits from Additional Vehicle Use
                                     15.1
                                      8.4
                                     14.7
                                      8.2
Reduced Climate Damages from GHG Emissions [a]
                                     27.4
                                     27.4
                                     25.7
                                     25.7
Reduced Health Damages from Non-GHG Emissions
                                     12.7
                                      6.6
                                     12.4
                                      6.6
Increased U.S. Energy Security
                                      8.9
                                      4.7
                                      8.1
                                      4.3
Total Benefits
                                     242.2
                                     143.0
                                     229.0
                                     135.6
Net Benefits
                                     211.1
                                     122.5
                                     198.5
                                     115.6
    a   Benefits and net benefits use the 3 percent average SCC value applied only to CO2 emissions; GHG reductions include CO2, CH4, N2O and HFC reductions. Some fraction of these benefits is experienced outside the U.S.



Employment Impacts
Executive Order 13563 (January 18, 2011) directs federal agencies to consider regulatory impacts on, among other criteria, job creation.  According to the Executive Order "Our regulatory system must protect public health, welfare, safety, and our environment while promoting economic growth, innovation, competitiveness, and job creation.  It must be based on the best available science."  Analysis of employment impacts of a regulation is not part of a standard benefit-cost analysis (except to the extent that labor costs contribute to costs). Employment impacts of federal rules are of general interest, however, and have been particularly so, historically, in the auto sector during periods of challenging labor market conditions.  For this reason, we are describing the connections of these proposed standards to employment in the regulated sector, the motor vehicle manufacturing sector, as well as the motor vehicle body and trailer and motor vehicle parts manufacturing sectors.
The overall effect of the proposed rule on motor vehicle sector employment depends on the relative magnitude of output and substitution effects, described below.  Because we do not have quantitative estimates of the output effect, and only a partial estimate of the substitution effect, we cannot reach a quantitative estimate of the overall employment effects of the proposed rule on motor vehicle sector employment or even whether the total effect will be positive or negative.  
According to the U.S. Bureau of Labor Statistics, in 2014, about 850,000 people in the U.S. were employed in the Motor Vehicle and Parts Manufacturing Sector (NAICS 3361, 3362, and 3363), the directly regulated sector.  The employment effects of this proposed rule are expected to expand beyond the regulated sector.  Though some of the parts used to achieve the proposed standards are likely to be built by motor vehicle manufacturers (including trailer manufacturers) themselves, the motor vehicle parts manufacturing sector also plays a significant role in providing those parts, and will also be affected by changes in vehicle sales.  Changes in truck sales, discussed in Section IX. F. (2) , could also affect employment for truck and trailer vendors.  As discussed in Section IX. C. , this proposed rule is expected to reduce the amount of fuel these vehicles use, and thus affect the petroleum refinery and supply industries as well.  Finally, since the net reduction in cost associated with these proposed rules is expected to lead to lower transportation and shipping costs, in a competitive market a substantial portion of those cost savings will be passed along to consumers, who then will have additional discretionary income (how much of the cost is passed along to consumers depends on market structure and the relative price elasticities).  The proposed rule is not expected to have any notable inflationary or recessionary effect. 
The employment effects of environmental regulation are difficult to disentangle from other economic changes and business decisions that affect employment, over time and across regions and industries.  In light of these difficulties, we lean on economic theory to provide a constructive framework for approaching these assessments and for better understanding the inherent complexities in such assessments.  Neoclassical microeconomic theory describes how profit-maximizing firms adjust their use of productive inputs in response to changes in their economic conditions. Berman and Bui (2001, pp. 274-75) model two components that drive changes in firm-level labor demand: output effects and substitution effects.  Regulation can affect the profit-maximizing quantity of output by changing the marginal cost of production.  If regulation causes marginal cost to increase, it will place upward pressure on output prices, leading to a decrease in the quantity demanded, and resulting in a decrease in production.  The output effect describes how, holding labor intensity constant, a decrease in production causes a decrease in labor demand.  As noted by Berman and Bui, although many assume that regulation increases marginal cost, it need not be the case.  A regulation could induce a firm to upgrade to less polluting and more efficient equipment that lowers marginal production costs, or it may induce use of technologies that may prove popular with buyers or provide positive network externalities (see Section IX. A. for discussion of this effect). In such a case, output could increase.
The substitution effect describes how, holding output constant, regulation affects labor intensity of production.  Although increased environmental regulation may increase use of pollution control equipment and energy to operate that equipment, the impact on labor demand is ambiguous.  For example, equipment inspection requirements, specialized waste handling, or pollution technologies that alter the production process may affect the number of workers necessary to produce a unit of output. Berman and Bui (2001) model the substitution effect as the effect of regulation on pollution control equipment and expenditures required by the regulation and the corresponding change in labor intensity of production. 
In summary, as output and substitution effects may be positive or negative, theory alone cannot predict the direction of the net effect of regulation on labor demand at the level of the regulated firm.  Operating within the bounds of standard economic theory, empirical estimation of net employment effects on regulated firms is possible when data and methods of sufficient detail and quality are available.  The literature, however, illustrates difficulties with empirical estimation. For example, studies sometimes rely on confidential plant-level employment data from the U.S. Census Bureau, possibly combined with pollution abatement expenditure data that are too dated to be reliably informative.  In addition, the most commonly used empirical methods do not permit estimation of net effects.
The conceptual framework described thus far focused on regulatory effects on plant-level decisions within a regulated industry. Employment impacts at an individual plant do not necessarily represent impacts for the sector as a whole.  The approach must be modified when applied at the industry level. 

At the industry level, labor demand is more responsive if: (1) the price elasticity of demand for the product is high, (2) other factors of production can be easily substituted for labor, (3) the supply of other factors is highly elastic, or (4) labor costs are a large share of total production costs. For example, if all firms in an industry are faced with the same regulatory compliance costs and product demand is inelastic, then industry output may not change much, and output of individual firms may change slightly. In this case, the output effect may be small, while the substitution effect depends on input substitutability. Suppose, for example, that new equipment for fuel efficiency improvements requires labor to install and operate. In this case, the substitution effect may be positive, and with a small output effect, the total effect may be positive. As with potential effects for an individual firm, theory cannot determine the sign or magnitude of industry-level regulatory effects on labor demand. Determining these signs and magnitudes requires additional sector-specific empirical study. For environmental rules, much of the data needed for these empirical studies is not publicly available, would require significant time and resources in order to access confidential U.S. Census data for research, and also would not be necessary for other components of a typical RIA. 

      In addition to changes to labor demand in the regulated industry, net employment impacts encompass changes in other related sectors. For example, the proposed standards are expected to increase demand for fuel-saving technologies. This increased demand may increase revenue and employment in the firms providing these technologies. At the same time, the regulated industry is purchasing the equipment, and these costs may impact labor demand at regulated firms. Therefore, it is important to consider the net effect of compliance actions on employment across multiple sectors or industries. 
If the U.S. economy is at full employment, even a large-scale environmental regulation is unlikely to have a noticeable impact on aggregate net employment. Instead, labor would primarily be reallocated from one productive use to another, and net national employment effects from environmental regulation would be small and transitory (e.g., as workers move from one job to another).
Affected sectors may experience transitory effects as workers change jobs. Some workers may retrain or relocate in anticipation of new requirements or require time to search for new jobs, while shortages in some sectors or regions could bid up wages to attract workers.  These adjustment costs can lead to local labor disruptions.  Although the net change in the national workforce is expected to be small, localized reductions in employment may adversely impact individuals and communities just as localized increases may have positive impacts. 

If the economy is operating at less than full employment, economic theory does not clearly indicate the direction or magnitude of the net impact of environmental regulation on employment; it could cause either a short-run net increase or short-run net decrease. An important research question is how to accommodate unemployment as a structural feature in economic models.  This feature may be important in assessing large-scale regulatory impacts on employment. 

      Environmental regulation may also affect labor supply.  In particular, pollution and other environmental risks may impact labor productivity or employees' ability to work. While the theoretical framework for analyzing labor supply effects is analogous to that for labor demand, it is more difficult to study empirically.  There is a small emerging literature described in the next section that uses detailed labor and environmental data to assess these impacts. 
To summarize, economic theory provides a framework for analyzing the impacts of environmental regulation on employment.  The net employment effect incorporates expected employment changes (both positive and negative) in the regulated sector and elsewhere.  Labor demand impacts for regulated firms, and also for the regulated industry, can be decomposed into output and substitution effects which may be either negative or positive. Estimation of net employment effects for regulated sectors is possible when data of sufficient detail and quality are available.  Finally, economic theory suggests that labor supply effects are also possible. In the next section, we discuss the empirical literature.
Current State of Knowledge Based on the Peer-Reviewed Literature
In the labor economics literature there is an extensive body of peer-reviewed empirical work analyzing various aspects of labor demand, relying on the above theoretical framework. This work focuses primarily on the effects of employment policies, e.g. labor taxes, minimum wage, etc.  In contrast, the peer-reviewed empirical literature specifically estimating employment effects of environmental regulations is very limited. Several empirical studies suggest that net employment impacts may be zero or slightly positive but small even in the regulated sector. Other research suggests that more highly regulated counties may generate fewer jobs than less regulated ones. However, since these latter studies compare more regulated to less regulated counties, they overstate the net national impact of regulation to the extent that regulation causes plants to locate in one area of the country rather than another.  List et al. (2003) find some evidence that this type of geographic relocation may be occurring.  Overall, the peer-reviewed literature does not contain evidence that environmental regulation has a large impact on net employment (either negative or positive) in the long run across the whole economy.
Analytic challenges make it very difficult to accurately produce net employment estimates for the whole economy that would appropriately capture the way in which costs, compliance spending, and environmental benefits propagate through the macro-economy.  Quantitative estimates are further complicated by the fact that macroeconomic models often have very little sectoral detail and usually assume that the economy is at full employment.  EPA is currently in the process of seeking input from an independent expert panel on modeling economy-wide impacts, including employment effects.  For more information, see: https://federalregister.gov/a/2014-02471.
Employment Impacts in the Motor Vehicle and Parts Manufacturing Sector
This section describes changes in employment in the motor vehicle, trailer, and parts (hence, motor vehicle) manufacturing sectors due to this proposed rule.  We focus on the motor vehicle manufacturing sector because it is directly regulated, and because it is likely to bear a substantial share of changes in employment due to this proposed rule.  We include discussion of effects on the parts manufacturing sector, because the motor vehicle manufacturing sector can either produce parts internally or buy them from an external supplier, and we do not have estimates of the likely breakdown of effort between the two sectors.
We follow the theoretical structure of Berman and Bui  of the impacts of regulation in employment in the regulated sectors.  In Berman and Bui's (2001, p. 274-75) theoretical model, as described above, the change in a firm's labor demand arising from a change in regulation is decomposed into two main components:  output and substitution effects.  As the output and substitution effects may be both positive, both negative, or some combination, standard neoclassical theory alone does not point to a definitive net effect of regulation on labor demand at regulated firms. 
Following the Berman and Bui framework for the impacts of regulation on employment in the regulated sector, we consider two effects for the motor vehicle sector:  the output effect and the substitution effect.  
         The Output Effect
If truck or trailer sales increase, then more people will be required to assemble trucks, trailers, and their components.  If truck or trailer sales decrease, employment associated with these activities will decrease.  The effects of this proposed rulemaking on HD vehicle sales thus depend on the perceived desirability of the new vehicles.  On one hand, this proposed rulemaking will increase truck and trailer costs; by itself, this effect would reduce truck and trailer sales.  In addition, while decreases in truck performance would also decrease sales, this program is not expected to have any negative effect on truck performance.  On the other hand, this proposed rulemaking will reduce the fuel costs of operating the trucks; by itself, this effect would increase truck sales, especially if potential buyers have an expectation of higher fuel prices.  The agencies have not made an estimate of the potential change in truck or trailer sales.  However, as discussed in IX. E. , the agencies have estimated an increase in vehicle miles traveled (i.e., VMT rebound) due to the reduced operating costs of trucks meeting these proposed standards.  Since increased VMT is most likely to be met with more drivers and more trucks, our projection of VMT rebound is suggestive of an increase in vehicle sales and truck driver employment (recognizing that these increases may be partially offset by a decrease in manufacturing and sales for equipment of other modes of transportation such as rail cars or barges).   
         The Substitution Effect
The output effect, above, measures the effect due to new truck and trailer sales only.  The substitution effect includes the impacts due to the changes in technologies needed for vehicles to meet the proposed standards, separate from the effect on output (that is, as though holding output constant).  This effect includes both changes in employment due to incorporation of abatement technologies and overall changes in the labor intensity of manufacturing.  We present estimates for this effect to provide a sense of the order of magnitude of expected impacts on employment, which we expect to be small in the automotive sector, and to repeat that regulations may have positive as well as negative effects on employment.
One way to estimate this effect, given the cost estimates for complying with the proposed rule, is to use the ratio of workers to each $1 million of expenditures in that sector.  The use of these ratios has both advantages and limitations.  It is often possible to estimate these ratios for quite specific sectors of the economy:  for instance, it is possible to estimate the average number of workers in the motor vehicle body and trailer manufacturing sector per $1 million spent in the sector, rather than use the ratio from another, more aggregated sector, such as motor vehicle manufacturing.  As a result, it is not necessary to extrapolate employment ratios from possibly unrelated sectors.  On the other hand, these estimates are averages for the sectors, covering all the activities in those sectors; they may not be representative of the labor required when expenditures are required on specific activities, or when manufacturing processes change sufficiently that labor intensity changes.  For instance, the ratio for the motor vehicle manufacturing sector represents the ratio for all vehicle manufacturing, not just for emissions reductions associated with compliance activities.  In addition, these estimates do not include changes in sectors that supply these sectors, such as steel or electronics producers.  They thus may best be viewed as the effects on employment in the motor vehicle sector due to the changes in expenditures in that sector, rather than as an assessment of all employment changes due to these changes in expenditures.  In addition, this approach estimates the effects of increased expenditures while holding constant the labor intensity of manufacturing; it does not take into account changes in labor intensity due to changes in the nature of production.  This latter effect could either increase or decrease the employment impacts estimated here.
Some of the costs of this proposed rule will be spent directly in the motor vehicle manufacturing sector, but it is also likely that some of the costs will be spent in the motor vehicle body and trailer and motor vehicle parts manufacturing sectors.  The analysis here draws on estimates of workers per $1 million of expenditures for each of these sectors.
There are several public sources for estimates of employment per $1 million expenditures.  The U.S. Bureau of Labor Statistics (BLS) provides its Employment Requirements Matrix (ERM), which provides direct estimates of the employment per $1 million in sales of goods in 202 sectors.  The values considered here are for Motor Vehicle Manufacturing (NAICS 3361), Motor Vehicle Body and Trailer Manufacturing (NAICS 3362), and Motor Vehicle Parts Manufacturing (NAICS 3363) for 2012.  
The Census Bureau provides the Annual Survey of Manufacturers (ASM), a subset of the Economic Census, based on a sample of establishments; though the Census itself is more complete, it is conducted only every 5 years, while the ASM is annual.  Both include more sectoral detail than the BLS ERM:  for instance, while the ERM includes the Motor Vehicle Manufacturing sector, the ASM and Economic Census have detail at the 6-digit NAICS code level (e.g., light truck and utility vehicle manufacturing).  While the ERM provides direct estimates of employees/$1 million in expenditures, the ASM and Economic Census separately provide number of employees and value of shipments; the direct employment estimates here are the ratio of those values.  At this time, the Economic Census values for 2012 (the most recent year) are not fully available; we therefore do not report them, and instead provide the 2011 ASM results (the most recent available).  The values reported are for Motor Vehicle Manufacturing (NAICS 3361), Light Truck and Utility Vehicle Manufacturing (NAICS 336112), Heavy Duty Truck Manufacturing (33612), Motor Vehicle Body and Trailer manufacturing (3362), and Motor Vehicle Parts Manufacturing (NAICS 3363).
Draft RIA Chapter 9.9 provides the details on the values of workers per $1 million in expenditures for the sectors mentioned above.  In 2012$, these range from 0.4 workers per $1 million for light truck & utility vehicle manufacturing in the ASM, to 2.8 workers per $1 million in expenditures for Motor Vehicle Body and Trailer Manufacturing in the ASM.  These values are then adjusted to remove the employment effects of imports through use of a ratio of domestic production to domestic sales of 0.78.  
Over time, the amount of labor needed in the motor vehicle industry has changed:  automation and improved methods have led to significant productivity increases.  The BLS ERM, for instance, provided estimates that, in 1993, 1.33 workers in the Motor Vehicle Manufacturing sector were needed per $1 million, but only 0.46 workers by 2012 (in 2012$).  Because the ERM is available annually for 1993-2012, we used these data to estimate productivity improvements over time.  We then used these productivity estimates to project the ERM through 2027, and to adjust the ASM values for 2011.  RIA Chapter 9.9.2.2 provides detail on these calculations.
Finally, to simplify the presentation and give a range of estimates, we compared the projected employment among the 3 sectors for the ERM and ASM, and we provide only the maximum and minimum employment effects estimated for the ERM and the ASM.  We provide the range rather than a point estimate because of the inherent difficulties in estimating employment impacts; the range gives an estimate of the expected magnitude.  The ERM estimates in the Motor Vehicle Parts Manufacturing Sector are consistently the maximum values.  The ERM estimates in the Motor Vehicle Body and Trailer Manufacturing Sector are the minimum values for all years but 2018-2019, when the ASM values for Light Truck and Utility Vehicle Manufacturing provide the minimum values.
Section 0of the Preamble discusses the vehicle cost estimates developed for this proposed rule.  The final step in estimating employment impacts is to multiply costs (in $ millions) by workers per $1 million in costs, to estimate employment impacts in the regulated and parts manufacturing sectors.  Increased costs of vehicles and parts would, by itself, and holding labor intensity constant, be expected to increase employment between 2018 and 2027 from none to a few thousand jobs each year. 
While we estimate employment impacts, measured in job-years, beginning with program implementation, some of these employment gains may occur earlier as motor vehicle manufacturers and parts suppliers hire staff in anticipation of compliance with the standards.  A job-year is a way to calculate the amount of work needed to complete a specific task.  For example, a job-year is one year of work for one person.  
Table IX-35 Employment Effects due to Increased Costs of Vehicles and Parts, in Job-years
                                     YEAR
                           COSTS (MILLIONS OF 2012$)
MINIMUM Employment Due to Substitution Effect (ERM estimates, expenditures in the Parts Sector[a])
MAXIMUM Employment Due to Substitution Effect (ERM estimates, expenditures in the Body and Trailer Mfg Sector)
                                                                           2018
 $          116 
                                                                             0 
                                                                           100 
                                                                           2019
 $          113 
                                                                             0 
                                                                           100 
                                                                           2020
 $          112 
                                                                             0 
                                                                           100 
                                                                           2021
 $       2,173 
                                                                           300 
                                                                         2,300 
                                                                           2022
 $       2,161 
                                                                           300 
                                                                         2,200 
                                                                           2023
 $       2,224 
                                                                           200 
                                                                         2,100 
                                                                           2024
 $       3,455 
                                                                           300 
                                                                         3,200 
                                                                           2025
 $       3,647 
                                                                           200 
                                                                         3,200 
                                                                           2026
 $       3,736 
                                                                           200 
                                                                         3,100 
                                                                           2027
 $       5,309 
                                                                           200 
                                                                         4,200 
Notes:
a For 2018 and 2019, the minimum employment effects are associated with the ASM's Light Truck and Utility Vehicle Manufacturing sector.
         Summary of Employment Effects in the Motor Vehicle Sector
The overall effect of the proposed rule on motor vehicle sector employment depends on the relative magnitude of the output effect and the substitution effect.  Because we do not have quantitative estimates of the output effect, and only a partial estimate of the substitution effect, we cannot reach a quantitative estimate of the overall employment effects of the proposed rule on motor vehicle sector employment or even whether the total effect will be positive or negative.  
The proposed standards are not expected to provide incentives for manufacturers to shift employment between domestic and foreign production.  This is because the proposed standards will apply to vehicles sold in the U.S. regardless of where they are produced. If foreign manufacturers already have increased expertise in satisfying the requirements of the standards, there may be some initial incentive for foreign production, but the opportunity for domestic manufacturers to sell in other markets might increase.  To the extent that the requirements of this proposed rule might lead to installation and use of technologies that other countries may seek now or in the future, developing this capacity for domestic production now may provide some additional ability to serve those markets.  
   Employment Impacts in Other Affected Sectors
         Transport and Shipping Sectors
Although not directly regulated by these proposed rules, employment effects in the transport and shipping sector are likely to result from these regulations.  If the overall cost of shipping a ton of freight decreases because of increased fuel efficiency (taking into account the increase in upfront purchasing costs), in a perfectly competitive industry some of these costs savings, depending on the relative elasticities of supply and demand, will be passed along to customers.  With lower prices, demand for shipping would lead to an increase in demand for truck shipping services (consistent with the VMT rebound effect analysis) and therefore an increase in employment in the truck shipping sector.  In addition, if the relative cost of shipping freight via trucks becomes cheaper than shipping by other modes (e.g., rail or barge), then employment in the truck transport industry is likely to increase.  If the trucking industry is more labor intensive than other modes, we would expect this effect to lead to an overall increase in employment in the transport and shipping sectors.[,]  Such a shift would, however, be at the expense of employment in the sectors that are losing business to trucking.  The first effect  -  a gain due to lower shipping costs  -  is likely to lead to a net increase in employment.  The second effect, due to mode-shifting, may increase employment in trucking, but decrease employment in other shipping sectors (e.g., rail or barge), with the net effects dependent on the labor-intensity of the sectors and the volumes.
         Fuel Suppliers
In addition to the effects on the trucking industry and related truck parts sector, these proposed rules will result in reductions in fuel use that lower GHG emissions.  Fuel saving, principally reductions in liquid fuels such as diesel and gasoline, will affect employment in the fuel suppliers industry sectors, principally the Petroleum Refinery sector.  
Section IX. C. of this Preamble provides estimates of the effects of these proposed standards on expected fuel consumption.  While reduced fuel consumption represents savings for purchasers of fuel, it also represents a loss in value of output for the petroleum refinery industry, which will result in reduced sectoral employment.  Because this sector is material-intensive, the employment effect is not expected to be large.
         Fuel Savings
As a result of this proposed rulemaking, it is anticipated that trucking firms will experience fuel savings.  Fuel savings lower the costs of transportation goods and services.  In a competitive market, some of the fuel savings that initially accrue to trucking firms are likely to be passed along as lower transportation costs that, in turn, could result in lower prices for final goods and services.  Some of the savings might also be retained by firms for investments or for distributions to firm owners.  Again, how much accrues to customers versus firm owners will depend on the relative elasticities of supply and demand. Regardless, the savings will accrue to some segment of consumers: either owners of trucking firms or the general public, and the effect will be increased spending by consumers in other sectors of the economy, creating jobs in a diverse set of sectors, including retail and service industries.  
As described in Section IX. C. (2) the value of fuel savings from this proposed rulemaking is projected to be $15.1 billion (2012$) in 2027, according to Table IX-6.  If all those savings are spent, the fuel savings will stimulate increased employment in the economy through those expenditures.  If the fuel savings accrue primarily to firm owners, they may either reinvest the money or take it as profit.  Reinvesting the money in firm operations could increase employment directly.  If they take the money as profit, to the extent that these owners are wealthier than the general public, they may spend less of the savings, and the resulting employment impacts would be smaller than if the savings went to the public.  Thus, while fuel savings are expected to decrease employment in the refinery sector, they are expected to increase employment through increased consumer expenditures.
Summary of Employment Impacts
The primary employment effects of this rule are expected to be found throughout several key sectors: truck and engine manufacturers, the trucking industry, truck parts manufacturing, fuel production, and consumers.  This rule initially takes effect in model year 2018, a time period sufficiently far in the future that the unemployment rate at that time is unknowable.  In an economy with full employment, the primary employment effect of a rulemaking is likely to be to move employment from one sector to another, rather than to increase or decrease employment.  For that reason, we focus our partial quantitative analysis on employment in the regulated sector, to examine the impacts on that sector directly.  We discuss the likely direction of other impacts in the regulated sector as well as in other directly related sectors, but we do not quantify those impacts, because they are more difficult to quantify with reasonable accuracy, particularly so far into the future.
For the regulated sector, we have not quantified the output effect.  The substitution effect is expected to increase employment from none to a few thousand jobs per year between 2018 and 2027, depending on the share of employment impacts in the affected sectors (Motor Vehicle Manufacturing, Motor Vehicle Body and Trailer Manufacturing, and Motor Vehicle Parts Manufacturing).  These estimates do not include potential changes, either greater or less, in labor intensity of production.  As mentioned above, some of these job gains may occur earlier as auto manufacturers and parts suppliers hire staff to prepare to comply with the standard.  
Lower prices for shipping are expected to lead to an increase in demand for truck shipping services and, therefore, an increase in employment in that sector, though this effect may be offset somewhat by changes in employment in other shipping sectors.  Reduced fuel production implies less employment in the fuel provision sectors.  Finally, any net cost savings would be expected to be passed along to some segment of consumers: either the general public or the owners of trucking firms, who are expected then to increase employment through their expenditures.  Under conditions of full employment, any changes in employment levels in the regulated sector due to this program are mostly expected to be offset by changes in employment in other sectors.


Cost of Ownership and Payback Analysis
[Updated text will be forthcoming.]
Here we look at the proposed standards from the perspective of vehicle owners/operators. First, we present aggregate impacts including increased costs associated with vehicles meeting the proposed standards, but also the savings associated with reduced fuel consumption along with reduced refueling time and the benefits of increased travel (or increased vehicle use). We follow that presentation with a look at individual vehicle ownership costs and payback periods. The payback period is an important metric for vehicle buyers especially in the heavy-duty market and the analysis serves to give a sense of when the higher cost vehicles would provide payback via fuel savings.
Table IX-36 and Table IX-37 report the aggregate economic impacts of the Phase 2 preferred alternative standards on all the buyers, operators, and subsequent owners of new vehicles, under the assumption that vehicle manufacturers pass along their costs for improving fuel efficiency in the form of higher purchase prices paid by vehicle buyers.  Table IX-36 reports their gains and losses using Method A and measured relative to each alternative baseline (less and more dynamic) using only the 7% discount rate, since that rate is intended to represent the opportunity cost of any capital that HDV buyers and users must divert from other opportunities to purchase more costly vehicles.  Table IX-37 presents the gains and losses using Method B and relative to the less dynamic baseline using, again, only the 7 percent discount rate. As these tables show, fuel savings and the other benefits from increased fuel efficiency far outweigh the higher prices that buyers of new trucks pay, and as a consequence, in the aggregate, those buyers, truck operators, and their subsequent owners are projected to experience large economic gains from the Phase 2 standards. It should be noted that, because the original buyers may not hold the vehicles for their lifetimes, and because those who own or operate the vehicles may not pay for the fuel, these benefits and costs do not necessarily represent benefits and costs to identifiable individuals.
Table IX-36 MY2018-2029 Lifetime Aggregate Impacts of the Preferred Alternative on All HD Vehicle Buyers and Operators using Method A (billions of 2012$, discounted at 7%)
                                       
                                  Baseline 1a
                                  Baseline 1b
Vehicle costs
                                     17.1
                                     16.8
Maintenance & repair costs
                                      0.6
                                      0.6
   Total costs
                                     17.7
                                     17.4
Fuel savings a
(valued at retail prices)
                                     104.6
                                     99.1
Refueling benefits
                                      1.6
                                      1.5
Increased travel benefits
                                      8.4
                                      8.2
   Total benefits
                                     114.7
                                     108.9
Net benefits b
                                     97.0
                                     91.5
            a Fuel savings includes fuel consumed during additional rebound driving.
            b Net benefits shown do not include benefits associated with carbon or other co-pollutant emission reductions, accidents/congestion/noise impacts, energy security, etc.

Table IX-37 MY2018-2029 Lifetime Aggregate Impacts of the Preferred Alternative on All HD Vehicle Buyers and Operators using Method B (billions of 2012$, discounted at 7%)
                                       
                                  Baseline 1b
Vehicle costs
                                     $16.6
Maintenance & repair costs
                                     $0.6
   Total costs
                                     $17.2
Fuel savings a
(valued at retail prices)
                                    $100.1
Refueling benefits
                                     $1.6
Increased travel benefits
                                     $8.2
   Total benefits
                                    $109.9
Net benefits b
                                     $92.7
                  a Fuel savings includes fuel consumed during additional rebound driving.
              b Net benefits shown do not include benefits associated with carbon or other co-pollutant emission reductions, accidents/congestion/noise impacts, energy security, etc.

As noted, the agencies also looked at the cost of owning an individual vehicle that complies with the preferred alternative standards and associated payback period  -  the point at which reduced fuel expenditures outpace increased vehicle costs.  For example, a new MY2027 tractor is estimated to cost roughly $11,684 more (on average, or roughly 12 percent of a typical $100,000 reference case tractor) due to the addition of new GHG reducing/fuel consumption improving technology.  This new technology would result in lower fuel consumption and, therefore, reduced fuel expenditures.  But how many months or years would pass before the reduced fuel expenditures would surpass the increased upfront costs?  
Table IX-38 presents the discounted annual increased vehicle costs and fuel savings associated with owning a new MY2027 HD pickup or van using both 3 percent and 7 percent discount rates.  Table IX-39 and Table IX-40 show the same information for a MY2027 vocational vehicle and a tractor/trailer, respectively.  We have included sales taxes, excise taxes (for vocational and tractor/trailer) and increased insurance expenditures on the higher values vehicles.  We have also included maintenance costs associated with replacement of lower rolling resistance tires throughout the lifetimes of affected vehicles.  Importantly, the values behind the tables in this payback analysis do not include rebound miles driven and/or rebound gallons consumed.  Instead, the tables use reference case miles driven combined with policy case fuel consumption.  We detail these input metrics in Chapter 7 of the draft RIA.
The fuel expenditure column uses retail fuel prices specific to gasoline and diesel fuel as projected in AEO2014.  This payback analysis does not include other impacts, such as reduced refueling events, the value of driving potential rebound miles, or noise, congestion and accidents. We use retail fuel prices and exclude these other private and social impacts because the focus is meant to be on those factors that buyers think about most while considering a new vehicle purchase and those factors that result in more or fewer dollars in their pockets.  
As shown, payback would occur in the 3rd year of ownership for HD pickups and vans (the first year where cumulative net costs turn negative), in the 5th year for vocational vehicles and early in the 2nd year for tractor/trailers. Note that each table reflects the average vehicle and reflects proper weighting of fuel consumption/costs (gasoline vs. diesel).  We request comment and supporting data on all aspects of our payback analysis.
Table IX-38 Discounted Annual Incremental Expenditures for a MY2027 HD Pickup or Van using Method B and Relative to the Less Dynamic Baseline (2012$)
                                 Age in years
                               3% Discount Rate
                               7% Discount Rate
                                       
                                   Vehiclea
                                   Maint[b]
                                     Fuelc
                                  Cumulative
                                      Net
                                   Vehiclea
                                   Maint[b]
                                     Fuelc
                                  Cumulative
                                      Net
                                       1
                                                                         $1,587
                                                                             $4
                                                                          -$759
                                                                           $832
                                                                         $1,558
                                                                             $3
                                                                          -$745
                                                                           $817
                                       2
                                                                            $25
                                                                             $3
                                                                          -$734
                                                                           $126
                                                                            $23
                                                                             $3
                                                                          -$694
                                                                           $150
                                       3
                                                                            $23
                                                                             $3
                                                                          -$714
                                                                          -$561
                                                                            $21
                                                                             $3
                                                                          -$649
                                                                          -$476
                                       4
                                                                            $22
                                                                             $3
                                                                          -$693
                                                                        -$1,229
                                                                            $19
                                                                             $3
                                                                          -$606
                                                                        -$1,060
                                       5
                                                                            $20
                                                                             $3
                                                                          -$651
                                                                        -$1,857
                                                                            $17
                                                                             $2
                                                                          -$549
                                                                        -$1,590
                                       6
                                                                            $19
                                                                             $3
                                                                          -$611
                                                                        -$2,446
                                                                            $15
                                                                             $2
                                                                          -$496
                                                                        -$2,067
                                       7
                                                                            $18
                                                                             $2
                                                                          -$571
                                                                        -$2,997
                                                                            $14
                                                                             $2
                                                                          -$446
                                                                        -$2,497
                                       8
                                                                            $16
                                                                             $2
                                                                          -$536
                                                                        -$3,514
                                                                            $12
                                                                             $2
                                                                          -$403
                                                                        -$2,886
Notes:
a Includes new technology costs, insurance costs and sales taxes.
b Maintenance costs.
c Uses AEO2014 retail fuel prices.


Table IX-39 Discounted Annual Incremental Expenditures for a MY2027 Vocational Vehicle using Method B and Relative to the Less Dynamic Baseline (2012$)
                                 Age in years
                               3% Discount Rate
                               7% Discount Rate
                                       
                                   Vehiclea
                                   Maint[b]
                                     Fuelc
                                  Cumulative
                                      Net
                                   Vehiclea
                                   Maint[b]
                                     Fuelc
                                  Cumulative
                                      Net
                                       1
                                                                         $3,998
                                                                            $10
                                                                          -$965
                                                                         $3,043
                                                                         $3,924
                                                                            $10
                                                                          -$947
                                                                         $2,987
                                       2
                                                                            $63
                                                                             $9
                                                                          -$937
                                                                         $2,178
                                                                            $59
                                                                             $9
                                                                          -$885
                                                                         $2,169
                                       3
                                                                            $59
                                                                             $9
                                                                          -$914
                                                                         $1,331
                                                                            $53
                                                                             $8
                                                                          -$832
                                                                         $1,399
                                       4
                                                                            $55
                                                                             $9
                                                                          -$891
                                                                           $504
                                                                            $48
                                                                             $8
                                                                          -$780
                                                                           $675
                                       5
                                                                            $51
                                                                             $8
                                                                          -$829
                                                                          -$265
                                                                            $43
                                                                             $7
                                                                          -$699
                                                                            $27
                                       6
                                                                            $48
                                                                             $7
                                                                          -$771
                                                                          -$981
                                                                            $39
                                                                             $6
                                                                          -$625
                                                                          -$554
                                       7
                                                                            $45
                                                                             $7
                                                                          -$716
                                                                        -$1,645
                                                                            $35
                                                                             $5
                                                                          -$559
                                                                        -$1,073
                                       8
                                                                            $42
                                                                             $6
                                                                          -$667
                                                                        -$2,264
                                                                            $31
                                                                             $5
                                                                          -$501
                                                                        -$1,538
Notes:
a Includes new technology costs, insurance costs, excise and sales taxes.
b Maintenance costs.
c Uses AEO2014 retail fuel prices.



Table IX-40 Discounted Annual Incremental Expenditures for a MY2027 Tractor/Trailer using Method B and Relative to the Less Dynamic Baseline (2012$)
                                 Age in years
                               3% Discount Rate
                               7% Discount Rate
                                       
                                   Vehiclea
                                   Maint[b]
                                     Fuelc
                                  Cumulative
                                      Net
                                   Vehiclea
                                   Maint[b]
                                     Fuelc
                                  Cumulative
                                      Net
                                       1
                                                                        $15,194
                                                                            $48
                                                                       -$14,649
                                                                           $593
                                                                        $14,914
                                                                            $47
                                                                       -$14,379
                                                                           $582
                                       2
                                                                           $238
                                                                            $46
                                                                       -$14,204
                                                                       -$13,327
                                                                           $225
                                                                            $43
                                                                       -$13,421
                                                                       -$12,571
                                       3
                                                                           $223
                                                                            $44
                                                                       -$13,809
                                                                       -$26,869
                                                                           $203
                                                                            $40
                                                                       -$12,561
                                                                       -$24,889
                                       4
                                                                           $209
                                                                            $42
                                                                       -$13,416
                                                                       -$40,034
                                                                           $183
                                                                            $37
                                                                       -$11,746
                                                                       -$36,415
                                       5
                                                                           $195
                                                                            $39
                                                                       -$12,391
                                                                       -$52,191
                                                                           $164
                                                                            $33
                                                                       -$10,443
                                                                       -$46,661
                                       6
                                                                           $182
                                                                            $35
                                                                       -$11,411
                                                                       -$63,385
                                                                           $148
                                                                            $29
                                                                        -$9,258
                                                                       -$55,743
                                       7
                                                                           $170
                                                                            $32
                                                                       -$10,511
                                                                       -$73,694
                                                                           $133
                                                                            $25
                                                                        -$8,209
                                                                       -$63,794
                                       8
                                                                           $158
                                                                            $29
                                                                        -$9,704
                                                                       -$83,211
                                                                           $119
                                                                            $22
                                                                        -$7,295
                                                                       -$70,949
Notes:
a Includes new technology costs, insurance costs, excise and sales taxes.
b Maintenance costs.
c Uses AEO2014 retail fuel prices.












                                       


I.  Analysis of the Alternatives
As discussed throughout this preamble, in developing this proposal the agencies considered a number of regulatory alternatives that could result in potentially fewer or greater GHG emission and fuel consumption reductions than the program we are proposing.  This section summarizes the alternatives we considered and presents estimates of technology costs, CO2 reductions, fuel savings, and other costs and benefits associated with each alternative.  The agencies request comment on each of these alternatives, as well as other potential levels of stringency and implementation timing.  Note that since the impacts of these alternatives differ among the various heavy-duty vehicle categories, commenters are encouraged to address the alternatives separately for each vehicle category.
In developing alternatives, both agencies must consider a range of stringency.  NHTSA must consider EISA's requirement for the MD/HD fuel efficiency program.  In particular, 49 U.S.C. 32902(k)(2) and (3) contain the following three requirements specific to the MD/HD vehicle fuel efficiency improvement program: (1) The program must be "designed to achieve the maximum feasible improvement"; (2) the various required aspects of the program must be appropriate, cost-effective, and technologically feasible for MD/HD vehicles; and (3) the standards adopted under the program must provide not less than four model years of lead time and three model years of regulatory stability. In considering these various requirements, NHTSA will also account for relevant environmental and safety considerations.  
As explained in the Phase 1 rule, NHTSA has broad discretion in balancing the above factors in determining the improvement that the manufacturers can achieve. The fact that the factors may often be conflicting gives NHTSA significant discretion to decide what weight to give each of the competing policies and concerns and then determine how to balance them -- as long as NHTSA's balancing does not undermine the fundamental purpose of the EISA: energy conservation, and as long as that balancing reasonably accommodates ``conflicting policies that were committed to the agency's care by the statute."
EPA also has significant discretion in considering a range of stringency.  Section 202(a)(2) of the Clean Air Act requires only that the standards "take effect after such period as the Administrator finds necessary to permit the development and application of the requisite technology, giving appropriate consideration to the cost of compliance within such period."  This language affords EPA considerable discretion in how to weight the critical statutory factors of emission reductions, cost, and lead time.  See 76 FR 57129-130.
As discussed in this Preamble's Sections II (engines), III (tractors), IV (trailers), V (vocational vehicles), and VI (pickups and vans), although NHTSA and EPA are proposing Alternative 3 for each vehicle category, we have also closely examined the potential feasibility of Alternative 4 for each category, and specifically direct commenters' attention to the analysis and discussions contained in those sections for both Alternatives 3 and 4.  As discussed in those sections, if we reanalyze relevant existing information or receive relevant comments or new information between the proposal and final rule that supports a more accelerated implementation of the proposed standards, the agencies may consider establishing final fuel consumption and GHG standards at the Alternative 4 levels and timing if we deem them to be maximum feasible and reasonable for NHTSA and EPA, respectively.  This Section X describes all of the alternatives considered, and provides context for the relative stringency, costs, and benefits associated with Alternatives 3 and 4, as compared to the other alternatives.  The agencies seek comment on all of the alternatives, as well as whether we should consider more, fewer or different alternatives for the final rule analysis.
A.    What Are the Alternatives that the Agencies Considered?
The five alternatives below represent a broad range of potential stringency levels, and thus a broad range of associated technologies, costs and benefits for a HD vehicle fuel efficiency and GHG emissions program.  All of the alternatives were modeled using the same methodologies described in Chapter 5 of the draft RIA.  The alternatives in order of increasing fuel efficiency and GHG emissions reductions are as follows:
     (1)     Alternative 1: No Action (the Baseline for Phase 2)
OMB guidance regarding regulatory analysis indicates that proper evaluation of the benefits and costs of regulations and their alternatives requires agencies to identify a baseline:
      "You need to measure the benefits and costs of a rule against a baseline. This baseline should be the best assessment of the way the world would look absent the proposed action. The choice of an appropriate baseline may require consideration of a wide range of potential factors, including:
      :: evolution of the market,
      :: changes in external factors affecting expected benefits and costs,
      :: changes in regulations promulgated by the agency or other government entities, and
      :: the degree of compliance by regulated entities with other regulations.
      It may be reasonable to forecast that the world absent the regulation will resemble the present. If this is the case, however, your baseline should reflect the future effect of current government programs and policies. For review of an existing regulation, a baseline assuming no change in the regulatory program generally provides an appropriate basis for evaluating regulatory alternatives. When more than one baseline is reasonable and the choice of baseline will significantly affect estimated benefits and costs, you should consider measuring benefits and costs against alternative baselines. In doing so you can analyze the effects on benefits and costs of making different assumptions about other agencies' regulations, or the degree of compliance with your own existing rules. In all cases, you must evaluate benefits and costs against the same baseline. You should also discuss the reasonableness of the baselines used in the sensitivity analyses. For each baseline you use, you should identify the key uncertainties in your forecast."
A no-action alternative is also required as a baseline against which to measure environmental impacts of the proposed standards and alternatives. NHTSA, as required by the National Environmental Policy Act, is documenting these estimated impacts in the draft EIS published with this NPRM. 
As discussed later in this section, the agencies are requesting comment on Alternative 1 in order to ensure an appropriate analytical baseline (also termed `reference case') for the Phase 2 rulemaking.  Alternative 1 is an analytical tool, but, as discussed below, no new standards beyond Phase 1 is not a potential outcome of the Phase 2 rulemaking, as that outcome would not meet the requirements of either EISA or the CAA.
The No Action Alternative for today's analysis, alternatively referred to as the "baseline" or "reference case," assumes that the agencies would not issue new rules regarding MD/HD fuel efficiency and GHG emissions. That is, this alternative assumes that the Phase 1 MD/HD fuel efficiency and GHG emissions program's model year 2018 standards would be extended indefinitely and without change.
The agencies recognize that there are a number of factors that create uncertainty in projecting a baseline against which to compare the future effects of the proposed action and the remaining alternatives.  The composition of the future fleet -- such as the relative position of individual manufacturers and the mix of products they each offer -- cannot be predicted with certainty at this time.  Additionally, the heavy-duty vehicle market is diverse, as is the range of vehicle purchasers.  Heavy-duty vehicle manufacturers have reported that their customers' purchasing decisions are influenced by their customers' own determinations of minimum total cost of ownership, which can be unique to a particular customer's circumstances.  For example, some customers (e.g., less-than-truckload or package delivery operators) operate their vehicles within a limited geographic region and typically own their own vehicle maintenance and repair centers within that region.  These operators tend to own their vehicles for long time periods, and sometimes for the entire service life of the vehicle.  Their total cost of ownership is influenced by their ability to better control their own maintenance costs, and thus they can afford to consider fuel efficiency technologies that have longer payback periods, outside of the vehicle manufacturer's warranty period.  Other customers (e.g. truckload or long-haul operators) tend to operate cross-country, and thus must depend upon truck dealer service centers for repair and maintenance.  Some of these customers tend to own their vehicles for about four to seven years, so that they typically do not have to pay for repair and maintenance costs outside of either the manufacturer's warranty period or some other extended warranty period.  Many of these customers tend to require seeing evidence of fuel efficiency technology payback periods on the order of 18 to 24 months before seriously considering evaluating a new technology for potential adoption within their fleet (NAS 2010, Roeth et al. 2013, Klemick et al. 2014).  Purchasers of HD pickups and vans wanting better fuel efficiency tend to demand that fuel consumption improvements pay back within approximately one to three years, but some HD pickup and van owners accrue relatively few vehicle miles traveled per year, such that they may be less likely to adopt new fuel efficiency technologies, while other owners who use their vehicle(s) with greater intensity may be even more willing to pay for fuel efficiency improvements.  Regardless of the type of customer, their determination of minimum total cost of ownership involves the customer balancing their own unique circumstances with a heavy-duty vehicle's initial purchase price, availability of credit and lease options, expectations of vehicle reliability, resale value and fuel efficiency technology payback periods. The degree of the incentive to adopt additional fuel efficiency technologies also depends on customer expectations of future fuel prices, which directly impacts customer payback periods.
Another factor the agencies considered is that other federal and state-level policies and programs are specifically aimed at stimulating fuel efficiency technology development and deployment.  Particularly relevant to this sector are DOE's 21[st] Century Truck Partnership, EPA's voluntary SmartWay Transport program, and California's AB32 fleet requirements.[,][,]  The future availability of more cost-effective technologies to reduce fuel consumption could provide manufacturers an incentive to produce more fuel-efficient medium- and heavy-duty vehicles, which in turn could provide customers an incentive to purchase these vehicles.  The availability of more cost-effective technologies to reduce fuel consumption could also lead to a substitution of less cost-effective technologies, where overall fuel efficiency could remain fairly flat if buyers are less interested in fuel consumption improvements than in reduced vehicle purchase prices and/or improved vehicle performance and/or utility.
Although we have estimated the cost and efficacy of fuel-saving technologies assuming performance and utility will be held constant, some uncertainty remains regarding whether these conditions will actually be observed.  In particular, we have assumed payload will be preserved (and possibly improved via reduced vehicle curb weight); however, some fuel-saving technologies, such as natural gas fueled vehicles and hybrid electric vehicles, could reduce payload via increased curb weight due to the fuel tanks or added electrical machine, batteries and controls.  It is also possible that under extended high power demand resulting from a vehicle towing up a road grade, certain types of hybrid powertrains could experience a temporary loss of towing capacity if the capacity of the hybrid's energy storage device (e.g., batteries, hydraulic accumulator) is insufficient for the extended power demand. We have also assumed that fuel-saving technologies will be no more or less reliable than technologies already in production.  However, if manufacturers pursue risky technologies or if the agencies provide insufficient lead-time to fully develop new technologies, they could prove to be less reliable, perhaps leading to increased repair costs and out-of-service time.  This was observed as an unintended consequence of certain manufacturers' initial introduction of certain emissions control technologies to meet EPA's most stringent heavy-duty engine standards.  If the fuel-saving technologies considered here ultimately involve similar reliability problems, overall costs will be greater than we have estimated.  We have assumed drivers will be as accepting of new fuel-saving technologies as they are of technologies already in service.  However, drivers could be less accepting of newer technologies -- particularly any that must be deployed manually.  Except for increased costs to replace more efficient tires, we have assumed that routine maintenance costs will not increase or decrease. However, maintenance of new technologies could involve unique tools and parts.  Therefore, maintenance costs could increase, and maintenance could involve increased vehicle out-of-service time.  On the other hand new technologies can sometimes prove to be more reliable and require less maintenance than the technologies they replace.  One example of this is the auxiliary power unit (APU) frequently installed on heavy-duty sleeper cab tractors.  In the past these have been typically powered by small nonroad diesel engines that can require more frequent maintenance than the main engine of the tractor itself.  However, more recently, as electric battery technology has advanced, some tractor manufacturers have introduced battery APUs instead of engine-driven APUs.  A comparison of recent sales of small engine driven APUs versus battery APUs suggests that customers may prefer battery APUs, and some operators and tractor dealerships have also told the agencies that the decrease in routine maintenance was an important factor in purchase decisions in favor of battery APUs.  Again, insofar as these unaccounted-for costs or savings actually occur, overall costs could be larger or smaller than we have estimated.  We have also applied the EIA's AEO estimates of future fuel prices; however, heavy-duty vehicle customers could be uncertain that fuel prices will rise, thereby reducing the extent to which applying new technology to reduce fuel consumption will lead to a reduced total cost of ownership and dampening enthusiasm for that new technology. 
Considering all of these factors, the agencies have approached the definition of the No Action Alternative separately for each vehicle and engine category covered by today's proposal.
For trailers, the agencies considered two No Action alternatives to cover a nominal range of uncertainty. The trailer category is unique in the context of this rulemaking because it is the only heavy-duty category not regulated under Phase 1.  In both No Action cases, the agencies projected that the combination of EPA's voluntary SmartWay program, DOE's 21[st] Century Truck Partnership, California's AB32 trailer requirements for fleets, and the potential for significantly reduced operating costs should result in continuing improvement to new trailers.  Taking this into account, the agencies project that in 2018, 50 percent of new 53' dry van and reefer trailers would have technologies qualifying for the SmartWay label (5 percent aerodynamic improvements and lower rolling resistance tires) and 50 percent would have automatic tire inflation systems to maintain optimal tire pressure.  We also project that adoption of those same technologies would increase 1 percent per year until each technology is being used on 60 percent of new trailers.  In the first case, Alternative 1a, this means that the agencies project that in the absence of new standards, the new trailer fleet technology would stabilize in 2027 to a level of 60 percent adoption in 2027 for the No Action alternative.  In the second case, Alternative 1b, the agencies projected that the fraction of the in-use fleet qualifying for SmartWay would continue to increase beyond 2027 as older trailers are replaced by newer trailers.  We projected that these improvements would continue until 2040 when 75 percent of new trailers would be assumed to include skirts.
For vocational vehicles, the agencies considered one No Action alternative.  For the vocational vehicle category the agencies recognized that these vehicles tend to operate over fewer vehicle miles travelled per year.  Therefore, the projected payback periods for fuel efficiency technologies available for vocational vehicles are generally longer than the payback periods the agencies consider likely to lead to their adoption based solely on market forces.  This is especially true for vehicles used in applications in which the vehicle operation is secondary to the primary business of the company using the vehicle.  For example, since the fuel consumption of vehicles used by utility companies to repair power lines would generally be a smaller cost relative to the other costs of repairing lines, fuel saving technologies would generally not be as strongly demanded for such vehicles.  Thus, the agencies project that fuel-saving technologies would either not be applied or only be applied as a substitute for more expensive fuel efficiency technologies, except as necessitated by the Phase 1 fuel consumption and GHG standards. 
For tractors, the agencies considered two No Action alternatives to cover a nominal range of uncertainty.  For Alternative 1a the agencies project that fuel-saving technologies would either not be applied or only be applied as a substitute for more expensive fuel efficiency technologies to tractors (thereby enabling manufacturers to offer tractors that are less expensive to purchase), except as necessitated by the Phase 1 fuel consumption and GHG standards. In Alternative 1b the agencies estimated that some available technologies would save enough fuel to pay back fairly quickly  -  within the first six months of ownership.  The agencies considered a range of information to formulate these two baselines for tractors.
Both public and confidential historical information shows that tractor trailer fuel efficiency improved steadily through improvements in engine efficiency and vehicle aerodynamics over the past 40 years, except for engine efficiency which decreased or was flat between 2000 and approximately 2007 as a consequence of incorporating technologies to meet engine emission regulations.  And today vehicle manufacturers, the Federal Government, academia and others continue to invest in research to develop fuel efficiency improving technologies for the future.
There is also evidence that manufacturers have, in the past, applied technologies to improve fuel efficiency absent a regulatory requirement to do so.  Some manufacturers have even taken regulatory risk in order to increase fuel efficiency; in the 1990s, when fuel was comparatively inexpensive, some tractor manufacturers designed tractor engine controls to determine when the vehicle was not being emissions tested and, under such conditions, shift to more fuel-efficient operation even though doing so caused the vehicles to violate federal standards for NOx emissions.  Also, some manufacturers have recently expressed concern that the Phase I tractor standards do not credit them for fuel-saving technologies they had already implemented before the Phase I standards were adopted.
	In public meetings and in meetings with the agencies, the trucking industry stated that fuel cost for tractors is the number one or number two expense for many operators, and therefore is a very important factor for their business.  However, the pre-Phase 1 market suggests that, tractor manufacturers and operators could be slow to adopt some new technologies, even where the agencies have estimated that the technology would have paid for itself within a few months of operation.  Tractor operators have told the agencies they generally require technologies to be demonstrated in their fleet before widespread adoption so they can assess the actual fuel savings for their fleet and any increase in cost associated with effects on vehicle operation, maintenance, reliability, mechanic training, maintenance and repair equipment, stocking unique parts and driver acceptance, as well as effects on vehicle resale value.  Tractor operators have publicly stated they would consider conducting an assessment of technologies when provided with data that show the technologies may payback costs through fuel savings within 18 to 24 months, based on their assumptions about future fuel costs.  In these cases, an operator may first conduct a detailed paper study of anticipated costs and benefits.  If that study shows likely payback in 18 to 24 months for their business, the fleet may acquire one or several tractors with the technology to directly measure fuel savings, costs and driver acceptance for their fleet.  Small fleets may not have resources to conduct assessments to this degree and may rely on information from larger fleets or observations of widespread acceptance of the technology within the industry before adopting a technology.  This uncertainty over the actual fuel savings and costs and the lengthy process to assess technologies significantly slows the pace at which fuel efficiency technologies are adopted.  
The agencies believe that using the two baselines addresses the uncertainties we have identified for tractors.  The six-month payback period of Alternative 1b reflects the agencies' consideration of factors, discussed above, that could limit -- yet not eliminate -- manufacturers' tendencies to voluntarily improve fuel consumption.  In contrast, Alternative 1a reflects a baseline wherein manufacturers either do not apply fuel efficiency technologies or only apply them as a substitute for more expensive fuel efficiency technologies, except as necessitated by the Phase 1 fuel consumption and GHG standards.
For HD pickups and vans, the agencies considered two No Action alternatives to cover a nominal range of uncertainty. In Alternative 1b the agencies considered additional technology application, which involved the explicit estimation of the potential to add specific fuel-saving technologies to each specific vehicle model included in the agencies' HD pickup and van fleet analysis, as discussed in Chapter VI.  Estimated technology application and corresponding impacts depend on the modeled inputs.  Also, under this approach a manufacturer that has improved fuel consumption and GHG emissions enough to achieve compliance with the standards is assumed to apply further improvements, provided those improvements reduce fuel outlays by enough (within a specified amount of time, the payback period) to offset the additional costs to purchase the new vehicle.  These calculations explicitly account for and respond to fuel prices, vehicle survival and mileage accumulation, and the cost and efficacy of available fuel-saving technologies.  Therefore, all else being equal, more technology is applied when fuel prices are higher and/or technology is more cost-effective.  Manufacturers of HD pickups and vans have reported to the agencies that buyers of these vehicles consider the total cost of vehicle ownership, not just new vehicle price, and that manufacturers plan as if buyers will expect fuel consumption improvements to "pay back" within periods ranging from approximately one to three years.  For example, some manufacturers made decisions to introduce more efficient HD vans and HD pickup transmissions before such vehicles were subject to fuel consumption and/or GHG standards.  However, considering factors discussed above that could limit manufacturers' tendency to voluntarily improve HD pickup and van fuel consumption, Alternative 1b applies a 6-month payback period.  In contrast for Alternative 1a the agencies project that fuel-saving technologies would either not be applied or only be applied as a substitute for more expensive fuel efficiency technologies, except as necessitated by the Phase 1 fuel consumption and GHG standards.  In terms of impacts under reference case fuel prices, the payback period input plays a more significant role under the No-Action Alternatives (defined by a continuation of model year 2018 standards) than under the more stringent regulatory alternatives described next.
     (2)     Alternative 2: Less Stringent than the Preferred Alternative
For vocational vehicles and combination tractor-trailers, Alternative 2 represents a stringency level which is approximately half as stringent overall as the preferred alternative.  The agencies developed Alternative 2 to consider a continuation of the Phase 1 approach of applying off-the-shelf technologies rather than requiring the development of new technologies or fundamental improvements to existing technologies.  For tractors and vocational vehicles, this also involved less integrated optimization of the vehicles and engines.  Put another way, Alternative 2 is not technology-forcing.  See, e.g., Sierra Club v. EPA, 325 F. 3d 374, 378 (D.C. Cir. 2003) (under a technology-forcing provision, EPA "must consider future advances in pollution control capability"); see also similar discussion in Husqvarna AB v. EPA, 254 F. 3d 195, 201 (D.C. Cir. 2001). 
The agencies' decisions regarding which technologies could be applied to comply with Alternative 2 considered not only assuming the use of only off-the shelf technologies, but also considered other factors as well, such as how broadly certain technologies fit in-use applications and regulatory structure.   The resulting Alternative 2 could be met with most of the same technologies the agencies project could be used to meet the proposed standards, although at lower application rates.  Alternative 2 is estimated to be achievable without the application of some technologies, at any level.  These and other differences are described below by category.
The agencies project that Alternative 2 combination tractor standards could be met by applying lower adoption rates of the projected technologies for Alternative 3.  This includes a projection of slightly lower per-technology effectiveness for Alternative 2 versus 3.   Alternative 2 also assumes that there would be little optimization of combination tractor powertrains.  
The agencies project that the Alternative 2 vocational vehicle standard could be met without any use of strong hybrids.  Rather, it could be met with lower adoption rates of the other technologies that could be used to meet Alternative 3, our proposed standards.  This includes a projection of slightly lower per-technology effectiveness for Alternative 2 versus 3 and little optimization of vocational vehicle powertrains.  
The Alternative 2 trailer standards would apply to only 53-foot dry and refrigerated box trailers and could be met through the use of less effective aerodynamic technologies and higher rolling resistance tires versus what the agencies projected could be used to meet Alternative 3.
As discussed above in Section VI.D., the HD pickup truck and van alternatives are characterized by an annual required percentage change (decrease) in the functions defining attribute-based targets for per-mile fuel consumption and GHG emissions.  Under the standards in each alternative, a manufacturer's fleet would, setting aside any changes in production mix, be required to achieve average fuel consumption/GHG levels that increase in stringency every year relative to the standard defined for MY2018 (and held constant through 2020) that establishes fuel consumption/GHG targets for individual vehicles.  A manufacturer's specific fuel consumption/GHG requirement is the sales-weighted average of the targets defined by the work-factor curve in each year.  Therefore, although the alternatives involve steady increases in the functions defining the targets, stringency increases faced by any individual manufacturer may not be steady if changes in the manufacturer's product mix cause fluctuations in the average fuel consumption and GHG levels required of the manufacturer.  See Section VI.D. for additional discussion of this topic.  Alternative 2 represents a 2.0 percent annual improvement through 2025 in fuel consumption/GHG emissions relative to the work-factor curve in 2020.  This would be 0.5 percent less stringent per year compared to the proposed standards of Alternative 3.  
For HD pickups and vans the agencies project that most manufacturers could comply with the standards defining Alternative 2 by applying technologies similar to those that could be applied in order to comply with the proposed standards, but at lower application rates than could be necessitated by the proposed standards.  The biggest technology difference the agencies project between Alternative 2 and the proposed standards of Alternative 3 would be that we project that most manufacturers could meet the Alternative 2 standards without any use of stop-start or other mild or strong hybrid technologies.
Of course, these estimates depend not only on the stringency of the standards defining this regulatory alternative, but also on other input estimates, in particular the detailed composition of the agencies' HD pickup and van market forecast; the agencies' estimates of the future availability, cost, and efficacy of fuel-saving HD pickup and van technologies; and the agencies' estimates of future fuel prices.  Even without changes to the standards defining this regulatory alternative, changes to analysis inputs would lead to different estimates of the extent to which various technologies might be applied under this regulatory alternative.
The agencies are not proposing Alternative 2 as a matter of both policy and law.  Based on our current analysis for each of the subcategories, it presently appears that technically feasible alternate standards are available that provide for greater emission reductions and reduced fuel consumption, including the proposed standards.  Such alternative standards, including the proposed standards and potentially Alternative 4, are feasible at reasonable cost, considering both per-vehicle and per-engine cost, cost-effectiveness, and lead time.  Consequently, at this point the agencies do not believe that the modest improvements in Alternative 2 would be appropriate or otherwise reasonable under Section 202 (a) (1) and (2) of the Clean Air Act, or represent the "maximum feasible improvement" within the meaning of 49 U.S.C. Section 32902(k)(2).  
     (3)     Alternative 3: Preferred Alternative and Proposed Standards
The agencies are proposing Alternative 3 for HD engines, HD pickup trucks and vans, Class 2b through Class 8 vocational vehicles, Class 7 and 8 combination tractors, and most categories of trailers.  Details regarding modeling of this alternative are included in Chapter 5 of the draft RIA.  
Unlike the Phase 1 standards where the agencies projected that manufacturers could meet the Phase 1 standards with off-the-shelf technologies only, the agencies project that Alternative 3 standards could be met through a combination of off-the-shelf technologies applied at higher market penetration rates and new technologies that are still in various stages of development and not yet in production.  Although this alternative is technology-forcing, it must be kept in mind that the standards themselves are performance-based and thus do not mandate any particular technology be used to meet the standards.  The agencies recognize that there is some uncertainty in projecting costs and effectiveness for those technologies not yet available on the market, but we do not believe, as discussed comprehensively in Sections II, III, IV, V, and VI, that such uncertainty is not sufficient to render Alternative 3 beyond the reasonable or maximum feasible level of stringency for each of the vehicle categories covered by this program.  Given that all of the proposed standards are performance-based rather than mandates of specific technologies, and given that the lead time for the most stringent standards in Alternative 3 is greater than 10 years, the agencies believe that the performance that would be required by these stringency levels of Alternative 3 would allow each manufacturer to choose to develop technology and apply it to their vehicles in a way that balances their unique business constraints and reflects their specific market position and customers' needs.
Sections II through VI of this notice provide comprehensive explanations of the consideration that the agencies gave to proposing standards that are more accelerated than Alternative 3, based on the agencies' projection of how such standards could be met through the accelerated application of technologies and our reasons for concluding that the identified technologies for each of the vehicle and engine standards that constitute Alternative 3 represent the maximum feasible (within the meaning of 49 USC 32902 (k)) and reasonable (for purposes of CAA section 202 (a)) based on all of the information available to the agencies at the time of this proposal. 
     (4)     Alternative 4: More Accelerated than the Preferred Alternative
As indicated by its description in the title above, Alternative 4 represents standards that are effective on a more accelerated timeline in comparison to the timeline of the proposed standards in Alternative 3.  The agencies believe that Alternative 4 could potentially be maximum feasible and appropriate, but at this time the agencies have identified sufficient uncertainty in the information that the agencies have considered with respect to the technologies' readiness, effectiveness and costs such that the agencies cannot yet conclude that Alternative 4 represents maximum feasible and appropriate standards.  Accordingly, although we are not proposing Alternative 4, we are requesting comment on adopting some or all of Alternative 4 in the final rule.  The agencies would especially welcome data on the projected readiness, effectiveness, and costs of technologies the agencies consider for compliance with Alternative 4 standards, which in many cases are identical to the technologies considered for the Alternative 3 standards.  It would be especially helpful if commenters addressed each category separately; namely, tractors and vocational vehicles and their engines; trailers, and pickups and vans.  The agencies would consider adopting Alternative 4's stringencies and lead time for the final rule, depending on the information and comments received in response to this notice and based on additional consideration of the information we already have in-hand.
Alternatives 3 and 4 were both designed to achieve similar fuel efficiency and GHG emission levels in the long term but with Alternative 4 being accelerated in its implementation timeline.  Specifically, alternative 4 reflects the same or similar standard stringency levels as alternative 3, but 3 years sooner (2 years for heavy-duty pickups and vans), so that the final phase of the standards would occur in MY 2024, or (for heavy duty pickups and vans) 2025.
As discussed above and in the feasibility discussions in Sections II-VI, we are not proposing Alternative 4.  By accelerating the adoption schedule, this option would result in several model years of incrementally greater fuel consumption and GHG emission reductions than Alternative 3, but it does raise concerns about adequacy of lead time.  The agencies are concerned that there may be aspects of implementing Alternative 4 unaccounted for in our analysis regarding reliability, manufacturer flexibility to meet heavy-duty vehicle customers' diverse demands, and ultimately potential feasibility within the available lead times.
The agencies recognize the potential for larger net benefits if Alternative 4 were selected, and we therefore welcome comments addressing the feasibility and availability of relevant technologies in the identified lead time.  Commenters are particularly encouraged to address all aspects of feasibility analysis, including effectiveness and costs, the likelihood of developing available technologies to achieve sufficient reliability within the proposed lead time, and the extent to which the heavy-duty vehicle market would accept and utilize the technology.  Comments should ideally address these issues separately for each type of technology, especially with respect to advanced technologies like waste heat recovery systems and hybrid powertrains.  Although we summarize the specific differences below, readers are encouraged to see Sections II through VI for more detailed descriptions of how the agencies projected how manufacturers could implement certain technologies in order to meet the standards of Alternative 4. 
The agencies project that Alternative 4 combination tractor standards could be met by applying initially higher adoption rates of the projected technologies for Alternative 3.  This includes a projection of slightly higher per-technology effectiveness for Alternative 4 versus 3.   Alternative 4 also assumes that there would be more optimization of combination tractor powertrains and earlier market penetration of engine waste heat recovery systems.  
The agencies project that the Alternative 4 vocational vehicle standard could be met through earlier adoption rates of the same technology packages projected for Alternative 3.  This includes a projection of slightly higher per-technology effectiveness for Alternative 4 versus 3.  
The Alternative 4 trailer standards could be met through earlier implementation of more effective aerodynamic technologies, including the use of aerodynamic skirts and boat tails.  This would be in addition to implementing lower rolling resistance tires for nearly all trailers. 
HD pickup truck and van standards defining Alternative 4 represent a 3.5 percent annual improvement in fuel consumption and GHG emissions through 2025 relative to the work-factor curves in 2020.  Of course, this finding depends not only on the stringency of the standards defining this regulatory alternative, but also on other input estimates, in particular the detailed composition of the agencies' HD pickup and van market forecast; the agencies' estimates of the future availability, cost, and efficacy of fuel-saving HD pickup and van technologies; and the agencies' estimates of future fuel prices.
     (5)     Alternative 5: Even More Stringent Standards with No Additional Lead-time 
Alternative 5 represents even more stringent standards compared to Alternatives 3 and 4, as well as the same implementation timeline as Alternative 4.  As discussed above and in the feasibility discussions in Sections II-VI, we are not proposing Alternative 5 because we cannot project that manufacturers can develop and introduce in sufficient quantities the technologies that could be used to meet Alternative 5 standards.   We believe that for some or all of the categories, the Alternative 5 standards are technically infeasible within the lead time allowed.  We have not fully estimated costs for this alternative for tractors and vocational vehicles because we believe that there would be such substantial additional costs related to pulling ahead the development of so many additional technologies that we cannot accurately predict these costs.  We also believe this alternative could result in a decrease in the in-use reliability and durability of new heavy-duty vehicles and that we do not have the ability to accurately quantify the costs that would be associated with such problems. Instead we merely note that costs would be significantly greater than the estimated costs for Alternatives 3 and 4.
B.    How Do These Alternatives Compare in Overall Fuel Consumption and GHG Emissions Reductions and in Benefits and Costs?
The following tables compare the overall fuel consumption and GHG emissions reductions and benefits and costs of each of the regulatory alternatives the agencies considered.
Note that for tractors, trailers, pickups and vans the agencies compared overall fuel consumption and GHG emissions reductions and benefits and costs relative to two different baselines, described above in the section on the No Action alternative.  Therefore, for tractors, trailers, pickups and vans two results are listed; one relative to each baseline, namely Alternative 1a and Alternative 1b.
Also note that the agencies analyzed pickup and van overall fuel consumption and emissions reductions and benefits and costs using the Volpe Center's HD CAFE model (Method A).  In addition, the agencies used EPA's MOVES model to estimate pickup and van fuel consumption and emissions and a cost methodology that applied vehicle costs in different model years (Method B).  In both cases, the agencies used the HD CAFE model to estimate average per vehicle cost and fuel consumption, and this analysis extended through model year 2030.  The agencies concluded that in these instances the choice of baseline and the choice of modeling approach (Method A versus Method B) did not impact the agencies' decision to propose Alternative 3 as the preferred alternative and hence the proposed standards for HD pickups and vans.
Table X-1 compares fuel savings, technology costs, avoided GHG emissions, costs, and benefits for the above regulatory alternatives as estimated under Method A.  Table X-2 Error! Reference source not found.provides the same comparisons for Method B.  Subsequent tables summarize segment-specific results and projections for longer-term impacts.  The regulatory impact analysis (RIA) accompanying today's notice presents more detailed results of the agencies' analysis.
     (1)  Method A Tables
Table X-1 Summary of Costs And Benefits through MY 2029 by Alternative, Method A
                                       
The following two tables summarize results for each of the segments covered by today's proposal.
Table X-2 Summary of Program Benefits and Costs through MY 2029, Discounted at 3% (Relative to Baseline 1a)
                                       
Table X-3 Summary of Program benefits and costs through MY 2029, discounted at 3% (relative to Baseline 1b)
                                       
	As discussed above, the vehicle buyers' (i.e., consumers') perspective is distinct insofar as it includes avoided fuel taxes, but does not include avoided externalities (e.g., the social cost of GHG emissions).  The following two tables summarize impacts considered from this perspective.
Table X-4 Consumer Impacts For New Vehicle Buyers In 2027 (Relative To Baseline 1a)
                                       
Table X-5 Consumer Impacts For New Vehicle Buyers In 2027 (Relative To Baseline 1b)
                                       
While the agencies' explicit analysis of manufacturers' potential responses to today's standards extends through model year 2030, the resulting fuel savings and avoided emissions summarized in the following two tables out to 2035 an 2050.
Table X-6 Fuel and GHG Savings By Alternative, Relative To Baseline 1a
                                       

Table X-7 Fuel and GHG savings by alternative, relative to baseline 1a
                                       

     (2)  Method B Tables
      Table X-8 Annual GHG and Fuel Reductions in 2035 and 2050 using Method B and Relative to the Less Dynamic Baseline
UPSTREAM & DOWNSTREAM GHG REDUCTIONS
                                     (MMT)
                                FUEL REDUCTIONS
                               (BILLION GALLONS)
                                       
                                     2035
                                     2050
                                     2035
                                     2050
Alt. 2 Less Stringent - Total
                                                                             72
                                                                            101
                                                                            5.2
                                                                            7.3
                                                          Tractors and Trailers
                                                                             59
                                                                             84
                                                                            4.2
                                                                            6.0
                                                               HD Pickup Trucks
                                                                              8
                                                                             11
                                                                            0.7
                                                                            0.9
                                                            Vocational Vehicles
                                                                              5
                                                                              7
                                                                            0.3
                                                                            0.5
Alt. 3 Preferred  -  Total
                                                                            127
                                                                            183
                                                                            9.3
                                                                           13.4
                                                          Tractors and Trailers
                                                                             97
                                                                            141
                                                                            7.0
                                                                           10.1
                                                               HD Pickup Trucks
                                                                             14
                                                                             19
                                                                            1.1
                                                                            1.6
                                                            Vocational Vehicles
                                                                             16
                                                                             23
                                                                            1.2
                                                                            1.7
Alt. 4 More Stringent  -  Total
                                                                            132
                                                                            184
                                                                            9.7
                                                                           13.5
                                                          Tractors and Trailers
                                                                            100
                                                                            141
                                                                            7.2
                                                                           10.1
                                                               HD Pickup Trucks
                                                                             15
                                                                             19
                                                                            1.2
                                                                            1.6
                                                            Vocational Vehicles
                                                                             17
                                                                             23
                                                                            1.3
                                                                            1.7
Alt. 5 More Stringent  -  Total
                                                                            168
                                                                            232
                                                                           12.4
                                                                           17.0
                                                          Tractors and Trailers
                                                                            126
                                                                            176
                                                                            9.0
                                                                           12.6
                                                               HD Pickup Trucks
                                                                             17
                                                                             22
                                                                            1.4
                                                                            1.8
                                                            Vocational Vehicles
                                                                             26
                                                                             34
                                                                            1.9
                                                                            2.5

                                                                               
                                                                               
                                                                               
                                                                               


Table X-9 Benefit & Cost Comparison for each Alternative using Method B and Relative to Less Dynamic Baseline 
(Monetary Values in Billions of 2012$, GHG Reductions in Million Metric Tons)
                                       
                                 Benefit-Cost
                                   Category
                                     Alt 2
                                     Alt 3
                                     Alt 4
                                     Alt 5
                                     2035
Vehicle program
                                                                          -$2.6
                                                                          -$5.9
                                                                          -$6.2
                                                                            N/A
                                       
Maintenance
                                                                         -$0.06
                                                                         -$0.13
                                                                         -$0.14
                                                                            N/A
                                       
Fuel (pre-tax)
                                                                          $20.9
                                                                          $37.2
                                                                          $38.7
                                                                          $49.4
                                       
Benefits
                                                                          $12.8
                                                                          $20.5
                                                                          $21.1
                                                                          $26.3
                                       
Net benefits
                                                                          $31.1
                                                                          $51.7
                                                                          $53.5
                                                                            N/A
                                       
GHG reductions (MMT)
                                                                           71.9
                                                                          127.1
                                                                          132.0
                                                                          168.3
                                     2050
Vehicle program
                                                                          -$3.1
                                                                          -$7.0
                                                                          -$7.4
                                                                            N/A
                                       
Maintenance
                                                                         -$0.06
                                                                         -$0.13
                                                                         -$0.14
                                                                            N/A
                                       
Fuel (pre-tax)
                                                                          $31.5
                                                                          $57.5
                                                                          $57.6
                                                                          $72.7
                                       
Benefits
                                                                          $19.9
                                                                          $32.9
                                                                          $32.9
                                                                          $40.6
                                       
Net benefits
                                                                          $48.3
                                                                          $83.2
                                                                          $83.0
                                                                            N/A
                                       
GHG reductions (MMT)
                                                                          101.2
                                                                          183.4
                                                                          183.8
                                                                          231.8
                                    NPV, 3%
Vehicle program
                                                                         -$39.8
                                                                         -$86.8
                                                                         -$98.6
                                                                            N/A
                                       
Maintenance
                                                                         -$0.88
                                                                         -$1.80
                                                                         -$1.91
                                                                            N/A
                                       
Fuel (pre-tax)
                                                                         $280.0
                                                                         $495.6
                                                                         $517.6
                                                                         $664.3
                                       
Benefits
                                                                         $175.2
                                                                         $279.7
                                                                         $289.7
                                                                         $361.5
                                       
Net benefits
                                                                         $414.5
                                                                         $686.8
                                                                         $706.8
                                                                            N/A
                                    NPV, 7%
Vehicle program
                                                                         -$19.3
                                                                         -$41.1
                                                                         -$48.4
                                                                            N/A

Maintenance
                                                                         -$0.42
                                                                         -$0.86
                                                                         -$0.92
                                                                            N/A

Fuel (pre-tax)
                                                                         $118.1
                                                                         $206.7
                                                                         $219.0
                                                                         $283.0

Benefits
                                                                         $105.5
                                                                         $173.5
                                                                         $180.7
                                                                         $228.0

Net benefits
                                                                         $203.8
                                                                         $338.1
                                                                         $350.5
                                                                            N/A

Table X-10 Benefit & Cost Comparison for each Alternative using Method B and Relative to Less Dynamic Baseline
HD Pickup and Vans only 
(Monetary Values in Billions of 2012$, GHG Reductions in Million Metric Tons)
                                       
                                 Benefit-Cost
                                   Category
                                     Alt 2
                                     Alt 3
                                     Alt 4
                                     Alt 5
                                     2035
Vehicle program
                                                                          -$0.5
                                                                          -$0.9
                                                                          -$1.2
                                                                            N/A

Maintenance
                                                                         -$0.01
                                                                         -$0.01
                                                                         -$0.01
                                                                            N/A

Fuel (pre-tax)
                                                                           $2.5
                                                                           $4.2
                                                                           $4.4
                                                                           $5.0

Benefits
                                                                           $1.4
                                                                           $2.2
                                                                           $2.3
                                                                           $2.6

Net benefits
                                                                           $3.4
                                                                           $5.5
                                                                           $5.5
                                                                            N/A

GHG reductions (MMT)
                                                                            8.1
                                                                           13.9
                                                                           14.6
                                                                           16.6
                                     2050
Vehicle program
                                                                          -$0.5
                                                                          -$1.0
                                                                          -$1.4
                                                                            N/A

Maintenance
                                                                         -$0.01
                                                                         -$0.01
                                                                         -$0.01
                                                                            N/A

Fuel (pre-tax)
                                                                           $3.5
                                                                           $6.3
                                                                           $6.3
                                                                           $7.2

Benefits
                                                                           $2.1
                                                                           $3.5
                                                                           $3.5
                                                                           $4.0

Net benefits
                                                                           $5.1
                                                                           $8.7
                                                                           $8.4
                                                                            N/A

GHG reductions (MMT)
                                                                           10.8
                                                                           19.3
                                                                           19.4
                                                                           22.1
                                    NPV, 3%
Vehicle program
                                                                          -$7.5
                                                                         -$13.5
                                                                         -$19.6
                                                                            N/A

Maintenance
                                                                         -$0.18
                                                                         -$0.18
                                                                         -$0.18
                                                                            N/A

Fuel (pre-tax)
                                                                          $31.4
                                                                          $53.5
                                                                          $56.8
                                                                          $64.9

Benefits
                                                                          $18.7
                                                                          $29.2
                                                                          $30.7
                                                                          $34.6

Net benefits
                                                                          $42.4
                                                                          $69.1
                                                                          $67.7
                                                                            N/A
                                    NPV, 7%
Vehicle program
                                                                          -$3.7
                                                                          -$6.5
                                                                          -$9.7
                                                                            N/A

Maintenance
                                                                         -$0.08
                                                                         -$0.08
                                                                         -$0.08
                                                                            N/A

Fuel (pre-tax)
                                                                          $13.1
                                                                          $21.9
                                                                          $23.7
                                                                          $27.1

Benefits
                                                                          $11.4
                                                                          $18.2
                                                                          $19.3
                                                                          $21.8

Net benefits
                                                                          $20.7
                                                                          $33.5
                                                                          $33.2
                                                                            N/A
 
Table X-11 Benefit & Cost Comparison for each Alternative using Method B and Relative to Less Dynamic Baseline
Vocational Vehicles only 
(Monetary Values in Billions of 2012$, GHG Reductions in Million Metric Tons)
                                       
                                 Benefit-Cost
                                   Category
                                     Alt 2
                                     Alt 3
                                     Alt 4
                                     Alt 5
                                     2035
Vehicle program
                                                                          -$0.2
                                                                          -$2.1
                                                                          -$2.1
                                                                            N/A

Maintenance
                                                                         -$0.02
                                                                         -$0.03
                                                                         -$0.04
                                                                            N/A

Fuel (pre-tax)
                                                                           $1.3
                                                                           $4.7
                                                                           $5.1
                                                                           $7.6

Benefits
                                                                           $1.1
                                                                           $2.6
                                                                           $2.8
                                                                           $3.9

Net benefits
                                                                           $2.2
                                                                           $5.2
                                                                           $5.8
                                                                               

GHG reductions (MMT)
                                                                            4.7
                                                                           16.1
                                                                           17.4
                                                                           25.8
                                     2050
Vehicle program
                                                                          -$0.3
                                                                          -$2.4
                                                                          -$2.4
                                                                            N/A

Maintenance
                                                                         -$0.02
                                                                         -$0.03
                                                                         -$0.04
                                                                            N/A

Fuel (pre-tax)
                                                                           $2.0
                                                                           $7.3
                                                                           $7.3
                                                                          $10.7

Benefits
                                                                           $1.7
                                                                           $4.2
                                                                           $4.2
                                                                           $5.9

Net benefits
                                                                           $3.4
                                                                           $9.0
                                                                           $9.1
                                                                            N/A

GHG reductions (MMT)
                                                                            6.5
                                                                           23.2
                                                                           23.3
                                                                           33.9
                                    NPV, 3%
Vehicle program
                                                                          -$3.6
                                                                         -$29.6
                                                                         -$32.8
                                                                            N/A

Maintenance
                                                                         -$0.22
                                                                         -$0.42
                                                                         -$0.52
                                                                            N/A

Fuel (pre-tax)
                                                                          $16.9
                                                                          $60.6
                                                                          $66.3
                                                                          $99.9

Benefits
                                                                          $14.8
                                                                          $34.8
                                                                          $37.4
                                                                          $52.7

Net benefits
                                                                          $27.9
                                                                          $65.4
                                                                          $70.3
                                                                            N/A
                                    NPV, 7%
Vehicle program
                                                                          -$1.7
                                                                         -$13.8
                                                                         -$16.0
                                                                            N/A

Maintenance
                                                                         -$0.10
                                                                         -$0.19
                                                                         -$0.24
                                                                            N/A

Fuel (pre-tax)
                                                                           $6.9
                                                                          $24.7
                                                                          $27.9
                                                                          $42.5

Benefits
                                                                           $8.3
                                                                          $21.5
                                                                          $23.4
                                                                          $33.8

Net benefits
                                                                          $13.4
                                                                          $32.2
                                                                          $35.0
                                                                            N/A
 
Table X-12 Benefit & Cost Comparison for each Alternative using Method B and Relative to Less Dynamic Baseline
Tractor/Trailers only 
(Monetary Values in Billions of 2012$, GHG Reductions in Million Metric Tons)
                                       
                                 Benefit-Cost
                                   Category
                                     Alt 2
                                     Alt 3
                                     Alt 4
                                     Alt 5
                                     2035
Vehicle program
                                                                          -$1.9
                                                                          -$2.9
                                                                          -$2.9
                                                                            N/A

Maintenance
                                                                         -$0.03
                                                                         -$0.08
                                                                         -$0.08
                                                                            N/A

Fuel (pre-tax)
                                                                          $17.2
                                                                          $28.4
                                                                          $29.2
                                                                          $36.8

Benefits
                                                                          $10.3
                                                                          $15.7
                                                                          $16.0
                                                                          $19.7

Net benefits
                                                                          $25.6
                                                                          $41.0
                                                                          $42.2
                                                                            N/A

GHG reductions (MMT)
                                                                           59.1
                                                                           97.2
                                                                          100.0
                                                                          125.9
                                     2050
Vehicle program
                                                                          -$2.3
                                                                          -$3.6
                                                                          -$3.6
                                                                            N/A

Maintenance
                                                                         -$0.03
                                                                         -$0.08
                                                                         -$0.08
                                                                            N/A

Fuel (pre-tax)
                                                                          $26.1
                                                                          $44.0
                                                                          $44.0
                                                                          $54.8

Benefits
                                                                          $16.1
                                                                          $25.2
                                                                          $25.2
                                                                          $30.7

Net benefits
                                                                          $39.9
                                                                          $65.5
                                                                          $65.6
                                                                            N/A

GHG reductions (MMT)
                                                                           83.8
                                                                          140.9
                                                                          141.1
                                                                          175.7
                                    NPV, 3%
Vehicle program
                                                                         -$28.8
                                                                         -$43.7
                                                                         -$46.2
                                                                            N/A

Maintenance
                                                                         -$0.47
                                                                         -$1.19
                                                                         -$1.22
                                                                            N/A

Fuel (pre-tax)
                                                                         $231.7
                                                                         $381.5
                                                                         $394.5
                                                                         $499.5

Benefits
                                                                         $141.7
                                                                         $215.7
                                                                         $221.6
                                                                         $274.2

Net benefits
                                                                         $344.1
                                                                         $552.3
                                                                         $568.8
                                                                            N/A
                                    NPV, 7%
Vehicle program
                                                                         -$13.9
                                                                         -$20.9
                                                                         -$22.7
                                                                            N/A

Maintenance
                                                                         -$0.23
                                                                         -$0.59
                                                                         -$0.60
                                                                            N/A

Fuel (pre-tax)
                                                                          $98.1
                                                                         $160.1
                                                                         $167.5
                                                                         $213.4

Benefits
                                                                          $85.8
                                                                         $133.8
                                                                         $138.1
                                                                         $172.4

Net benefits
                                                                         $169.8
                                                                         $272.4
                                                                         $282.3
                                                                            N/A



II.  Natural Gas Vehicles and Engines
Both gasoline and diesel vehicles can be designed or modified to use natural gas.  NGV America estimates that approximately 0.5 percent of the heavy-duty vehicle fleet use natural gas.  A small but growing number of medium and heavy-duty natural gas vehicles have been produced and are in current use.  Although these natural gas versions are similar in many ways to their petroleum counterparts, there are significant differences.  There are also both similarities and differences in the production and distribution of natural gas relative to gasoline and diesel fuel.
This combined rulemaking by EPA and NHTSA is designed to regulate two separate characteristics of heavy duty vehicles:  emissions of GHGs and fuel consumption.  The use of natural gas as a heavy-duty fuel can impact both of these.  In the case of diesel or gasoline powered vehicles, there is a close relationship between these two characteristics.  For natural gas fueled vehicles, which reduce or eliminate the use of petroleum, the situation is different.  For example, a natural gas vehicle that achieves approximately the same fuel efficiency as a diesel powered vehicle would emit about 20 percent less CO2 when operating on natural gas; and a natural gas vehicle with the same fuel efficiency as a gasoline vehicle would emit about 30 percent less CO2.  In Phase 1, the agencies balanced these facts by applying the gasoline and diesel CO2 standards to natural gas engines based on the engine type of the natural gas engine.  Fuel consumption for these vehicles is then calculated according to their tailpipe CO2 emissions.  In essence, this applies a one-to-one relationship between fuel efficiency and tailpipe CO2 emissions for all vehicles, including natural gas vehicles.  The agencies determined that this approach would likely create a small balanced incentive for natural gas use.  See 76 FR 57123; see also 77 FR at 51705 (Aug. 24. 2012) and 77 FR at 51500 (Aug. 27, 2012) (EPA and NHTSA, respectively, further elaborating on basis for having Phase 1 apply at the tailpipe only, including for alternative fueled vehicles).
For Phase 2, the agencies have reevaluated the potential use of natural gas in the heavy-duty sector and the impacts of such use.  As discussed below, based on our review of the literature and external projections we believe that the use of natural gas is unlikely to become a major fuel source for medium and heavy-duty vehicles during the Phase 2 time frame.  Thus, since we project natural gas vehicles to have little impact on both overall GHG emissions and fuel consumption during the Phase 2 time frame, the agencies see no need to propose fundamental changes to the Phase 1 approach for natural gas engines and vehicles.
In the following sections, we present a lifecycle analysis of natural gas used by the heavy-duty truck sector.  We also present the results of an analysis by the Energy Information Administration projecting the future use of natural gas by heavy-duty trucks.  Finally, we list a number of potential technologies and discuss the approaches that could be pursued help to reduce the methane emissions from natural gas trucks.  A more detailed discussion of these analyses and issues can be found in the draft RIA. 
A.  Natural Gas Engine and Vehicle Technology
Several engine parameters and characteristics come into play in comparing engines powered by natural gas with engines powered by conventional fuels.  
Gasoline-fueled engines are typically spark-ignition engines that rely on stoichiometric combustion, which means that essentially all the oxygen from the engine's intake air is consumed in the combustion process.  Converting a gasoline-fueled engine to run on natural gas involves changing the hardware used to store and deliver fuel to the engine, but the combustion strategy remains largely unchanged.  The engine must be recalibrated for the different fuel properties, but combustion remains stoichiometric.  In addition, the catalysts may require significant changes to enable the heavy-duty engine to comply with the emission standards.  
Diesel-fueled engines are compression-ignition engines that rely on lean-burn combustion, which means that the engine takes in a substantial quantity of excess air (oxygen) that is not consumed in the combustion process.  Engines usually have turbochargers to compress the intake air, which allows for greater power output and thermodynamic efficiency.  Converting a diesel-fueled engine to run on natural gas may involve a minimal set of changes to engine calibrations to maintain lean-burn operation and the overall operating characteristics of a compression-ignition engine, although there would be substantial changes to the fuel storage and delivery systems.  This could require the use of a pilot injection of a small amount of diesel fuel to initiate the combustion event, or more commonly, a mixture (never more than 50 percent natural gas) of natural gas and diesel fuel is combusted.  It is also possible to convert a diesel-fueled engine to run on natural gas by adding a spark plug and changing the calibration strategy to rely on stoichiometric combustion.  This allows for simpler engine design and operation, but comes at a cost of higher fuel consumption and CO2 emissions.  
Engines running on natural gas are capable of meeting the same criteria and GHG emission standards that apply for gasoline and diesel engines.  In the case of reducing PM and CO2 emissions, there is an inherent advantage for natural gas.  In contrast, engines must be properly calibrated and maintained to avoid high emission rates for NOx, HC, and CO.
On-vehicle fuel storage for natural gas is also an important design parameter.  The most common method today is compressed natural gas (CNG), which involves storing the fuel as a gas at very high pressure (up to ~3500 psi) to increase the density of the fuel.  This increases vehicle weight and generally reduces the range relative to gasoline or diesel vehicles, but the technology is readily available and does not involve big changes for operators.  The alternative is to cool the fuel so that it can be stored as liquefied natural gas (LNG), which involves more extensive hardware changes for managing the fuel as a cryogenic liquid.  LNG fuel storage also involves a substantial weight increase, but LNG has a higher density than CNG so LNG vehicles can store much more fuel than CNG vehicles in the same volume.  LNG technology is available for a limited number of truck models, mostly for line-haul service where range is a paramount consideration.  The cryogenic fuel requires substantial changes in hardware and procedures for refueling stations and operators.  An additional factor in considering LNG technology is that a parked vehicle could vent the fuel as it takes on heat from the surrounding environment over a period of several days.  
B.  GHG Lifecycle Analysis for Natural Gas Vehicles
This section is organized into three sections.  The first section summarizes the upstream emissions.  The second section summarizes the downstream emissions.  The last section summarizes the results of the lifecycle emissions and provides a comparison between natural gas lifecycle and diesel fuel lifecycle emissions.  Only the overall results of the lifecycle emissions comparison between natural gas and diesel fuel are presented here, much more detail is provided in Chapter 13 of the DRIA. 
     (1)  Upstream Emissions
Upstream methane emissions, occurring in the natural gas production, natural gas processing, transmission, storage and distribution stages of natural gas production, are estimated and summarized in the annual EPA report Inventory of U.S. Greenhouse Gas Emissions and Sinks (GHG Inventory) for the United Nations Framework Convention on Climate Change (UNFCCC).  As a basis for estimating the life-cycle impact of natural gas use by heavy-duty trucks, we used the year 2012 methane emission estimates in the most recent GHG Inventory, published in 2014.  The GHG Inventory also includes the quantity of carbon dioxide which is coproduced with methane throughout the natural gas system and emitted to the atmosphere through venting, flaring, and as fugitive emissions.    
The GHG Inventory is updated annually to account for new emission sources (e.g., new natural gas wells), updated data, emission factors and/or methodologies, and to account for changes in emissions due to policy changes, regulatory changes and changes in industry practices.  The GHG Inventory reflects emission reductions due to existing state regulations, National Emission Standards for Hazardous Air Pollutants (NESHAP) promulgated by EPA in 1999, the New Source Performance Standards (NSPS) promulgated by EPA in 2012, and Natural Gas Star (a flexible, voluntary partnership that encourages oil and natural gas companies to adopt proven, cost-effective technologies and practices that improve operational efficiency and reduce methane emissions). 
Emission estimates in the GHG Inventory are generally bottom-up estimates which are per-unit (compressor, pneumatic valve, etc.) emission estimates based on measured or calculated emission rates from such emission sources.   
In addition to the national-level data available through the GHG Inventory, facility-level petroleum and natural gas systems data are also available through EPA's Greenhouse Gas Reporting Program (GHGRP).  These data represent a significant step forward in understanding GHG emissions from this sector and EPA expects that these data will be an important tool for the Agency and the public to analyze emissions, and understand emission trends.  For some sources, EPA has already used GHGRP data to update emission estimates in the GHG inventory, and EPA plans to continue to leverage GHGRP data to update future GHG Inventories. 
The EPA-promulgated 2012 New Source Performance Standards (NSPS) will reduce emissions of ozone precursors from natural gas facilities and have methane and hazardous air pollutant reduction co-benefits.  The NSPS standards require that natural gas wells which are hydraulically fractured control emissions using flaring or reduced emission completion (REC) technology from completions and workovers starting in 2012. RECs used by natural gas well drillers capture the natural gas emissions that occur during well completion, instead of venting or flaring the emissions.  Starting January 2015, RECs are required for natural gas well completions and workovers.  The NSPS also regulates the emissions from certain new natural gas production equipment, including dehydrator vents and condensate tanks.  In the 2013 Climate Action Plan, EPA projects future emissions of methane to increase modestly, by about 4 percent between now and 2025.  As estimated for the recent power plant proposed rulemaking, natural gas production is expected to increase by about 20 percent during this timeframe, thus, methane emissions in 2025 are expected to be 14 percent lower than in 2012 based on an equivalent volume of natural gas being produced.  As announced by the White House, EPA will further regulate methane emissions from new natural gas production facilities.[,]
In the GHG Inventory, emissions associated with powering the units or equipment (i.e., compressors, pumps) used in natural gas production, processing, transmission and distribution are aggregated with all the other fossil fuel combustion activities.  Rather than attempt to disaggregate those specific GHG emissions from the rest of the process emissions in the GHG Inventory, we instead used the estimated emissions for these sources provided by GREET.
     (2)  Downstream Emissions
Natural gas can be used by vehicles either as a compressed gas (CNG) or as liquefied natural gas (LNG).  We discuss the emissions of both below. 
  (a) Compressed Natural Gas (CNG)
The natural gas that comprises CNG is typically off-loaded from the natural gas system where the vehicles using CNG are refueled.  This is because the natural gas used as CNG is compressed at the retail stations that sell the CNG and the fleet facilities which fuel the CNG fleet vehicles.  To get the natural gas to the CNG retail facilities which are mostly located in or near urban areas, the natural gas is expected to be shipped through the distribution system downstream of the natural gas transmission system.  CNG trucks are then refueled at the retail stations providing CNG.  Each time a CNG refueling event occurs, a small amount of natural gas is released to the environment.  Because of a lack of data or an estimate by GREET or CARB, this small amount of natural gas has not been estimated and therefore are not included in the lifecycle analysis presented here.  Since these systems are designed to have no leaks, the CNG could remain stored in the CNG tanks indefinitely.  However, the very high pressure at which CNG is stored dramatically increases fugitive emissions if a fitting were to develop a leak.  The level of fugitive emissions for a certain sized hole is directly proportional to the pressure.  We do not have any data on the fugitive emissions from CNG trucks.  In our lifecycle analysis, we assume that CNG fugitive emissions are zero, which likely underestimates the methane emissions.
When CNG is stored at high pressure (i.e., 3600 psi) it contains only about 25 percent the energy density of diesel fuel.  This low fuel storage density is a disincentive for using CNG in long haul trucks.  An adsorbent for natural gas (ANG), called metal organic framework (MOF) for storing CNG, has been invented and is being tested for large scale use.  The technology involves filling the CNG tank with a specially designed substance that looks similar to a pelletized catalyst.  The substance establishes a matrix which causes the methane molecules to become better organized and store the same quantity of natural gas in a smaller volume at the same pressure (about 60 percent of the energy density of diesel fuel), or store the same density of natural gas at a lower pressure.  This MOF could improve the energy density of CNG which would make it a better candidate for natural gas storage for long range combination trucks.  Or, if used to store CNG at the same density, could reduce the compression energy required to compress the CNG since it could be stored at a lower pressure.
  (b) Liquified Natural Gas (LNG)
A primary reason for liquefying natural gas is that it allows storing the natural gas at about 60 percent of the density of diesel fuel.  For this reason, LNG is a primary fuel being considered by long haul trucks.
The first step downstream of the natural gas production, processing and distribution system for making LNG available to trucks is the liquefaction step.  This step involves the removal of heat from the natural gas until it undergoes a phase change from a gas to a liquid at a low pressure.  LNG plants are configured depending on their ultimate capacity.  World class LNG plants produce 5 million metric tons, or more, per year of LNG and the economy of scale of these large plants supports the significant addition of capital to reduce their operating costs and energy use.  An LNG plant solely producing LNG for truck fuel is expected to be significantly smaller than the world class LNG export plants with a poorer economy of scale. Their energy efficiency would be expected to be much lower on a percentage basis.  The California Air Resources Board estimates the liquefaction plants used for producing truck LNG fuel are 80 percent efficient, compared to 90 percent efficient for world class LNG plants.  In our lifecycle analysis of LNG as a truck fuel, we also assumed that LNG plants are 80 percent efficient.  The LNG producer is not only responsible for the LNG fugitive emissions at the plant, but it is also responsible for the GHG and other process emissions emitted when liquefying the natural gas.  Because LNG plants are located separate from the retail facilities, they can be located to access the lowest cost feedstock.  This means the natural gas for LNG can be sourced from the larger natural gas transmission pipelines which are upstream of the distribution pipelines.  Once the natural gas is liquefied at the liquefaction plant, it is stored in an insulated storage tank to keep the LNG liquefied.  
To transport the LNG to the retail station, the LNG is loaded into an insulated horizontal trailer designed specifically for transporting LNG.  If the LNG in the truck trailer were to warm sufficiently to cause the LNG to reach the pressure relief valve venting pressure, there would be boil-off emissions from the truck trailer.  However, since the LNG is super cooled, boil off events are likely to be rare.  We did not have access to any specific data to estimate these emissions so we used a CARB estimate of boil-off emissions for LNG transportation by the tanker truck between the LNG plant and retail outlets.
LNG is stored in an insulated storage tank at the retail facility.  Heat gain in the storage tank could eventually lead to boil-off emissions.  Service stations with little LNG demand are at a higher risk of boil-off emissions compared to service stations which have a significant throughput volume.  LNG stations could be configured to avoid boil-off events to the atmosphere, such as venting to a co-located CNG facility, or venting to a nearby natural gas pipeline.  We did not have access to any specific data to estimate these emissions so we used a CARB emission estimates for the boil-off emissions from LNG retail facilities.
Vehicles requiring LNG fuel drive up to an LNG retail outlet or fleet refueling facility and fill up with LNG fuel.  When the refueling nozzle is disconnected from the LNG tank nozzle, a small amount of methane is released to the environment.  In addition, it may be necessary prior to refueling, due to high pressure in the truck's LNG tank, to reduce the pressure in the truck's LNG tank to speed up the refueling process.  In some cases the retail station is equipped with another hose and associated piping to vent the excess gas to the retail stations' storage tank where it would usually condense back to a liquid due to the lower temperature of that tank, or perhaps be vented to a natural gas pipeline.  However, for those retail outlets without such vent lines to the storage tank, the truck driver may simply vent the truck's storage tank to the atmosphere.  As part of a sensitivity analysis for our lifecycle analysis, we estimate the emissions for venting an LNG tank prior to refueling. 
  (c) Comparing CNG to LNG  
There is an important difference in providing CNG and LNG which is important to highlight.  For making CNG available to trucks, only a single facility, the retail outlet, is required for distributing CNG, while LNG requires both a liquefaction plant and a retail outlet and a means for transporting the LNG from the liquefaction plant to retail.  Relying on a single facility simplifies the logistics of providing CNG and reduces the opportunity for methane leakage to the environment.  However, this emissions disadvantage of LNG compared to CNG is offset somewhat because LNG is expected to access the lower priced natural gas from the upstream transmission system, therefore, the methane emissions associated with the downstream natural gas distribution system are avoided.  
  (d) Vehicle Emissions
There are several different ways that diesel heavy duty engines can be configured to use natural gas as a fuel.  The first is a spark ignition natural gas (SING), Otto cycle SING heavy duty engine burns the fuel stoichiometrically and uses a three-way catalyst, and some also add an oxidation catalyst to provide the greatest emissions reduction.  In this case the engine compression ratio is reduced similar to that of a gasoline engine and thus its thermal efficiency is lower than a diesel-like engine by about 10 - 15 percent.  
The second is a direct injection natural gas (DING), diesel cycle.  The DING engine uses a small quantity of diesel fuel (pilot injection) or a glow plug as ignition sources.  As the injection system for the diesel fuel does not have the capability of greater injection quantities, this option has no dual-fuel properties.  On the other hand, an optimization of the pilot injection can be made to achieve lower emissions.  An advanced high pressure direct injection (HPDI) fuel system combining the injection of both diesel fuel and natural gas can be used for lean burn combustion.  This enables the engine to maintain the efficiency advantage of a compression ignition engine while running mainly CNG/LNG. 
The third is a mixed-fuel natural gas (MFNG), diesel cycle.  In a mixed-fuel engine, natural gas is mixed with intake air before induction to the cylinder and diesel fuel is used as ignition source.  Mixed-fuel vehicle/engine means any vehicle/engine engineered and designed to be operated on the original fuel(s), or a mixture of two or more fuels that are combusted together.  Engine results showed that the efficiency of the engine could decrease by about 2-5 percent in mixed-fuel mode compared to diesel mode and that the diesel replacement was approximately 40-60 percent.
Each of these natural gas engine types has its merits.  The SING engine is less costly, but is less fuel efficient and because of the lower compression ratio it has less torque than the two diesel cycle engines.  The DING engine is likely the most expensive because of the special natural gas/diesel fuel injection system and large required amount of natural gas (LNG or CNG) storage since the truck must run on natural gas.  However, because the truck can run almost completely on natural gas, the DING engine has the potential to more quickly pay down the higher investment cost of the natural gas truck.  The MFNG engine provides the truck owner the flexibility to operate on natural gas or diesel fuel, but at the expense of a slower natural gas investment paydown rate because it can operate at most 50 percent of the time on natural gas. 
When assessing the methane emissions from both CNG and LNG trucks, it is important to separate those trucks built or converted before 2014 to those built or converted in 2014 and later.  The trucks built before 2014 only needed to meet a nonmethane hydrocarbon (NMHC) standard, which means that the methane emissions from these trucks are unregulated.  Our certification data show that the methane tailpipe emissions from these trucks/buses ranges from 2  -  5 g/bhp-hr for both spark ignition (gasoline type) and compression ignition (diesel type) engines.  
For 2014 and later OEM compression ignition natural gas trucks or natural gas conversions of 2014 and later diesel trucks, the trucks must meet a 0.1 g/bhp-hr methane emission standard in the case of a larger truck engine tested with an engine dynamometer, and a 0.05 g/mile methane emission standard in the case of smaller trucks tested on a chassis dynamometer.  For spark ignition (gasoline style) engines, the standards take effect in 2016.  Natural gas truck manufacturers are allowed to offset methane emissions exceeding the methane emission standard by converting the methane emission exceedances into CO2 equivalent emissions and using CO2 credits.  For the initial natural gas engine certifications that EPA received for 2014, the truck manufactures chose to continue to emit high levels of methane (around 2 g/bhp-hr) and use carbon dioxide credits to offset those emissions.  We don't know if this practice of will continue in the future, however, for evaluating the lifecycle impacts of natural gas heavy-duty trucks, the 2014 and later natural gas heavy-duty trucks may in fact have an emissions profile more like the pre-2014 trucks and not like the 2014 and later trucks as depicted below in the figures.  It is worth noting that the potential exists for deterioration or malfunction of the engines, fuel supplies, or associated emission control devices on these trucks to occur in such a manner to result in higher methane emissions in actual use.  We have not specifically accounted for the potential for increased methane emissions caused from high emitter natural gas trucks.  See generally Section II above.
The crankcase of these engines receives leakage from across the piston rings, which can contain methane.  The crankcase of the spark ignition engines is normally vented into the intake of the engines, thus, any methane emissions from the crankcase which is not combusted in the engine would be accounted for in the tailpipe emissions.  For compression ignition engines, however, the crankcase emissions are allowed to be vented into the exhaust pipe downstream of the aftertreatment devices, and therefore the crankcase emissions are released to the atmosphere even though they are included in the emissions test for the Methane standard that was introduced in Phase 1 on the rule.  Another potential source of methane emissions from CNG and LNG trucks is fugitive emissions from the engine and the piping which routes the fuel to the engine.  Thus, either while parked or operated, this part of the vehicle fuel and engine systems could leak methane to the environment (which is different from boil-off emissions from LNG trucks discussed below).  We do not have data nor did we develop an estimate for these potential fugitive emissions from these types of in-use leaks.  If the natural gas vehicles are well maintained, these emissions are likely to be very low.
The thermal efficiency (the ratio of energy converted to work versus energy consumed) of the natural gas engine also plays a role in the lifecycle emissions of the truck.  Natural gas engines are generally less efficient than their gasoline and diesel counterparts.  Furthermore, manufacturers choose to produce spark-ignition stoichiometric natural gas engines for use in diesel applications.  Spark-ignition natural gas engines can be as much as 15 percent less efficient than compressed ignition engines which operate on diesel fuel.  In our lifecycle analysis, we provide two different sensitivities for natural gas vehicles assuming that they may be 5 percent and 15 percent less efficient.
An important difference between CNG and LNG is way in which the fuels are stored on the vehicle.  The CNG is contained in a sealed system while the LNG system is ultimately open to the environment.  Providing that there are no leaks in the storage system, the CNG truck is inherently low (zero) emitting and a parked truck would contain the CNG indefinitely.  An LNG truck is inherently high emitting since if the truck were to be parked long enough its entire contents would be emitted to the environment.  
Thus, a major GHG issue for LNG trucks is boil-off emissions from the truck's fuel storage systems.  When the liquefied natural gas is pumped into the truck LNG tanks, it is "supercooled," meaning that the pressure of the LNG is well below the pressure at which the natural gas vent valve would relieve the LNG pressure.  If the truck is driven extensively, the drawdown of liquid level will cause a vacuum which will cause some of the fuel to boil off and the heat of vaporization would thus cool the rest of the liquid in the LNG storage tank.  It is possible that the fuel would maintain its supercooled temperature, or possibly even cool further below its supercooled temperature, the entire time until the LNG is completely consumed.   
If the truck is not driven at all or is driven very little, the very low temperature and low pressure LNG warms due to the ambient temperature gradient through the tank wall, and vaporizes, causing the temperature and pressure of the LNG to rise.  When the pressure reaches a maximum of 230 psi a safety release valve releases the methane gas to vent excess pressure.  There are two industry standards used to design tanks to reduce the temperature increase, one for a 3 day hold time and one for a 5 day hold time.  Hold time is the time elapsed between the LNG refueling and venting.
If there is a boil-off event, a large amount of methane would be released.  If aware of the impending boil-off, such as when the truck is being maintained, the truck driver could hook up the LNG tank to a hose which would vent the natural gas emissions to a CNG system which could reuse the boil-off natural gas as CNG, or vent the natural gas emission to a natural gas pipeline.  Otherwise the boil-off emission would simply vent to the atmosphere.  If the truck had 200 gallons of LNG storage capacity, the estimated quantity of boil-off emissions would range from 3 to 9 gallons of LNG for each boil off event depending on the fill level of the LNG tank.  Each boil off event has the potential to release on the order of 5,300  -  15,800 grams of CH4 which equates to 132  -  400K grams of CO2 equivalent emissions, assuming that methane has a global warming potential (GWP) of 25 (assessed over 100 years).  If the vehicle continues to sit for five more days and boil-off events occur each day to several times per day as the tank vents and rebuilds in pressure, the sum total of the boil-off events can result in over a million grams of CO2-equivalent emissions.
     (1)  Results of Life Cycle Analysis
To estimate the lifecycle impact of natural gas used by heavy-duty trucks, we totaled the carbon dioxide, methane (CH4) and the nitrous oxide (N2O) emissions for the upstream and downstream portions of the natural gas system.  The methane and nitrous oxide emissions are converted to carbon dioxide-equivalent emissions using the appropriate GWP conversion factors.  The GWP conversion factors EPA currently uses are for a 100-year timeframe, are 25 and 298 for methane and nitrous oxide, respectively.  
To establish the impacts of natural gas use in the heavy-duty fleet, it was necessary to compare the lifecycle impacts of natural gas against the base fuel it is replacing, which is diesel fuel.  The lifecycle impact of diesel fuel was estimated by the National Energy Technology Laboratory (NETL) for the production and use of diesel fuel in 2005.  EPA used this lifecycle assessment for the 2010 Renewable Fuel Standard Rulemaking and we are using this NETL diesel fuel lifecycle estimate as the reference for comparison with the natural gas lifecycle assessment.  NETL is in the process of revising its lifecycle analysis of diesel fuel to 2009, which should be available sometime in 2015.  According to the lead analyst, the 2009 lifecycle analysis appears to be similar in magnitude to the 2005 analysis.  However, the 2009 analysis will not capture the lifecycle effects of the large increase in hydraulically fractured crude oil (i.e., Bakken, Eagle Ford) which has occurred in the U.S. during the first part of this decade.    
To illustrate the relative full lifecycle impact of natural gas-fueled heavy-duty vehicles compared to diesel fueled heavy-duty vehicles, we assessed several different scenarios.  The first is a conversion of a diesel engine to use compressed natural gas.  Of the tens of thousands of heavy-duty natural gas trucks currently in use, over 90 percent are of this type.  These are conversions of older trucks so they are not regulated by the 2014 methane standard.  For future year heavy-duty trucks, we also estimated the lifecycle emissions if the trucks were meeting a 0.1 g/bhp-hr or a 0.05 g/mile methane tailpipe standard.  We provide two sensitivities to capture the lower thermal efficiencies of natural gas trucks:  5 percent less thermally efficient (thermal low) and 15 percent less energy efficient (thermal high, which is 10 percent worse thermal efficiency than the 5 percent less thermally efficient case).  The relative life cycle assessment is shown in Figure XI-1.
                                       
Figure XI-1 Full Lifecycle Analysis (except tailpipe only emissions) of a CNG Truck 
(Projected Upstream Methane Emissions in 2025, methane GWP of 25)
The first two bars of Figure XI-1 show that based solely on CO2 tailpipe emissions (with and without thermal efficiency adjustments and assuming no increased methane emissions at the truck), CNG trucks are estimated to emit about 20 percent less GHG emissions than diesel engines.  But this advantage decreases if the natural gas engine is less thermally efficient.  The three full lifecycle analyses represented by the right three bars in the figure show that pre-2014 CNG trucks are estimated to emit less GHG emissions as diesel trucks, although if their thermal efficiency is much lower (15 percent less than the diesel fueled engine) they could emit about the same GHG emissions.  When such trucks are complying with the 2014 and later methane emission standards, their methane emissions are much lower and these trucks are expected to be lower emitting than diesels, even if they are less thermally efficient. 
The second scenario presented in Figure X1-2 is a combination LNG truck which in one case is assumed to be emitting methane at pre-2014 emission standards and in another case is assumed to comply with the 2014 methane standard.  It is an OEM natural gas truck with a high pressure direct injection engine, and because of the extensive mileage, the truck most realistically would use LNG as a fuel to provide the necessary range for the dedicated natural gas engine.  We make two different assumptions with respect to refueling and boil off emissions.  In the LNG average case, we assume a modest quantity of refueling and boil-off methane emissions which is estimated by GREET.  The second boil-off emission estimate (assumed to be complying with the 2014 methane emission standard) is based on venting the LNG storage tank to the atmosphere each time the driver refills his tank, and one LNG boil-off event between each time the driver must refuel his tank.  As discussed above, we do not expect such high refueling and boil-off emissions to be common practices for newer trucks that are operated regularly.  However, as the use of these trucks decreases as they age and are sold into the secondary market, the risk for refueling and boil-off emission events increases  -  this estimate provides a simple sensitivity emission estimate.  The lifecycle assessment is shown in Figure XI-2.
                                       
Figure XI-2 Full Life Cycle Analysis (except tailpipe only emissions) of an LNG Truck 
(Projected Upstream Methane Emissions in 2025, Low and High Refueling and Boil-Off Emissions, 
Methane GWP of 25)
Figure XI-2 shows that LNG trucks have about the same greenhouse gas footprint as diesel trucks providing that they are complying with the methane emission standard and when we assume a low quantity of refueling and boil-off emissions.  In comparing CNG to LNG, the LNG trucks appear higher emitting than CNG trucks because of the low thermal efficiency of the small liquefaction facilities.  If these LNG trucks emit high levels of methane when refueling and by experiencing boil-off events or if they emit methane at pre-2014 emission standard levels, their GHG emissions can potentially be much greater than that from diesel trucks.
It is important to point out the uncertainties associated with the lifecycle estimates provided in the above figures.  As discussed above, there is uncertainty in both the upstream and downstream methane emission estimates for natural gas facilities and equipment, and the trucks that consume natural gas.  There is also uncertainty in the diesel fuel lifecycle analysis conducted by NETL.  As new information becomes available, we can update our lifecycle emission estimates which would reduce the uncertainty of this analysis.  A number of studies are being conducted to quantify the methane emissions (upstream and downstream) and life cycle impacts of natural gas by the Environmental Defense Fund (EDF).  The final reports for these studies have not yet been released but we will review them once they are available.  Finally, the lifecycle analysis is sensitive to the GWP factor used to assess methane and nitrous oxide, and if a different GWP value were to be used, it would affect the relative lifecycle impact of natural gas relative to diesel in heavy-duty trucks (see Chapter 13 of the draft RIA for sensitivity analyses regarding upstream methane emissions and the use of different GWP factors).
We compared our lifecycle emission estimates for natural gas, relative to diesel fuel, with the estimates provided by the California Air Resources Board (CARB) for its Low Carbon Fuel Standard (LCFS).  For our emissions estimate used in the comparison we used the carbon dioxide-equivalent (CO2eq) emissions estimated for 2014 and later engines, which must comply with a methane tailpipe emissions standard, and assumed that the engine was 5 percent less thermally efficient than a comparable diesel engine.  For the CARB emissions estimates, we used the estimates made for illustrative purposes using the 2013 version of the CARB GREET model as published in August, 2014.  CARB estimates that CNG engines emit 76 percent of the CO2eq emissions as a diesel truck, while our analysis estimates that CNG engines emit 81 percent of the CO2eq emissions as a diesel truck.  The most likely explanation for CARB's lower estimated CO2eq emissions for CNG engines is that a much larger portion of the electricity used to compress natural gas is renewable in California than the rest of the country.  CARB estimates LNG engines emit 94.5 percent of the CO2eq emissions as a diesel truck while our analysis estimates LNG trucks emit 96 percent of the CO2eq emissions as a diesel truck.  CARB assumes no boil-off or venting emissions for LNG trucks and for this comparison, we used our more modest boil-off and venting assumption, as described above, which is close to CARB's.  Overall, our estimates are very similar to those estimated by CARB and when there are differences, the differences are as expected.
A UC Davis report recently released estimated that CNG and LNG trucks using spark ignition engines (SING) emit about the same amount of CO2-equivalent emissions, and these emissions are slightly higher than that of diesel engines.  The HPDI engines (DING) fueled by LNG are estimated to be the lowest emitting of the several scenarios analyzed by the study.  Because the study did not discuss vehicle boil-off emissions, it is likely that the study either assumed that these emissions are zero or assumed the default vehicle boil-off emission estimates made by GREET.  It is likely that the study assumed that the liquefaction plants are 90 percent efficient as this is the default assumption in GREET, which leads to lower GHG emissions by LNG trucks.
C.  Projected Use of LNG and CNG
We reviewed several sources to estimate how much natural gas is currently being used and is projected to be used by heavy-duty trucks.  Projections for this emerging technology range from 7 percent of new heavy-duty vehicle sales to over 40 percent by 2040.  Large uncertainties exist even since the 2014 NAS First Report was written.  Among the range of projections we assessed, that produced by the Energy Information Administration (EIA) seemed the most credible for capturing recent trends, and for projecting future natural gas use by heavy-duty trucks.  There are several factors that support this assessment.  
First, in its 2014 Annual Energy Outlook, EIA estimates that natural gas fueled 0.4 percent of the energy use of heavy-duty trucks in 2014.  This estimate is consistent with the fraction of the heavy-duty fleet which is fueled by natural gas as estimated by the industry.  Conversely, other studies referenced by the NAS report assume that current use is already about 2 percent (the DRIA contains more discussion about these other projections). 
Second, the EIA projection is based on an economic analysis which considers the increased cost of manufacturing a natural gas truck over a diesel truck, the fuel savings for using natural gas instead of diesel fuel, and whether the payback time of the fuel savings against the increased truck cost would result in purchases of natural gas trucks.  As part of this analysis, EIA assumes that lighter heavy-duty trucks would use CNG, which is a lower cost technology suited for the shorter driving distances for these trucks.  The long haul trucks, however, require larger on-board stores of fuel to extend the driving range which is satisfied by storing the natural gas as a liquid.  LNG has about 60 percent of the energy density of diesel fuel, compared to CNG which has only 25 percent of the energy density of diesel fuel.  To satisfy the long driving range of the long haul trucks, EIA assumed that they would use LNG as a fuel.  The assumptions used by EIA for conducting its economic analysis all seem reasonable. 
Third, EIA is one of the several organizations in the world which collects fuel pricing data and projects future fuel prices using a sophisticated modeling platform.  One of the most important assumptions in projecting the future use of natural gas in the transportation sector is the relative price of natural gas to the price of diesel fuel.  In 2014, the natural gas price purchased by industrial users was about $6 per million BTU.  The price of crude oil has been volatile during 2014 as the Brent crude oil price started at about $110 per barrel, but decreased to under $50 per barrel.  From EIA's website, the average retail diesel fuel price in the first part of 2014 was about $3.80 cents per gallon.  When comparing the natural gas spot market price on a diesel equivalent basis to the diesel fuel price, it appears that natural gas is priced about one quarter of the diesel fuel price.  However, if used as compressed natural gas, the natural gas must be distributed through smaller distribution pipeline system that exists in cities, which increases the price of the natural gas.  Then the natural gas must be compressed and stored at a retail outlet, and then dispensed to CNG trucks.  The estimated retail price of CNG is $2.35 on a diesel gallon equivalent (DGE) basis, or about $1.45 DGE less than diesel fuel.  LNG plants are assumed to be located close to large transmission pipelines away from cities, thus, it is sourced from lower cost natural gas.  However, for producing LNG, the natural gas must be liquefied, shipped to retail outlets, stored and then dispensed to LNG trucks.  These steps add substantially to the price of the LNG and the estimated retail price of LNG is $2.65 DGE, or $1.15 DGE less than diesel fuel.
In its 2014 AEO projections, EIA estimates that crude oil prices in the upcoming years will decline modestly until after 2020 when they start increasing until they reach $140/bbl in 2040.  Natural gas prices are expected to only slightly increase over this period.  
Fifth, the assumptions regarding payback used by EIA seemed reasonable.  EIA projects that natural gas trucks begin to be purchased when the payback times are 4 years or less based on a survey conducted by the American Trucking Association.  This is consistent with conversations the agencies have had with some fleet owners.  Since EIA does not report the payback times as an output of its projections, it is useful to understand payback times.  The 2014 NAS Phase 2 First Report cites the payback for the extra cost of natural gas trucks as 2 years, but other sources report a longer return closer to 4 years.  
EPA assessed the time required for the lower fuel cost of CNG and LNG to payback the incremental truck cost of using LNG and CNG.  The CNG tank plus fuel weighs on the order of four times as much as the diesel counterpart, and typically adds $40,000 - $50,000 to the cost of a heavy-duty truck.  In 2014, we estimated the payback time to be over 5 years when we assessed the payback at the higher crude oil prices at the beginning of the year.  The payback rates would be even higher if we would have assessed the payback rates at the end of the year when the crude oil prices were much lower.  However, for many fleets, even the payback rates at the higher crude oil prices would not be sufficiently attractive, and generally explains the low penetration of natural gas in the heavy-duty sector today.  It appears that when the payoff time is longer than 4 years, few fleets are interested in purchasing natural gas trucks without subsidies to compensate for the higher purchase price of natural gas trucks.  According to EIA, half the natural gas consumption by cars and trucks is in California, a state that subsidizes the purchase price of natural gas vehicles, and also subsidizes the cost of natural gas dispensing stations.  The Low Carbon Fuel Standard in place in California also incentivizes natural gas use because natural gas is considered to cause less of an impact on the climate than petroleum-based gasoline and diesel fuel.  The majority of the other half of the NG fleet resides in states which subsidize the cost of using natural gas by motor vehicles. 
Based on the EIA projections for crude oil and natural gas prices, the payoff time of LNG trucks is expected to remain long (more than 5 years) until sometime after 2020 when crude oil prices are projected to begin increasing.  Thus, natural gas use by heavy-duty trucks is not projected by EIA to increase above 1 percent of the heavy-duty fuel demand until after 2025.
If the apparent payback time for CNG and LNG trucks use is favorable to fleet owners, fuel availability could still slow the transition to CNG and LNG.  This is because CNG and LNG availability at service stations is currently 1 percent or less of the availability of gasoline and diesel fuel and therefore not available for most fleets.  LNG availability is particularly challenging because in addition to an LNG service station, a LNG liquefaction plant would be needed as well.  
To the extent that natural gas displaces diesel fuel and impacts truck greenhouse gas emissions, either positive or negative, there would be little impact on overall greenhouse gas emissions because of the low natural gas truck sales that are expected to occur over the next decade.  The low natural gas use by the heavy-duty sector during the Phase 2 timeframe will give us time to learn more about both upstream and downstream methane emissions to gain a better understanding of the lifecycle impacts of natural gas use by heavy-duty trucks.  It will allow us more time to consider the best additional steps to take to further reduce upstream and downstream methane emissions to improve the lifecycle impacts of natural gas use by heavy-duty trucks should the heavy duty truck fleet begin consuming natural gas in much larger quantities. 
D.  Natural Gas Emission Control Measures
As interest in the potential use of natural gas as a heavy-duty fuel has increased, industry has begun to investigate how to improve the overall emission performance of natural gas vehicles, especially with respect to reducing methane leaks.  EPA is proposing two control measures which are discussed in Section XI. There are additional items discussed in Section XI. D. (2) on which we request comment. Included in this list are several control options.
     (1)  Proposed Control Measures
As is discussed earlier in this preamble in Sections II and XIII. EPA is proposing some control measures to reduce potential methane emissions from natural gas vehicles.  These are summarized here.  Note that since these controls are being proposed to address GHG emissions rather than fuel consumption, NHTSA is not proposing equivalent requirements. 
  (a) Proposed Closed Crankcase Requirement for NG Fueled Engines and Vehicles
EPA is proposing to require that all natural gas engines have closed crankcases, rather than continuing the provision that allows compression-ignition engines to separately measure and account for crankcase emissions that are vented to the atmosphere.  This allowance has historically been in place to account for the technical limitations related to recirculating crankcase gases with high PM emissions back into the engine's air intake.  Natural gas engines have inherently low PM emissions, so there is no technological limitation that would prevent manufacturers from closing the crankcase and recirculating all crankcase gases into the engine's air intake.  The methane standard that was introduced in Phase 1 of this rule accounts for crankcase emissions, but when the system is sealed and emissions are routed to the engine intake, those emissions will be considered in determining the deterioration factor.  See the Preamble Section II. D. for a description of the proposed closed crankcase requirement for natural gas fueled engines.  This requirement would apply to the manufacturer responsible for criteria emission compliance: the vehicle manufacturer for complete pickups and vans, and the engine manufacturers for all other vehicles.
  (b) Proposal to Require 5 Day Hold Time for LNG vehicles
Boil-off emissions from LNG vehicles were not addressed in the Phase 1 rulemaking. As more testing has been done in this area since that time for this rising issue, a minimal requirement EPA is proposing as described in the Preamble Section XII to require manufacturers to follow current industry recommended practice, SAE J2343 for five day hold time to limit boil-off emissions from LNG vehicles. The specifications of this safety related standard has an effect which helps new LNG vehicles prevent boil-off.  This SAE standard will only affect new LNG vehicles. It will not address aging vehicles as their insulating properties diminish such as loosing vacuum over time and may eventually result in much shorter hold times. 
     (1)  Additional Natural Gas Topics for Comment
In this section we request comment on several additional areas related to potential regulatory requirements for natural gas fueled vehicles.  See Appendix B of Draft RIA for additional details on these topics.
  (c) Request for Comment on Changing Global Warming Potential Values in the Credit Program for CH4 
The phase 1 heavy-duty vehicle rulemaking establishing greenhouse gas emission standards included a compliance alternative allowing  heavy-duty manufacturers and conversion companies to comply with the respective methane or nitrous oxide standards by means of over-complying with CO2 standards (40 CFR 85.525 (ii)).  The heavy-duty rules allow averaging only between vehicles or engines of the same designated type (referred to as an "averaging set" in the rules).  Specifically, the phase 1 heavy-duty rulemaking added a CO2 credits program which allowed heavy-duty manufacturers to average and bank pollutant emissions to comply with the methane and nitrous oxide requirements after adjusting the CO2 emission credits based on the relative GHG equivalents.  To establish the GHG equivalents used by the CO2 credits program, the phase 1 heavy-duty vehicle rulemaking incorporated the IPCC Fourth Assessment Report global warming potential (GWP) values of 25 for CH4 and 298 for N2O, which are assessed over a 100 year lifetime.

Since the Phase 1 rule was finalized, a new IPCC report has been released (the Fifth Assessment Report), with new GWP estimates.  This is prompting us to look again at the relative CO2 equivalency of methane and to seek comment on whether the methane GWP used to establish the GHG equivalency value for the CO2 Credit program should be updated to those established by IPCC in its Fifth Assessment Report.  The Fifth Assessment Report provides four 100 year GWPs for methane ranging from 28 to 36.  Therefore, we not only request comment on whether to update the GWP for methane to that of the Fifth Assessment Report, but also on which value to use from this report.  
  (d) Request for Comment on Appropriate Deterioration Factors for NG Tailpipe Emissions
The current assigned deterioration factors for CO2, N2O, and CH4 are based on diesel technology.  While EPA still believes this is likely appropriate, we would welcome data to support this policy or other comments on how appropriate these factors are applied to NG engines and vehicles. 
  (e) Request for Comment on LNG Vehicle Boil-Off Warning System
        A simple means to help limit boil-off emissions would be to require that natural gas truck drivers be alerted to expected near-future boil-off events.  Such an alert could be in the form of a warning light and associated audible alarm that would indicate that the LNG storage tank is approaching a pressure which would require the tank to vent.  Knowing this, the truck driver could take action to prevent such a release, such as starting to drive the vehicle, which likely would reduce the pressure in the tank, or connecting the vent line to either a LNG storage tank or natural gas pipeline for venting.  The agencies request comment on the feasibility and appropriateness of a regulatory requirement that LNG fueled vehicles include a warning system that would notify the driver of a pending boil-off event as one means reduce the frequency of such events and thus limit the release of methane emissions.  
  (f) Request for Comment on Extending the 5 Day Hold Time for LNG Vehicles
The specifications of the proposed 5 Day Hold Time SAE 2343 safety related standard will only affect new LNG vehicles to prevent boil-off initially and does not address aging vehicles as their insulating properties diminish such as loosing vacuum over time that may eventually result in much shorter hold times. LNG tank manufacturers are further developing their technologies for improvement of hold times and reducing boil-off from LNG storage tanks on trucks.  These improvements can be incorporated by requiring longer hold times.  EPA is taking comments on the ability of these emerging technologies to address an extension of 5 days to a longer period of time such as 10 days and the ability to achieve the hold times for the duration of the vehicle's useful life.
  (g) Capturing and/or Converting Methane Refueling or Boil-off Emissions
We would like input on how effective and feasible the following potential emissions control technologies are for achieving longer hold times in LNG vehicles. 
A methane canister using adsorbents such as ANG (adsorbed natural gas) could be added to capture the methane which otherwise would be released to the environment during a refueling or boil-off event.  Once captured, steps could be taken to route the methane to the engine intake once the vehicle is operating again, or to take steps to converting the methane to less GHG-potent CO2.  
Instead of discharging methane to the environment, the methane potentially could be burned to CO2 using a burner.  Another potential option would be to convert the methane capture in a canister to CO2 over a catalyst. 
  (h) Request for Comment on Reducing Refueling Emissions
When refueling a natural gas vehicle, methane is vented to the atmosphere. As of Tier 3 it is required by EPA to use the ANSI-NGV1-206 standard practice to meet the evaporative emissions refueling requirement.  Small puffs of up to 200 cc/hr (which equates to 72 grams of methane per hour) of leakage are allowed with these tests. Often there is a vent line which carries these puffs away from the nozzle interface for safety reasons but is then vented to the atmosphere.  EPA is requesting comment on ways to eliminate or reduce these losses.  If there must be allowances for losses, then how can this methane gas be captured during refueling using systems that route methane emissions back to the fuel storage tank, whether it is a CNG tank, a CNG pipeline or re-liquefying system for LNG.  For LNG, in addition to the boil-off issue is the recurrence of manual venting at refueling by truck operators. Under high pressure circumstances, such as when the vehicle has been sitting for some time period in warmer temperatures, it is necessary to decrease the pressure in the fuel tank before new fuel can enter the tank.  The recommended practice is to transfer the extra vaporized fuel to the gas station or natural gas pipeline, but this can take extra time. In some areas it has turned into common practice to just vent to the atmosphere to keep the down time at the refueling station to a minimum.  In other areas there is an incentive to reroute the gas into the station storage tank or natural gas pipeline with credit towards the fuel purchase.  EPA is requesting comment on approaches to reduce refueling emissions for LNG vehicles.
  (i) On-board Monitoring Requirements for Boil-Off Events and Venting at Refueling 
Onboard diagnostics for engines used in vehicle applications greater than 14,000 lbs GVWR are already required to detect and provide a warning for when methane leaks occur due to wear of connections and components of the CNG or LNG fuel system (74 FR 8310 February 24, 2009).  We are requesting comments on requiring on-board monitoring to track boil-off events as well as whether the excess vapors were properly vented to the station storage tanks or NG pipeline, or whether the gaseous methane emissions were vented to atmosphere during refueling events.  Each boil off event has the potential to release on the order of 5,300  -  15,800 grams of CH4 which translates to 132K  -  400K grams CO2 equivalent with a GWP of 25 for 100 years.
  (j) Separate Standards for Natural Gas Vehicles
As described above, the climate impact of leaks and other methane emissions that occur upstream of the vehicle can potentially be large enough to more than offset the CO2 benefit of natural gas vehicles as measured at the vehicle tailpipe.  EPA is considering separate action to control these upstream emissions.  Nevertheless, we have some concern that the impact of upstream emissions for natural gas much higher than for gasoline or diesel fuel because of the high Global Warming Potential (GWP) for methane that makes even small leaks of natural gas of concern.  In this way, natural gas is very different than other alternative fuels.  
While we are not proposing any provisions to address this, we may consider adopting such provisions in the final rule and are asking for comments on this topic.  Would it be appropriate to adjust the tailpipe GHG emission standard for natural gas vehicles by a factor to reflect the life cycle emissions of natural gas vehicles relative to diesel vehicles?  For example, if we were to determine that the life-cycle climate impacts of natural gas vehicles were 150 percent of the tailpipe GHG emissions, while the life-cycle climate impacts of diesel vehicles were 135 percent of the tailpipe GHG emissions, we could approximate the relative climate impacts by setting the natural gas tailpipe emission standard 10 percent lower than the diesel tailpipe standard.  We recognize that there is significant uncertainty is assessing these relative climate impacts, and that they could change as new production methods and/or regulations go into effect.  Thus commenters supporting making such an adjustment are encouraged to address this uncertainty.  Commenters are also encouraged to address how such an adjustment for GHG emissions would impact the closely coordinated EPA and NHTSA heavy-duty Phase 2 program including how a potential adjustment for upstream methane emissions for natural gas fueled vehicles would impact the coordination of EPA GHG regulations with the NHTSA fuel consumption regulations.
E.  Dimethyl Ether
Although NAS (2014) focused its recommendations on natural gas, it also discussed dimethyl ether (DME), which is a potential heavy-duty truck fuel sourced from natural gas.  Dimethyl ether has a high cetane number (more than 55), although its energy density is about 60 percent of that of diesel fuel.  Dimethyl ether is a volatile fuel, like liquid petroleum gas, that can be stored as a liquid at normal ambient temperatures under moderate pressure.  Typical DME fuel tanks would be designed to prevent any significant evaporative emissions.
A DME fueled truck is only modestly more expensive than a diesel fuel truck.  The fuel tank is more expensive than a diesel fuel tank, but much less expensive than an LNG tank since it does not need to be heavily insulated.  The engine modifications to enable using DME are also modest.  Because DME does not have carbon-carbon bonds that form particulate matter particles during combustion, the particulate filter, which is standard equipment on new diesel trucks, can be eliminated.  This offsets some of the engine and fuel tank costs.
Although DME is sourced from cheap natural gas, the conversion of natural gas to DME and moving the fuel to retail outlets greatly increases the cost of the fuel.  DME is more expensive than LNG, but still lower in cost than diesel fuel based on the fuel prices in early 2014.  DME is estimated to cost $3.50/ DGE, or $0.30 DGE less than diesel fuel.  
Because there is very little DME use in the U.S. (there is only a very small fleet of trucks in California), we did not conduct a lifecycle assessment of DME, but note here a few aspects of a lifecycle analysis for DME.  First, since DME is sourced from natural gas, the upstream methane emissions from the natural gas industry would still be allocated to DME.  Second, there are not venting issues associated with DME as with LNG or CNG refueling.  Third, DME itself has a much lower global warming potential than methane.  DME's global warming potential is estimated to be 0.3 when assessed over a 100 year lifetime, which is about 1 percent of methane's GWP.


III.  Agencies' Response to Recommendations from the National Academy of Sciences
A.  Overview
As part of the Phase 1 standards, the agencies were informed by a report generated by the National Academy of Sciences (NAS), as required by Congress in EISA.  In addition to that initial report, Section 107 of EISA requires that the report be updated in five year intervals through 2025.  On September 24, 2016, NAS will release its updated report under Congress' quinquennial update requirement.  However, because the Phase 2 rule will be completed prior to the issuance of the first update, NAS issued an interim report in the form of a First Report (NAS HD Phase 2 First Report) published on April 3, 2014.  The agencies have consulted the report and considered its findings in creating this proposal.  The National Research Council formed the Committee on Technologies and Approaches for Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles, Phase Two (the Committee or NAS Committee) in order to prepare the NAS HD Phase 2 First Report.  In its Phase 2 First Report, the Committee seeks to advise NHTSA on the HD Phase 2 rule while meeting the agencies' objectives of: 
   * Reducing in-use emissions of carbon dioxide from medium- and heavy-duty vehicles
   * Reducing in-use emissions of other GHGs from medium- and heavy-duty vehicles
   * Improving the in-use efficiency of fuel use in medium- and heavy-duty vehicles -- by driving innovation, advancement, adoption, and in-use balance of technology through regulation
In providing the First Report recommendations, the committee acknowledged the following constraints:
   * Holding life-cycle cost of technology change or technology addition to an acceptable level
   * Holding capital cost of acquiring required new technology to an acceptable level
   * Acknowledging the importance of employing a balance of energy resources that offers national security
   * Avoiding near-term, precipitous regulatory changes that are disruptive to commercial planning
   * Ensuring that the vehicles offered for sale remain suited to their intended purposes and meet user requirements
   * Ensuring that the process used to demonstrate compliance is accurate, efficient, and not excessively burdensome
   * Not eroding control of criteria pollutants or unregulated species that may have health effects
Although the Phase 2 First Report was developed and written in terms of reducing fuel consumption, its findings and recommendations in general apply equally to a program that reduces GHG emissions, given the close relationship between the two.

B.    Major Findings and Recommendations of the NAS Phase 2 First Report
While the agencies have addressed many NAS recommendations as they pertain to individual areas of the Phase 2 standards, this section consolidates all of the recommendations from the NAS HD Phase 2 First Report and discusses the extent to which the agencies' proposed program is consistent with them.  The NAS HD Phase 2 First Report contains more than 40 recommendations to the agencies.  All of the Committee's recommendations have been considered, and many of them have been incorporated in the Phase 2 standards.  In some instances, the agencies have chosen a different course from the one charted by the NAS Committee's recommendations.   
Instead of discussing the NAS report findings and recommendations in the order presented in the Phase 2 First Report itself, this section divides the NAS findings and recommendations in three categories: findings and recommendations with which (1) the Phase 2 standards are consistent; (2) the Phase 2 Standards are significantly inconsistent; and (3) the Phase 2 standards are less-significantly inconsistent.  
     (1)  NAS Findings and Recommendations with which Phase 2 Standards Are Consistent
  (a) How Should the Agencies Address Standards for Trailers in the Phase 2 Rulemaking?
Given the exclusion of trailers from the Phase 1 standards, the Committee focused on a wide array of opportunities by which the agencies could reduce fuel consumption and GHG emissions.  The Committee evaluated potential fuel consumption- and GHG-reducing technologies that can be incorporated on a trailer as well as components of a trailer, such as tire-related technologies.  
The Committee found that many opportunities exist for trailers to reduce fuel consumption and GHG emissions of the pulling tractor.  More specifically, the Committee evaluated trailer aerodynamics, tire rolling resistance, and tire pressure monitoring systems.  
Despite the fuel consumption- and GHG-reducing possibilities of the trailer technologies the Committee evaluated, a survey it conducted found that only 40 percent of new van trailers came equipped with fuel-saving aerodynamic devices.  Further, the Committee found that most trailer devices on average, within one year, saved enough in fuel cost to pay for the added cost of the device.  The Committee observed that when a trailer is not owned by the tractor operator, there is no incentive for the trailer owner to purchase fuel-saving devices.  Moreover, the Committee stated that in absence of regulation, many trailer owners do not choose to employ fuel saving devices.  
The Committee recommended that NHTSA, in coordination with EPA, adopt a regulation requiring that all 53 foot and longer dry van and refrigerated van trailers meet performance standards that reduce fuel consumption and GHG emissions.  It also recommended that NHTSA assess the benefit of using GEM to address all tractors in combination with trailers.  The Committee also recommended the agencies collect real-world data on fleet use of aerodynamic trailers to help inform standards.
As discussed in more detail in Section IV, the agencies are proposing to adopt Phase 2 standards for all new dry van and refrigerated van trailers, including both those above and below 53 feet in length.  The agencies have carefully evaluated the lead time for implementation of this potential program to take into consideration factors such as existing market conditions and the fact that a regulation of new trailers will include companies that have not previously been regulated for fuel consumption and GHG emissions.  To the degree that it is available, the agencies are gathering data on real world fleet use of aerodynamic devices, both to understand the overall context of the rule and for specific analytical purposes such as the appropriate role of aerodynamic devices on the reference trailer used for tractor aerodynamic assessment.  The agencies have also assessed the benefit of using GEM to address all tractors in combination with trailers and are proposing that, for the long-term program, GEM be used to demonstrate compliance with both the tractor and the trailer requirements of the Phase 2 program.
In addition to the Committee's recommendation that NHTSA and EPA regulate 53 foot and longer box trailers, the Committee recommended that NHTSA and EPA assess the practicability and cost-effectiveness of including pups, flat-beds, and container chassis.  The Committee found that pups, flat-beds, and container chassis demonstrated fuel savings, however, factors such as average speed, mileage, and practical concerns such as access to equipment underneath the trailer needed to be assessed.  
The agencies have evaluated whether it would be practical and cost effective to include pups (in tandem or separately), other box trailers of lengths between that of pups and standard 53-foot trailers, flatbeds, container chassis (with and without containers attached), tankers, and other trailer types in the Phase 2 regulation.  As a result of this analysis, the agencies are proposing to include pups as well as box vans between 28 feet and 53 feet long in Phase 2.  With regard to other types of trailers, such as tankers, flatbeds, and container chassis, the agencies have evaluated issues such as trailer plumbing, flat bed ground clearance, chassis stacking, trailer duty cycles, cost of technologies, and other issues.  The agencies are proposing that these and other non-box trailers be included in Phase 2 requirements.  However the agencies are assuming compliance with the Phase 2 program for these non-box trailers will be limited to tire technologies.    
Finally, the Committee examined the use of GEM for tractor and trailer compliance.  It asserted that tractors and trailers are fundamentally inseparable when addressing aerodynamic drag and design.  As applied to GEM simulation, the Committee opined that considering tractors and trailers separately for simulation purposes might prove counterproductive, because components on a tractor and trailer might compromise aerodynamic optimization.  The Committee recommended that NHTSA assess the benefit of using GEM to address all tractors in combination with trailers. 
As stated above, the agencies have assessed the benefit of using GEM to address all tractors in combination with trailers and are proposing to use GEM for both tractors and trailers for the Phase 2 program for tractors and trailers, similar to what was done in Phase 1.  In Phase 1, which did not regulate trailers, this meant simulating each tractor being certified as being used in combination with a standard reference trailer.  For this rule, we are proposing to simulate each trailer being certified as being used in combination with a standard reference tractor.    
  (b) Have the Agencies Revisited Dieselization of Class 2b Through 7 Vehicles?  
The Committee reiterated a recommendation from its Phase 1 report regarding the study of dieselization of Class 2b through 7 vehicles.  The Committee stated that diesel engines present an opportunity for incremental fuel efficiency gains.  The NAS Committee recommended that NHTSA conduct a study of Class 2b to 7 vehicles to consider the incremental fuel consumption reduction of diesels, the price of diesel versus gasoline, and the diesel advantage in durability.
As part of the Phase 2 NPRM analysis, the agencies evaluated many potential fuel efficiency and greenhouse gas reduction (FE/GHG) technologies for both gasoline and diesel fueled vehicles.  As will be discussed in detail in later responses, NHTSA sponsored research at Southwest Research Institute (SwRI) included simulations of baseline and projected Phase 2 FE/GHG technologies for Class 2b through 7 vehicles over a range of appropriate duty cycles. A HD pickup truck (Class 2b), the Dodge Ram 2500, was modeled using a 385-hp 6.7-liter diesel engine as the baseline.  The vehicle's baseline performance and the effectiveness of FE/GHG technologies with the diesel engine were compared over identical duty cycles to two gasoline engines, a 6.2-liter naturally aspirated gasoline V-8 and 3.5-liter turbocharged direct injection V-6, with their corresponding engine technologies. Similarly, two medium-duty trucks (Class 6), the Ford F-650 and Kenworth T-270, were modeled using a 300-hp 6.7-liter diesel engine as the baseline and compared to the two aforementioned medium-duty V-8 and V-6 gasoline engines. 
Many of the diesel engine technologies evaluated in supporting Phase 2 research are currently available, proven, and on the path to increased penetration across the fleet.  Other technologies are still in development and looking for the opportunity to enter the mainstream production lifecycle.  For the latter, the agencies believe, as informed through the NPRM development research, that costs, reliability, durability, and clear user benefits are important when determining potential future technology applications to achieve attainable standards resulting in real-world reductions.  As identified in the proposal, the agencies considered these important factors when developing the proposed standards and, included in the analysis, are technologies that recognize the value of the current and future fleet dieselization.
However, the agencies recognize that there are valid reasons for why medium and heavy-duty vehicle purchasers sometimes choose gasoline engines over diesels.  Gasoline engines are generally lighter and less expensive than diesels, although they typically do not last as long in heavy-service.  For applications in which the vehicle is not expected to travel many miles each year, gasoline engines may be the best choice.  On the other hand, for applications in which the vehicle is expected to travel many miles each year, diesels can be a more appropriate choice.
  (c) What Kind of Analyses are the Agencies Doing on Upstream Emissions Related to Natural Gas?
The NAS Committee discussed the potential natural gas presents for reducing fuel consumption and GHG emissions in medium- and heavy-duty vehicles.  The Committee stated that while tailpipe emissions are often the most observable instance of fuel consumption and tailpipe emissions, the fuel production, distribution, and processing components of obtaining natural gas for use in vehicles also factors into any calculation of overall benefits derived from natural gas vehicles.  The Committee recommended that NHTSA, in coordination with EPA, begin to consider the well-to-wheel, life-cycle energy consumption and greenhouse emissions associated with different vehicle and energy technologies to ensure future rulemakings best accomplish their overall goals.
The agencies recognize that understanding the life-cycle implications of vehicle and energy technologies is important to ensure that the rulemaking accomplishes its overall goals.  In the Draft and Final Environmental Impact Statement (EIS) prepared for the 2017 and Later Model Year Light-Duty Vehicle GHG Emissions and CAFE Standards rulemaking, NHTSA introduced a literature synthesis of life-cycle environmental impacts of certain vehicle materials and technologies.  Consistent with that approach, in the Draft EIS for Phase 2, NHTSA has again provided a literature synthesis of life-cycle environmental impacts, focusing on the unique vehicle technologies for the HD sector and incorporating by reference the literature synthesis prepared for the MY 2017 and beyond CAFE Final EIS.  The Draft EIS also uses the GREET fuel-cycle model to assess upstream emissions from extraction, refining, and transportation of medium- and heavy-duty vehicle fuels.  This information in the Draft EIS informs both the agency and the public about the potential life-cycle implications of the various technologies under consideration in this rulemaking.  NHTSA invites comments on the Draft EIS and its literature synthesis of life-cycle environmental impacts.
EPA has also evaluated the lifecycle impact of heavy-duty trucks being fueled with natural gas in comparison to other heavy-duty trucks.  This analysis is presented in Section XI along with a discussion of projections for future use of natural gas by heavy-duty trucks.   
  (d) How Have the Agencies Evaluated Aerodynamic Testing Methods for the Phase 2 Program? 
With regard to aerodynamic devices, the NAS Committee reviewed aerodynamic test procedures related to evaluating aerodynamic effectiveness.  The Committee found that industry testing procedures can vary widely because of the precision of the standards themselves.    Further, the Committee found that fidelity of test results from coastdown procedures versus results from a powered on-track test is not known.  The Committee recommended that NHTSA and EPA evaluate the relative fidelities of the coast-down procedure and candidate powered procedures to define and optimum prescribed full-vehicle test procedure and process and validate the improved procedure against real world vehicle testing.  It also recommended that NHTSA and EPA assess whether adding yaw loads provides significantly increased value to the Cd result.  The Committee recommended providing updated test data to manufacturers to increase consumer confidence in the accuracy (and real-world applicability) of the testing measures as related to aerodynamic devices.[,]  
The agencies have undertaken a coordinated research program to inform the Phase 2 certification test procedure for aerodynamic drag and tire rolling resistance.  The U.S. EPA and its contractors have evaluated coast down, constant speed, CFD, and scale wind tunnel testing for tractors and trailers.  The goals of this research effort were to: assess variability between test methods; assess how yaw impacts aerodynamic performance; evaluate correlation of different test methods one to another; assess the impact of different tractor/trailer design attributes on the test results; examine how differences between manufacturers' products impact aerodynamics; and measure Cd improvements from a variety of aerodynamic devices in combination and alone.  NHTSA and its contractors conducted simulation modeling to: evaluate aerodynamic drag and tire rolling resistance improvements in combination with other vehicle and engine technologies, and determine the impact of different duty cycles on aerodynamic drag performance.  Finally, EPA has conducted an analysis to determine whether or not adding yaw adjustments to the certification process improves the Cd result.  As a result, the agencies are proposing to add yaw adjustments to the certification process for tractors.  The agencies are disseminating the results of these test programs and conclusions at association meetings and public meetings such as SAE COMVEC.   
Through the research programs described above, the agencies have evaluated aerodynamic data that better reflects real-world experience.  And, to the extent available, the agencies have collected aerodynamic performance data that reflect real-world experience.  This information has informed the Phase 2 proposal.  For example, in addition to the agencies are proposing to account for yaw in the aerodynamic assessment for Cd, we are also proposing changes to vehicle speeds used in the aerodynamic reference test procedure to facilitate improved estimation of Cd.  
  (e) What Kind of New Modeling Research has Been Conducted to Inform Phase 2? 
With a wide range of potential fuel consumption- and GHG emissions reducing technologies, the NAS Committee found that it is proper to assess the various combinations of technologies in real-world testing and in modeling.  The Committee recommended that NHTSA conduct detailed simulation modeling in addition to physical testing.  
In September 2012, NHTSA contracted with the Southwest Research Institute (SwRI) to conduct research in support of the next phase of Federal fuel efficiency (FE) and GHG standards.  Tasks included determining the baseline fuel efficiency and emissions levels and technologies of current model year commercial medium- and heavy-duty on-highway vehicles and work trucks, as well as projections of Phase 2 fuel efficiency and emission reduction technologies for diesel and gasoline powered vehicles.  The scope encompassed technologies for chassis and final-stage manufacturer vehicles and trailers, maintenance cost, material application, future design, capital investment, retail cost/payback and any other applicable advanced technologies.  Estimates of the costs, fuel savings effectiveness, availability, and applicability of technologies were done for each individual vehicle class category (e.g., segment). 
Selection of FE/GHG technologies, engines, vehicles, drive-cycles, etc. for the simulation modeling at SwRI was done in coordination with EPA, which had complimentary HD research programs involving vehicle road testing and engine dynamometer testing that informed the simulation efforts.  The SwRI analysis relied on a technology list that was developed from recent NAS HD vehicle fuel consumption reports as well as an extensive literature review.  Four base engines and four vehicles spanning the class 2b to class 8 vehicle segments were selected for simulation.  Experimental data was available from other projects for all of the vehicles and engines simulated, and full use of experimental data was made to calibrate the models before additional technologies were evaluated. 
SwRI used a vehicle simulation tool developed in-house to model vehicle performance over a range of drive cycles.  The commercial software GT-POWER (Gamma Technologies, Inc.) was used to model engine performance, fuel consumption, and CO2 emissions over the full speed-load range.  Results of the agency-sponsored simulation modeling at SwRI will be issued in peer-reviewed research reports.
  (f) How has GEM been Modified by EPA? 
In its report, the NAS Committee focused many of its recommendations on EPA's GEM model.  The Committee concentrated on what features could be incorporated into GEM in order to improve the model's ability to provide outputs representative of real-world use.   
More specifically, the Committee found that GEM output was unaffected by the actual use of a smaller or larger engine in the same subcategory because the engine map used by GEM is predefined.  The NAS Committee recommended that the agencies should assess whether a single steady-state speed-torque map is sufficient for GEM accuracy in engine efficiency prediction.  EPA has evaluated this question and is modifying GEM to allow for different maps as an input.  
NAS also recommended that the agencies allow powertrain testing for certification.  As described in Section II, the agencies are doing so in conjunction with GEM.  See the proposed provisions in 40 CFR1037.550.
More generally, NAS recommended revising GEM to reflect the benefit of integrating an engines, aftertreatment, and transmissions and to cover as large a fraction of over-the-road tractor operation as possible without becoming overly cumbersome.  As described in Section II and in Chapter 4 of the draft RIA, the agencies believe the proposed revisions to GEM reflect this.  
  (g) What have the Agencies Done to Validate GEM Testing?
The NAS Committee expressed concern over GEM's ability to translate to real world reductions in fuel consumption and GHG emissions.  In particular, the Committee found that GEM's current certification procedures have limited unbound variables that can be user-specified and do not allow for synergy between components.  Moreover, the NAS Committee found that GEM does not allow for the operation of components in the most efficient way or efficiency that could be gained by the operation of a component at a higher relative load, concluding that vehicle designs that are optimized for the conditions of the simulation might not be optimized in real world operation.  The Committee recommended that NHTSA conduct a real world evaluation to validate GEM inputs with the fuel consumption outputs.  
Recently, EPA and NHTSA sponsored a technical workshop at the Southwest Research Institute (SwRI).  At this workshop, SwRI presented a multi-year research effort sponsored by EPA to validate GEM model.  The development version of GEM incorporates several engine, transmission, driveline, and vehicle technologies being considered to meet FE and GHG standards for MD/HD vehicles.  GEM (including the steady-state fuel map approach) was validated by the agencies against over 130 test cases (multiple runs) of different size vehicles.  See Section II of this notice and Chapter 4 of the draft RIA for details about this validation work.
  (h) Has NHTSA Considered Non-Vehicular Strategies to Reduce Fuel Consumption?
In examining the broader picture of reducing fuel consumption, the NAS Committee found that there are opportunities to reduce fuel consumption in ways that that exceed NHTSA's statutory authority.  The Committee recommended that NHTSA work with and encourage EPA, DOE, and FHWA to reduce fuel consumption and GHG emissions by exploring non-vehicle approaches.
NHTSA is jointly releasing this rulemaking with the EPA, and has involved EPA as a co-drafter throughout the development of this rule.  NHTSA has also worked with DOE, and has been in touch with FHWA about medium- and heavy duty fuel efficiency.  While the majority of NHTSA's work with these agencies has been vehicle-related, NHTSA supports research and development on nonvehicle methods to reduce fuel consumption.  
     (1)  NAS Findings and Recommendations with Which the Phase 2 Standards Are Significantly Inconsistent and Why the Agencies Chose a Different Course
  (i) Should the Agencies Propose Separate Standards for Natural Gas Vehicles? 
The NAS Committee found that natural gas is a viable option to reduce fuel consumption and can also contribute to a reduction in GHG emissions, "unless additional findings of methane leakage alter this vision."  It noted that natural gas engines are well-developed and are ready for use for medium- and heavy-duty vehicles, including Class 8 trucks.  The Committee stated that while the load-specific CO2 emissions from natural gas engines are less than a comparable diesel engine, that benefit is partially negated by lower engine efficiency and methane emissions.  The NAS Committee recommended that NHTSA and EPA develop a separate standard for natural gas vehicles, similar to that in diesel- and gasoline-fueled engines.   We interpret this to mean standards that require natural gas-fueled engines to achieve similar thermal efficiency to diesel- and gasoline-fueled engines; in other words more stringent standards than would apply under a continuation of the Phase 1 approach.  Further, the Committee recommended the agencies do this without disrupting commercial transportation business models, though the Committee did not provide specific recommendations for how to achieve this goal.  It recommended that GEM certification tools need to include natural gas engine maps to accurately quantify the emissions and fuel economy of natural gas vehicles. The Committee also requested that EPA and NHTSA assemble a best estimate of well-to-tank GHG emissions to be used for developing future rulemakings.  
The agencies closely evaluated the recommendation for NHTSA and EPA to develop a separate natural gas standard for HD vehicles.  The agencies are not proposing a separate standard for natural gas engines or for natural gas powered vehicles for the Phase 2 program primarily, because the current market share is still at or below one percent of the total heavy-duty fleet and we do not project a significant increase is natural gas use during the Phase 2 timeframe.  Given its current status, we do not want to inhibit the adoption of this potentially promising alternative fuel through more stringent standards.  Other reasons to hold back on potentially establishing separate natural gas fuel standards at this time include the fact that there is uncertainty in the quantification of methane emissions, both upstream emissions as well as potential leakage on a vehicle, particularly the LNG vehicle boil-off emissions, which makes it very difficult to perform a rigorous analysis regarding the potential impacts of a separate natural gas standard; the industry itself is in the process of developing its technology and as it matures there is potential for self-correction to address methane leaks in recognition of environmental concerns that might affect its status as a potential green alternative fuel.  
With regard to well-to-tank or upstream emissions, the medium- and heavy-duty fuel efficiency program focuses on the tailpipe emissions of these vehicles for multiple reasons, including test measurement capabilities and the use of simulated output tools calibrated to test lab measurements. The agencies continues to evaluate the potential impacts and the benefits of a holistic approach for incorporating well-to-tank emissions into future rulemakings.  
As data comes available a better estimate can be made on the emissions impact from any potential regulations.  The agencies will closely monitor developments in natural gas adoption over the course of the rulemaking timeframe and determine if additional action may be necessary to prevent methane emissions increases.  See Section XI of this preamble for additional discussion regarding the treatment of natural gas fuel, engines and vehicles in this proposal, as well as for a detailed discussion of lifecycle emissions.
  (j) How are the Agencies Handling Uniformity and Accuracy Regarding Tire Rolling Resistance Characteristics?  
The NAS Committee expressed concern about the process by which rolling resistance values are established.  Specifically, the Committee noted that the process for determining tire rolling resistance is new and variability is not as well known.  The Committee recommended that the agencies implement a mechanism for obtaining accurate tire rolling resistance factors, including establishing a tire alignment laboratory.[,]  Additionally, the Committee recommended that this data be available in the through the Uniform Tire Quality Grading system.   
In Phase 1, the agencies received comments from stakeholders highlighting a need to develop a reference lab and alignment tires for the HD sector.  The agencies noted the lab-to-lab comparison conducted in the Phase 1 EPA tire test program.  The agencies reviewed the rolling resistance data from the tires that were tested at both the STL and Smithers laboratories to assess inter-laboratory and test machine variability.  The agencies conducted statistical analysis of the data to gain better understanding of lab-to-lab correlation and developed an adjustment factor for data measured at each of the test labs. Based on these results, the agencies believe the lab-to-lab variation for the STL and Smithers laboratories would have very small effect on measured rolling resistance values.  Based on the test data, the agencies judge that it is reasonable to continue the HD Phase 2 program with current levels of variability, and consider the use of either Smithers or STL laboratories to be acceptable for determining the tire rolling resistance value in Phase 2.  Note that the agencies have not made similar findings for other laboratories.  However, we welcome comment on the need to establish a reference machine for the HD sector and interest from tire testing facilities to commit to developing a reference machine.
In the final rule for the Phase 1 program, the agencies stated that compliance values submitted to the agencies should be derived using the ISO 28580 test method for drive tires and steer tires planned for fitment to the vehicle being certified.  The agencies believe that following a defined, standardized test procedure will provide levels of consistency in submitted compliance values.  The agencies conducted substantive testing to develop the final tire Crr standards in the Phase 1 rule at two different testing laboratories for comparison to test for variability.  The agencies concluded that although laboratory-to-laboratory and test machine-to-test machine measurement variability exists, the level observed is not excessive relative to the distribution of absolute measured Crr performance values and relative to the proposed standards.  Based on this, the agencies concluded that the test protocol and the proposed standards are reasonable for this program.
The agencies are considering publishing the tire Crr levels from fuel efficiency and GHG emission program compliance data.  Because compliance data are submitted by vehicle manufacturers rather than directly from the tire manufacturers or agency directed testing they could vary for a given tire model among vehicle manufacturer submissions, or lag when tires are redesigned.  Based on considerations such as this, the agencies are not proposing to establish a public database for heavy-duty vehicle tire rolling resistance information at this time. 
  (k) Have the Agencies Considered Industry Standards for Medium- and Heavy-Duty Tire Pressure Systems (TPS)? 
The NAS Committee found that tire pressure monitoring systems and automatic tire inflation systems are being adopted by fleets at an increasing rate.  However, the Committee noted that there are no standards for performance, display, and system validation.  The Committee recommended that NHTSA issue a white paper to clarify the minimum performance needed from these systems from a safety perspective.  This recommendation addresses the effects of tire pressure systems on vehicle safety.  Because the recommendation for a white paper relates to safety, and is not directed at fuel efficiency or GHG emissions effects, the agencies are not responding to the NAS recommendation in this proposal.
Nevertheless, the agencies note that automatic tire inflation systems can improve fuel efficiency and greenhouse gas emissions (see Preamble Section III / draft RIA Chapter 2) by maintaining tire pressure close to the tire pressure specification.  The agencies are proposing to recognize automatic tire inflation systems as a technology that improves fuel efficiency for tractors, trailers and vocational vehicles in the GEM vehicle compliance model. 
  (l) Will NHTSA Survey Private Fleets or Leverage Government Fleets to Gather Information for the Phase 2 Rulemaking? 
In its report, the NAS Committee found that there are many additional methods by which NHTSA could gather fleet information to inform the Phase 2 rulemaking.   The Committee recommended that NHTSA gather data from private fleets, and work with the General Services Administration or United States Postal Service to evaluate the fleet of vehicles they possess.[,]
NHTSA understands that additional fleet information could be helpful for purposes of formulating medium- and heavy-duty fuel efficiency standards.  Due to the length of time necessary to capture useful, relevant data from fleets, NHTSA was unable to conduct public or private fleet studies to inform this rulemaking.  NHTSA will take these recommendations under advisement to inform the agency in the future.  For the time being, the agencies have utilized data from FHWA, EPA's SmartWay program, Polk, and other sources of fleet information.    
  (m) GEM Inputs and Outputs
NAS recommended that the agencies configure GEM to be compatible with existing OEM order entry systems and provide a more useful output that includes graphs and other presentation methods.  However, the agencies believe these recommendations are beyond the scope of this rulemaking. 
  (n) OEM-Specific Code
NAS recommended allowing OEMs to substitute OEM-specific models or code for the fixed models in the current GEM, including substituting a power pack (the engine, aftertreatment, transmission).  However, as described in Section II, we are not proposing to allow this for a number of reason.  NAS explained that its goal was to reflect real-world operation accurately.  We believe the powertrain test option could be used to achieve this goal. 
     (1)  NAS Findings and Recommendations with Which the Phase 2 Standards Are Less-Significantly Inconsistent 
  (o) What are the Agencies Doing with Respect to Fuel Specifications for Natural Gas?
The Committee found that natural gas provides a potential long-term price advantage backed by an abundant supply.  In addition to its other natural gas (NG) -specific recommendations, the Committee recommended government and the private sector should support further technical improvements in engine efficiency and operating costs, reduction of storage costs, and emission controls (as is done for diesel engines).   Further, it recommended that NHTSA and EPA should also evaluate the need for and benefits and costs of an in-use NG fuel specification for motor vehicle use.
The agencies recognize the value in evaluating an in-use NG fuel specification for motor vehicle use.  EPA has developed and promulgated fuel specifications for other motor vehicle fuel types, both for test fuels and for in-use fuels.  Such fuel specifications established by EPA usually complement fuel specifications established by third party organizations such as ASTM.  
EPA has established fuel specifications for natural gas used as test fuels for emissions testing,  but has not adopted specifications for in-use natural gas used as a motor vehicle or off-highway fuel.  However, states have set natural gas quality limits on the natural gas sold within the state, and natural gas pipelines have established specifications for the natural gas either for their own purposes or to ensure that the natural gas being transported by its pipeline will be usable within the states to which the pipeline transports the natural gas.  These specifications would apply to natural gas used as a motor vehicle fuel.
EPA may consider establishing in-use specifications for natural gas used as a motor vehicle or off-highway fuel in the future.  However, because natural gas use within the transportation sector is currently so small (less than 1 percent of total natural gas demand and less than 1 percent of heavy-duty fuel demand), its use for transportation would not have a separate fuel supply system, and it would not make sense that such a small user segment should dictate fuel quality for the overall fuel supply.  Like other potential regulations that EPA might consider, EPA will consider establishing fuel quality regulations on natural gas if and when its use increases as a fuel for the transportation sector.
  (p) Have the Agencies Considered Low Rolling Resistance Standards for All New Tires? 
With regard to low rolling resistance tires, the NAS Committee found that 70 percent of new tires sold in 2012 were for replacement of existing tires.  It found that although most new tractors and trailers come equipped with SmartWay verified tires, only 42 percent of replacement tires are SmartWay verified.  The Committee recommended that NHTSA and EPA evaluate rolling resistance of new tires, especially those sold as replacements.  It recommended that NHTSA adopt a regulation establishing a low rolling resistance standard for all new tires designed for tractor and trailer use.  
The agencies are proposing to include low rolling resistance tires as a technology that may be used for compliance for fuel efficiency and GHG standards.  The agencies conducted tire rolling resistance testing and considered confidential business information data provided by several tire manufacturers, which is discussed in Preamble Sections III, IV, and V and draft RIA Chapter 2.  The agencies have focused our resources and attention to develop standards for new vehicles and engines.  NHTSA has not conducted work to consider a rolling resistance performance standard for replacement tires at this time and will take the Committee's recommendation under advisement.  
  (q) Have the Agencies Considered A Protocol for Measuring And Reporting the Coefficient of Rolling Resistance to Aid In Consumer Selection?  
The Committee recommended that the agencies consider establishing a protocol for measuring and reporting the coefficient of rolling resistance to aid in consumer selection, similar to passenger car tires.  At this time, the agencies are taking the Committee's recommendation under advisement.  
  (r) How are the Agencies Revising GEM?
Consistent with the NAS recommendations, the agencies are proposing to make the following revisions to GEM, as also detailed Preamble Section II:
         * Allowing manufacturers to input parameters related to engines, transmissions, and axles
         * Basing GEM on a steady-state fuel map
         * Allowing separate fuel maps for alternative fuels
         * Including real-world road grade to highway cycles
         * Use of wind-average drag coefficients for aerodynamic inputs
However, the agencies are not making other changes recommended by NAS.  We are not making the user interface changes recommended by NAS on behalf of manufacturers.  Our recent discussions with manufacturers indicate that they have adopted ordering systems that are consistent with the current interface.  We are also not revising GEM to allow manufacturers to input their own shift strategies.  Instead, we are proposing a powertrain test option that would serve the same purpose.
NAS also recommended that we broaden GEM to allow for additional duty-cycles and actual vehicle weights.  However, we believe that such changes would not significantly improve the overall program, but would add significant complexity. 
  (s) Vehicle Weight and Payload In GEM
NAS recommended that NHTSA evaluate the load specific fuel consumption (LSFC) at more than one payload to ensure there is not an undesirable acute sensitivity to payload by a particular truck power train and to reflect the fact that some states allow vehicles to operate with gross combination vehicle weight ratings well in excess of the values adopted for the simulation.  NAS also recommended that GEM allow manufacturers to input actual vehicle weights.
As described in Section III, the agencies are proposing to modify GEM to allow heavy-haul vehicles to be certified separately, to reflect their unique weight and payload attributes.  However, are not proposing to allow for other payloads or weights to minimize complexity during the compliance process. 
  (t) Is NHTSA Conducting Any Campaigns Related to Fuel Efficient Driving Behaviors?
        In the NAS Committee's Phase 1 report, the Committee concluded that fuel saving opportunities exist if drivers are educated about fuel efficient driving techniques.  The Phase 2 reiterated this finding, and recommended NHTSA encourage and incentivize the dissemination of information related to the relationship between driver behavior and fuel savings.     
Based on NHTSA's understanding of the medium- and heavy-duty segments, a large portion of the vehicles are driven professionally.  Professional drivers operate these vehicles as independent drivers and in trucking fleets.  In some instances, particularly larger fleet operations, management will track and encourage driver fuel efficiency.  It is not uncommon for professional drivers across all types of trucking operations to undergo private fuel efficiency training.  For these reasons, NHTSA has not yet undertaken dissemination of information related to the relationship between driver behavior and fuel savings.  
















I.  Amendments to Phase 1 Standards
The agencies are proposing revisions to the regulatory text specifying test procedures and compliance provisions used for Phase 1.  For the most part, these amendments would apply exclusively to the Phase 2 rules.  In a few limited instances, the agencies are proposing to apply some of these changes to Phase 1.  These limited changes to the Phase 1 program are largely conforming amendments, and are described below, along with other proposed minor changes to the Phase 1 compliance program.  We note, however, that we are not reopening the Phase 1 rules in a general sense, nor are we requesting comment on the stringency of the Phase 1 standards or other fundamental aspects of the Phase 1 program.
A.  EPA Amendments
     (1)  Pickups and Vans
EPA is proposing to relocate the GHG standards and other regulatory provisions for chassis-certified HD pickups and vans in the Code of Federal Regulations from 40 CFR 1037.104 to 40 CFR 86.1819.  Accordingly, NHTSA will modify any of EPA's references in 49 CFR 523 and 535 to accommodate the migration.  EPA is making this change largely to address ambiguities regarding the application of additional provisions from 40 CFR part 86, subpart S, for these vehicles.  The approach in 40 CFR 1037.104 was to state that all of 40 CFR part 86, subpart S, applies except as specified in 40 CFR 1037.104; however, the recent standards adopted for light-duty vehicles and light-duty trucks included several changes to 40 CFR part 86, subpart S, that should not apply for chassis-certified HD pickups and vans.  Based on our experience implementing the Phase 1 program, we believe it is appropriate to include the GHG standards for chassis-certified HD pickups and vans in the same part as light-duty vehicles (40 CFR part 86, subpart S).  All other certification requirements for these heavy-duty vehicles -- criteria exhaust standards, evaporative and refueling standards, provisions for onboard diagnostics, and the range of certification and compliance provisions -- are in that subpart.  We note that we have not experienced the same challenges for other heavy-duty vehicles, and are therefore not proposing to relocate the other provisions of 40 CFR part 1037.
This migration has highlighted a few areas where we need to clarify how the regulations apply for chassis-certified HD pickups and vans.  In particular, EPA is proposing to make the following changes:
         *        Clarify that the GHG standards apply at high-altitude conditions
         *        State that fleet-average calculation of carbon-related exhaust emissions (CREE) is not required for chassis-certified HD pickups and vans
         *        Clarify that requirements related to model types and production-weighted average calculation apply on any passenger automobiles and light trucks
         *        State that the credit and debit provisions of 40 CFR 86.1865-12(k)(5) do not apply for chassis-certified HD pickups and vans
         *        Clarify that the Temporary Lead Time Allowance Alternative Standards in 40 CFR 86.1865-12(k)(7) do not apply for chassis-certified HD pickups and vans
         *        State that the early credit provisions of 40 CFR 86.1866-12, 86.1867-12, 86.1868-12, 86.1869-12, 86.1870-12, and 86.1871-12 do not apply for chassis-certified HD pickups and vans
       
     (2)  Heavy-Duty Engines
As described in Section II, EPA is proposing to revise the approach to classifying gaseous-fuel engines with respect to both GHG and criteria emission standards.  This does not affect the vehicle-based standards that apply under 40 CFR part 1037.  The general approach would be to continue to divide these engines into spark-ignition and compression-ignition categories, but we propose to always apply the compression-ignition standards to gaseous-fuel engines that qualify as medium heavy-duty or heavy heavy-duty engines.  Currently, any gaseous-fuel engine derived from a gasoline engine would be subject to the spark-ignition standards no matter the weight class of the vehicle.  As described in Section II, EPA now believes this approach does not reflect the reality that gaseous-fuel engines used in Class 6, 7, or 8 vehicles compete with diesel engines rather than gasoline engines.  Such engines compete directly with diesel engines, and we believe they should be required to meet the same emission standards.  Because all current gaseous-fuel engines for these large vehicles are already being certified to the compression-ignition engine standards we can propose to also apply this approach to engines subject to the HD GHG Phase 1 standards without adverse impacts on any manufacturers 
EPA is also proposing to revise the regulation to spell out how to apply enforcement liability for a situation in which the engine manufacturer uses deficit credits for one or more model years.  Simply put, any time an engine manufacturer is allowed to carry a deficit to the next year, all enforcement liability for the engines that generated the deficit are extended for another year.  These provisions are the same as what we have already adopted for heavy-duty vehicles subject to GHG standards under 40 CFR part 1037.
     (3)  Evaporative Emission Testing for LNG Vehicles
Heavy-duty vehicles fueled by natural gas have for many years been subject to evaporative emission standards and test procedures.  While fuel systems containing gasoline require extensive design features to handle vented fuel, fuel systems containing natural gas generally prevent evaporative losses by remaining sealed.  In the case of compressed natural gas, there is a voluntary consensus standard, ANSI NGV1-2006, that is designed to ensure that there are no leaks or losses during a refueling event.  Since compressed natural gas systems remain sealed indefinitely once the refueling event is complete, we understand that complying with the ANSI refueling standard is sufficient to demonstrate that the vehicle also complies with all applicable evaporative emission standards.  The Light-Duty Tier 3 final rule included provisions to clarify that compressed natural gas systems meeting the applicable ANSI standard are deemed to comply with EPA's evaporative emission standards.
Systems using liquefied natural gas (LNG) behave similarly, except that the cryogenically stored fuel needs to be vented to prevent an over-pressure situation if the vehicle is not used for an extended time, as described in Section XI.  Such vehicles are currently subject to evaporative emission standards and test procedures, though there are some substantial questions about how one can best apply the procedures to these systems; not all of the instructions about preconditioning the vehicle are straightforward for cryogenic fuel systems with no evaporative canister.  EPA is interested in pursuing an approach that is similar to what applies for compressed natural gas systems, which would need some additional attention to address boil-off emissions.  There are two voluntary consensus standards that specify recommended practices to lengthen the time before boil-off starts to occur for LNG systems.  SAE J2343 specifies a minimum five-day hold time and NFPA 52 specifies a minimum three-day hold time.  EPA is proposing to require that manufacturers of LNG vehicles meet the SAE J2343 standard as a means of demonstrating compliance with the evaporative emission standards.  
While the hold-time requirements of SAE J2343 and NFPA 52 are clear, there appears to be very little description of the procedure to determine how much time passes between a refueling event and initial venting.  To ensure that all manufacturers are subject to the same set of requirements, we are proposing to include a minimal set of specifications corresponding to the demonstration under SAE J2343.  In particular, EPA proposes to specify that the vehicle must remain parked throughout the measurement procedure, ambient temperatures must remain between 20 and 30 °C, the refueling event must follow conventional procedures corresponding to the vehicle's hardware, and no stabilization step is allowed after the refueling event.
The proposed rule provides for relying on compliance with SAE J2343 as a means of demonstrating compliance with evaporative emission standards immediately upon completion of the final rule.  EPA is proposing to make this mandatory for vehicles produced on or after January 1, 2020.
EPA requests comment on all aspects of the proposed provisions for LNG vehicles.
     (4)  Compliance and Other General Provisions
EPA proposes the following changes that apply broadly for different types of vehicles or engines:
* Add a requirement for vehicle manufacturers that sell incomplete vehicles to secondary vehicle manufacturers to provide emission-related assembly instructions to ensure that the completed vehicle will be in a certified configuration.
* Specify parameters for determining a vehicle's curb weight, consistent with current practice for vehicles certified under 40 CFR part 86, subpart S.
* Revise the recordkeeping requirement to specify a uniform eight-year retention period for all data supporting an application for certification.  The provision allowing for one-year retention for "routine data" is no longer necessary now that data collection is all recorded in electronic format.  EPA is also clarifying that the eight-year retention period is calculated relative to the latest associated application for certification, not from the date the data were generated.
* Change the rounding for analytically derived CO2 emission rates and target values from the nearest 0.1 g/mile to the nearest 1 g/mile.
* Clarify that manufacturers may not amend an application for certification after the end of the model year, other than to revise maintenance instructions or family emission limits, as allowed under the regulations.  Remove the general recordkeeping provisions from 40 CFR 1037.735 that are already described in 40 CFR 1037.825. 
* Require a different equation with a ratio of 0.8350 in 40 CFR 1037.521(f) when wind averaged drag is used for determining the yaw sweep correction.
B.  Other Compliance Provisions for NHTSA
     (1)  Standards and Credit Alignment
In Phase 1, the agencies intended GHG and fuel consumption standards for segments of the National Program to be in alignment so that manufacturers would not be required to build vehicles to meet in equivalent standards.  Despite the intent, NHTSA and EPA have identified several scenarios where credits and compliance to both sets of standards are not aligned.  This misalignment can have various impacts on compliance with the National Program.  
For example, a manufacturer of tractors could have two vehicle families that with same number of vehicles but with opposite and equal compliance margins with standards.  In this scenario, the first family would over-comply with the GHG standard while the second family would under-comply with the GHG standard by the same amount of grams CO2/ton-mile.  In calculating credits, the manufacturer would have a net of zero GHG credits and exactly meet compliance; however, based on conversions and rounding of the standard and performance results that manufacturer could end up earning credits or having a credit deficit under NHTSA's fuel efficiency program.
In order to correct this misalignment, NHTSA is proposing to amend the existing fuel consumption standards and the method for calculating performance values for all compliance categories by increasing the significant digits in these conversion values.  Increasing the significant digits in these values will result in more precise alignment when converting from GHG consumption standards to fuel consumption standards.  
The rounding approach differs for heavy-duty pickup trucks and vans set apart from other vehicle and engine compliance categories.  Heavy Duty Pickup Trucks and Vans (HD PUV) use the same approach for calculating standards and performance values as the LD CAFE and GHG programs.   As such, NHTSA proposes to increase the required significant values for each components used in these calculations.  More specifically, NHTSA proposes to increase the number of decimal places for sub-configuration target standards, the sub-configuration fuel consumptions, the fleet average target standard and the fleet average fuel consumption values from two fixed values and increases them by one additional significant digit.  The regulation currently specifies rounding to these values nearest 0.01 and under the proposed approach the values would be rounded to the nearest 0.001. 
NHTSA is also proposing to modify the c and d target coefficients used for deriving HD PUV target standards.  These values are directly convertible from the EPA a and b target coefficients, respectively.  Currently, the c target coefficient contains six decimal places and the d target coefficient contains two decimal places. Each coefficient would be increased by one decimal -- meaning the c target coefficient would have seven decimal places, with the last four being significant digits -- and the d target coefficient would be increased to three decimal places, with there being a total of four significant digits. The modifications to the rounding and level of precision of these six values will not entirely eliminate the misalignment of the credits being calculated for EPA and NHTSA but will reduce it to an insignificant variance. 
For other compliance categories, a similar approach can be used to address the misalignment of calculated credits as it pertains to vocational vehicles, tractors, and heavy duty engines.  NHTSA proposes to increase the number of significant digits by increasing the decimal places contained in the standards and the FEL for the vocational vehicle and tractor segments and the FCL for the engine segments to four decimal places. Currently, the vocational vehicle and tractor standards and FELs contain one decimal place while engines standards and FELs contain two decimal places. The standards will be identified directly in the regulation while the FEL and FCL will be a calculated value rounded to the nearest 0.0001. 
The modifications to the rounding and level of precision of these values should eliminate the misalignment of the credits being calculated. 
These changes are planned for implementation retroactively starting for the model year 2013 standard.  However, because the stringency of the Phase 1 fuel consumption standards may be adversely impacted for certain manufacturers who have already developed engineering plans considering previous credit balance, we propose to seek comments on whether optional compliance should be allowed.  
     (2)  Off-road Exclusion Petition Process for Tractors and Vocational Vehicles 
In the Phase 1 final rule, the agencies added provisions for certain types of vocational tractors and vocational vehicles that operate off-road to be exempt from standards, although standards would still apply to the engines installed in these vehicles.  An exemption was warranted because these vehicles operate in a manner essentially making them incompatible with fuel saving and emission reduction technologies, such as performing work in an off-road environment, being speed restricted, or having off-road components or other features making them incompatible for roadways.   For the Phase 1 program, off-road vehicle manufacturers meeting the exemption provisions are required to provide EPA and NHTSA, through the EPA database, a report within 90 days after the end of each model year identifying its off-road vehicles.   The report must provide a description of each excluded vehicle configuration, including an explanation of why it qualifies for the exclusion and the production volume.  A manufacturer having an off-road vehicle failing to meet the criteria under the agencies' off-road exemptions explained in 40 CFR 1037.631 and 49 CFR 523 is allowed to submit a petition as required in 49 CFR 535.8(h)(6) describing how and why its vehicles should qualify for exclusion.   
Under Phase 1 compliance processes, manufacturers have not been using the petitioning process when seeking clarification on off-road vehicles not meeting the strict interpretation of the provision.  Instead, manufacturers are submitting information to EPA in advance of the end of the model year to determine whether or not these vehicles are exempted and to determine whether it is necessary to submit any applications for certificates of conformity as required by 40 CFR 1037.201.  EPA and NHTSA collaboratively determine whether manufacturers are exempted and EPA shares the decision with the manufacturer.  The current process followed by the agencies makes it unnecessary to use the petitioning process and has the added advantage of providing a joint determine early enough in the model year whereas disapproved manufacturer have adequate enough time to submit applications for certificates of conformity.  
For the Phase 1 standards, the agencies are proposing to delete the petitioning process and add provisions for manufacturers seeking clarification on the qualifications of an off-road vehicle exemption to send information to the agencies through EPA in advance of the model year in order for us to make an appropriate determination.  EPA plans to add these provisions into its regulations as a part of 40 CFR 1037.210.  Removal of the formal petition process is intended to minimize the impact on manufacturers that are seeking an off-road exemption while allowing the agencies to be proactive in making a determination based on the criteria and individual merits of the vehicles being requested for an exemption.  Collaboration between the agencies in making a decision about exemptions outside a formal petition process should streamline the timing for a response and reduce the burden upon the agencies and manufacturers.  
     (3)  Innovative Technology Request Documentation Specifications
For vehicle and engine technologies that can reduce GHG and fuel consumption, but for which there is not yet an established method for quantifying reductions, the agencies encourage the development of such technologies through providing "innovative technology" credits. Manufacturers seeking innovative technology credits must quantify the reductions in fuel consumption and GHG emissions that the technology is expected to achieve, above and beyond those achieved on the existing test procedures.
Manufacturers submitting innovative technology requests must send a detailed description of the technology and a recommended test plan to EPA as detailed in 40 CFR 1036.610 and 40 CFR 1037.610.  The test plan must include whether the manufacturer is applying for credits using the improvement factor method or the separate-credit method.  It is recommended that manufacturers not conduct testing until the agencies can collaboratively approve the test plan in which a determination is made on the qualification of the technology as innovative.   EPA and NHTSA also make the decision at that time whether to seek public comments on the test plan if there are unknown factors in the test methodology.  
Under the current regulations, EPA and NHTSA have reviewed several test plans from manufacturers seeking innovative technology credits.  The agencies have received feedback from manufacturers that the final approval process is not clearly defined, which has caused a substantial time commitment from manufacturers.  To address this feedback, the agencies are proposing to add further clarification in 40 CFR 1036.610 and 40 CFR 1037.610 defining the steps manufacturers must follow after an approval is granted for a test plan.  This includes specifications for submitting the final documentation to the agencies for final approval and for determining credit amounts.  The agencies are adding the same level of detail as required for the final documentation required in EPA's light duty off-cycle program in 40 CFR 86.1869-12(e)(2).  These specifications should provide manufacturers with a clear understanding of the required documentation and approval process to reduce the time burden placed on manufacturers.  
NHTSA also proposes to add similar provisions from its light duty CAFE program specified in 49 CFR 531.6(b)(2) and 533(c)(2) for limiting the approval of innovative technologies under its program for those technologies related to crash-avoidance technologies, safety critical systems or systems affecting safety-critical functions, or technologies designed for the purpose of reducing the frequency of vehicle crashes.  NHTSA prohibited credits for these technologies under any circumstances in its CAFE program (see 77 FR 62730).  NHTSA believes a similar strategy is warranted for heavy-duty vehicle as well.  Further, the evaluation of crash avoidance technologies is better addressed under NHTSA's vehicle safety authority than under a case-by-case innovative technology credit process.
     (4)  Credit Acquisition Plan Requirements
The National Program was designed to provide manufacturers with averaging, banking and trading (ABT) flexibilities for meeting the GHG and fuel efficiency standards to optimize the effectiveness of the program.  As a part of these flexibilities, manufacturers generating a shortfall in fuel consumption credits for a given model year must submit a credit plan to NHTSA describing how it plans to resolve its deficits within 3 models year.  To assist manufacturers, NHTSA is proposing to modify 49 CFR 535.9(a)(6) of its regulation to clarify and provide guidance to manufacturers on the requirements for a credit allocation plan which contains provisions to acquire credits from another manufacturer which will be earned in future model years. 
The current regulations do not specify if future credit acquisition is permitted or not and the revision is intended to clarity that it is, with respect to the limitation a credit shortfall can only be carried forward three years.  Providing this clarification is intended to increase transparency within the program and ensure all manufacturers are aware of its available flexibilities.
In addition to providing this clarification, the regulation is also being amended to outline the requirement that in order for a credit allocation plan containing this provision to be reviewed for approval, NHTSA will require an agreement signed by both manufacturers.  This requirement will assist NHTSA with its determination that the credits will become available to the acquiring manufacturer given they are earned.
     (5)  New Vehicle Field Inspections and Recordkeeping Requirements
Previously, NHTSA decided not to include recordkeeping provisions in its regulations for the Phase 1 program.  EPA regulations include recordkeeping requirements in 40 CFR 1036.250, 1036.735, 1036.835, 1037.250, 1037.735 and 1037.835.  For the Phase 2 program, NHTSA is proposing to add recordkeeping provisions to facilitate its compliance validation program.  For the Phase 1 program, manufacturers test and conduct modeling to determine GHG emissions and fuel consumption performance, and EPA and NHTSA perform validation testing. EPA uses the results of the validation tests to create a finalized report that confirms the manufacturer's final model year GHG emissions and fuel consumption results.  Each agency will use this report to enforce compliance with its standards.  
NHTSA assesses compliance with fuel consumption standards each year, based upon EPA final verified data submitted to NHTSA for its heavy-duty vehicle fuel efficiency program established pursuant to 49 U.S.C. 32902(k).  NHTSA may also conduct verification testing throughout a given model year in order to validate data received from manufacturers and will discuss any potential issues with EPA and the manufacturer.  See 49 CFR 535.9.  After the end of the model year, NHTSA may also decide to conduct field inspections in order to confirm whether or not a new vehicle was manufactured as originally certified.  NHTSA may conduct field inspections separately or in coordination with EPA.  To facilitate inspections, the agencies propose to add additional provisions to the EPA recordkeeping provisions to require manufacturers to keep build documents for each manufactured tractor or vocational vehicle.  Each build document would be required to contain specific information on the design, manufacturing, equipment and certified components for a vehicle.  NHTSA would request build documents through EPA and the agencies would collaborate on the finding of all field inspections.  Manufacturers would be required to keep records of build documents for a period of 8 calendar years.    
















II.  Other Proposed Regulatory Provisions
In addition to the new GHG standards proposed in this rule, EPA and NHTSA are proposing to amend various aspects of the regulations as part of the HD GHG Phase 1 standards for heavy-duty highway engines and vehicles.  EPA is also taking the opportunity to propose to amend regulatory provisions for other requirements that apply for heavy-duty highway engines, and for certain types of nonroad engines and equipment. 
A.  Proposed Amendments Related to Heavy-Duty Highway Engines and Vehicles
This section describes a range of proposed regulatory amendments for heavy-duty highway engines and vehicles that are not directly related to GHG emission standards.  Section XIV.D describes additional changes related to test procedures that affect heavy-duty highway engines.
     (1)  Alternate Emission Standards for Specialty Heavy-Duty Vehicles
Motor vehicles conventionally comprise a familiar set of vehicles within a relatively narrow set of parameters  --  motorcycles, cars, light trucks, heavy trucks, buses, etc.  The definition of "motor vehicle;" however, is written broadly to include a very wide range of vehicles.  Almost any vehicle that can be safely operated on streets and highways is considered a motor vehicle.  Development of EPA's emission control programs is generally focused on a consideration of the technology, characteristics, and operating parameters of conventional vehicles, and typically includes efforts to address concerns for special cases.  For example, the driving schedule for light-duty vehicles includes a variation for vehicles that are not capable of reaching the maximum speeds specified in the Federal Test Procedure.  
Industry innovation in some cases leads to some configurations that make it particularly challenging to meet regulatory requirements.  We are aware that plug-in hybrid-electric heavy-duty vehicles are an example of this.  An engine for such a vehicle would be expected to have a much lower power rating and duty cycle of engine speeds and loads than a conventional heavy-duty engine.  The costs of regulatory compliance and the mismatch to the specified duty cycle can make it cost-prohibitive for engine manufacturers to certify such an engine under the heavy-duty highway engine program.  EPA's nonroad emission standards have reached a point that involves near parity with the level of emission control represented by the emission standards for heavy-duty highway engines.  
To address concerns about certifying heavy-duty engines to highway standards for use in hybrid vehicles, we are therefore proposing to allow manufacturers of heavy-duty highway vehicles the option to install limited numbers of engines certified to alternate standards.  Qualifying engines would be considered motor vehicle engines, but they would be certified to standards that are equivalent to those adopted for comparable nonroad engines.  Vehicles with hybrid powertrains would be a focus of this allowance.  EPA believes the same principles apply for amphibious vehicles and for vehicles with maximum speed at or below 45 miles per hour and we are therefore proposing to apply the same provisions to these additional vehicles.
Under this approach, compression-ignition engines could be certified to alternate standards that are equivalent to the emission standards under 40 CFR part 1039, and spark-ignition engines could be certified to alternate standards that are equivalent to the Blue Sky emission standards under 40 CFR part 1048.  Engines meeting these alternate emission standards would generally be expected to use the same technologies to control emissions as engines certified to the applicable emission standards for heavy-duty highway engines.  EPA would disallow this approach for compression-ignition engines below 56 kW since the nonroad standards for those engines are substantially less stringent than the standards that apply for heavy-duty highway engines.  Also, since the nonroad duty cycles would generally better represent the in-use operating characteristics of these vehicles, we would expect the nonroad test procedures to be at least as effective in achieving effective in-use emission control.  The regulations at 40 CFR part 1048 include a simplified form of diagnostic controls, and we are proposing in this rule to include simplified diagnostic controls for 40 CFR part 1039.  These engine-based diagnostic controls would substitute for the diagnostic requirements that would otherwise apply under 40 CFR part 86.010-18.
It may also be appropriate to allow manufacturers of such heavy-duty vehicles to use an engine from a smaller vehicle that is already covered by chassis-based certification under 40 CFR part 86, subpart S.  Many of the heavy-duty vehicles described under this section would be adequately powered by lower-displacement automotive engines, and the level of emission control would clearly be expected to match or exceed that of engines certified to the heavy-duty standards that would otherwise apply.  However, engines used in chassis-certified vehicles involve some degree of calibration that relates engine operation to vehicle parameters.  Adapting these engines to heavy-duty vehicles would therefore require some recalibration, which could involve changing the effectiveness of emission controls.  It is also unclear how the heavy-duty vehicle would be designed for onboard diagnostic controls.  EPA requests comment on the technical and regulatory issues surrounding the use of engines from chassis-certified vehicles in certain heavy-duty vehicles.
These alternate standards relate only to the engine certification-based emission standards and certification requirements.  All vehicle-based requirements for evaporative and greenhouse gas emissions would continue to apply as specified in the regulation.
This allowance is intended to lower the barrier to introducing innovative technology for motor vehicles.  It is not intended to provide a full alternative compliance path to avoid certifying to the emission standards and control requirements for highway engines and vehicles.  To accomplish this, EPA is proposing to allow a manufacturer to produce no more than 1,000 hybrid vehicles in a single model year under this program, and no more than 200 amphibious vehicles or speed-limited vehicles.  
California ARB is in the process of developing similar provisions for a reduced compliance burden for a limited number of highway vehicles toward the goal of incentivizing hybrid vehicles and other advanced technology.  EPA expects to be involved in that policy development and would be interested in aligning programs as much as possible.  It may be necessary or appropriate for the final rule to include a reference to any new policy that has been adopted by California ARB in the meantime.
EPA requests comment on all aspects of this program to create alternate motor-vehicle emission standards that allow certified nonroad engines to be used in the identified types of heavy-duty highway vehicles. 
     (2)  Chassis Certification of Class 4 Heavy-Duty Vehicles
In the HD Phase 1 rule, the agencies included a provision allowing manufacturers to certify Class 4 and larger heavy-duty vehicles to the chassis-based emission standards in 40 CFR part 86, subpart S.  This applied for greenhouse gas emission standards, but not criteria emission standards.  EPA revisited this issue in the recent Tier 3 final rule, where we revised the regulation to allow this same flexibility relative to exhaust emission standards for criteria pollutants.  However, this change to the regulation conflicted with our response to a comment in that rulemaking that EPA should not change the certification arrangement for criteria pollutants.  
Manufacturers have taken opposing views of the proper approach for vehicles above 14,000 lbs GVWR.  EPA requests comment on how best to address this issue in a way that resolves the various and competing concerns.  In particular, EPA requests comment on the following specific areas of interest:
         * Should EPA treat 14,000 lbs as a bright line to disallow any certification of larger vehicles to the chassis-based exhaust emission standards?
         * Should EPA allow for certifying the larger vehicles to the chassis-based standards, but identify certain criteria to narrow the scope of this allowance?  For example, EPA could limit this to compression-ignition or spark-ignition engines, we could identify a maximum GVWR value above which chassis-based certification is not allowed, or EPA could limit this allowance to vehicles that share design characteristics with chassis-certified vehicles below 14,000 lbs GVWR (as California ARB has done).
         * If EPA allows for certifying the larger vehicles to the chassis-based standards, what additional amendments are needed to clarify how to apply the requirements of 40 CFR part 86, subpart S?  For example, some further specification may be needed to identify how to apply requirements related to emission standards, driving schedule, and emission credits?
     (3)  On-Board Diagnostics for Heavy-Duty Vehicles
EPA defines the onboard diagnostic requirements for heavy-duty vehicles above 14,000 lbs GVWR in 40 CFR 86.010-18, but we allow manufacturers to meet OBD requirements based on the requirements adopted by the California Air Resources Board.  Manufacturers in almost all cases certify based on the California procedures instead of EPA procedures.  Certification based on EPA procedures is limited to certain spark-ignition engine families whose certification is limited to states other than California.  EPA requests comment on a change to EPA regulation that simply requires that manufacturers meet the California requirements.  EPA has taken a similar approach for vehicles at or below 14,000 lbs GVWR, as described in 40 CFR 86.1806-17.  Under this approach, EPA would recognize California ARB's approval as valid for EPA certification.  EPA requests comment on this approach.  In particular, EPA requests comment on the need to preserve EPA specifications for on-board diagnostics for any special situations, and on the need to make any adjustments or allowances from the California ARB regulations to work for EPA implementation.
     (4)  Nonconformance Penalties (NCPs)
The Clean Air Act requires that heavy-duty standards for criteria pollutants such as NOx must reflect the greatest degree of emission reduction achievable through the application of technology that EPA determines will be available.  Such "technology-forcing" standards create the risk that one or more manufacturers may lag behind in the development of their technology to meet the standard and, thus, be forced out of the marketplace.  Recognizing this risk, Congress enacted CAA section 206(g) (42 U.S.C. 7525(g)), which requires EPA to establish "nonconformance penalties" to protect these technological laggards by allowing them to pay a penalty for engines that temporarily are unable to meet the applicable emission standard, while removing any competitive advantage those technological laggards may have.     
On September 5, 2012, EPA adopted final NCPs for heavy heavy-duty diesel engines that could be used by manufacturers of heavy-duty diesel engines unable to meet the current oxides of nitrogen (NOx) emission standard.  On December 11, 2013, the U.S. Court of Appeals for the District of Columbia Circuit issued an opinion vacating that Final Rule.  It issued its mandate for this decision on April 16, 2014, ending the availability of the NCPs for the current NOx standard, as well as vacating certain amendments to the NCP regulations due to concerns about inadequate notice.  In particular, the amendments revise the text explaining how EPA determines when NCP should be made available.  EPA is proposing to remove the vacated regulatory text specifying penalties, and re-proposing most of the other vacated amendments to provide fuller notice.  Finally, EPA is proposing a new 40 CFR 86.1103-2016 to replace the existing 40 CFR 86.1103-87.    
  (a) Vacated Penalties
In EPA's regulations, NCP penalties are calculated from inputs specific to the standards for which NCPs are available.  The input values are specified in 40 CFR 86.1105-87.  EPA is proposing to remove paragraph (j) of this section which specifies the vacated inputs for the 2010 NOx emission standard.  EPA does not request comment on this change because this text has already been vacated by the Court.  Since all manufacturers are currently complying with these standards, the text also no longer has any purpose.
  (b) Re-proposed Text
The 2012 rule made amendments to four different sections in 40 CFR part 86.  The amendments to 40 CFR 86.1104-91 and 86.1113-87 were supported during the rulemaking and were not questioned in the Court's decision.  Nevertheless, these revisions were vacated along with the rest of the rule.  EPA is re-proposing these changes. Since we are proposing to vacate and restore the regulatory text, the proposal consists of leaving these sections of the regulations unchanged.
    (i) Upper Limits
The changes to 40 CFR 86.1104-91 affected the upper limit.  The upper limit (UL) is the emission level established by regulation above which NCPs are not available.  A heavy duty engine cannot use NCPs to be certified for a level above the upper limit.  CAA section 206(g)(2) refers to the upper limit as a percentage above the emission standard, set by regulation, that corresponds to an emission level EPA determines to be "practicable."  The upper limit is an important aspect of the NCP regulations not only because it establishes an emission level above which no engine may be certified using NCPs, but it is also a critical component of the cost analysis used to develop the penalty rates.  The regulations specify that the relevant costs for determining the COC50 and the COC90 factors are the difference between an engine at the upper limit and one that meets the applicable standards (see 40 CFR 86.1113-87).    
The regulatory approach adopted under the prior NCP rules sets the upper limit at the prior emission standard when a prior emission standard exists and is then changed to become more stringent.  EPA concluded that this upper limit should be reasonably achievable by all manufacturers with engines or vehicles in the relevant class.  It should be within reach of all manufacturers of HD engines or HD vehicles that are currently allowed so that they can continue to sell their engines and vehicles while finishing their development of fully complying engines.  A manufacturer of a previously certified engine or vehicle should not be forced to immediately remove a HD engine or vehicle from the market when an emission standard becomes more stringent.  The prior emission standard generally meets these goals because manufactures have already certified their vehicles to that standard.  
EPA proposes to revise the regulations in 40 CFR 86.1104-91 to clarify that EPA may set the upper limit at a level below the previous standard if we determine that the lower level is achievable by all engines or vehicles in the relevant subclass.  This was the case for the vacated NCP rule.  EPA also proposes that we may set the upper limit at a level above the previous standard in unusual circumstances, such as where a new standard for a different pollutant or other requirement effectively increases the stringency of the standard for which NCPs would apply.  This occurred for heavy heavy-duty engines with the 2004 standards.
    (ii) Payment of Penalties
The proposed changes to 40 CFR 86.1113-87 correct EPA organizational units and mail codes to which manufacturers must send information.  The previous information is no longer valid.
  (c) Criteria for the Availability of NCPs
Since the promulgation of the first NCP rule in 1985, subsequent NCP rules generally have been described as continuing "phases" of the initial NCP rule.  The first NCP rule (Phase I), sometimes referred to as the "generic" NCP rule, established three basic criteria for determining the eligibility of emission standards for nonconformance penalties in any given model year (50 FR 35374, August 30, 1985).  (For regulatory language, see 40 CFR 86.1103-87).  The first criterion is that the emission standard in question must become more difficult to meet.  This can occur in two ways, either by the emission standard itself becoming more stringent, or due to its interaction with another emission standard that has become more stringent.  Second, substantial work must be required in order to meet the emission standard.  EPA considers "substantial work" to mean the application of technology not previously used in that vehicle or engine class/subclass, or a significant modification of existing technology, in order to bring that vehicle/engine into compliance.  EPA does not consider minor modifications or calibration changes to be classified as substantial work.  Third, EPA must find that a manufacturer is likely to be noncomplying for technological reasons (referred to in earlier rules as a "technological laggard").  Prior NCP rules have considered such a technological laggard to be a manufacturer who cannot meet a particular emission standard due to technological (not economic) difficulties and who, in the absence of NCPs, might be forced from the marketplace.  During the 2012 rulemaking, some commenters raised issues relating to EPA's interpretation of these criteria:
         * The extent to which the criteria are intended to constrain EPA's ability to set NCPs
         * The timing for evaluating the criteria
         * The meaning of technological laggard
    (i) Constraints on EPA
Several commenters argued (implicitly or explicitly) that EPA cannot establish NCPs unless all of the regulatory criteria for NCPs (in 40 CFR 86.1103-87) are met.  Some went further to argue that EPA must demonstrate that the criteria are met.  However, the actual regulatory text has never stated that EPA may establish NCPs only if all criteria are met, but rather that EPA shall establish NCPs "provided that EPA finds" the criteria are met.  These criteria were included in the regulations to clarify that manufacturers should not expect EPA to initiate a rulemaking to establish NCPs where these criteria were not met.  Moreover, the regulations clearly defer to EPA's judgment for finding that the criteria are met.  While EPA must explain the basis of our finding, the regulatory language does not require us to prove or demonstrate that the criteria are met.
This interpretation is consistent with the text of the Clean Air Act, which places no explicit restrictions on when EPA can set NCPs.  In fact, it seems to create a presumption that NCPs will be available.  The Act actually requires EPA to allow certification of engines that do not meet the standard unless EPA determines the practicable upper limit to be equal to the new emission standard.
To address this confusion, the new proposed regulatory text would explicitly state that where EPA cannot determine if all of the criteria have been met, we may presume that they have.  In other words, EPA does not have the burden to prove they have been met.
    (ii) Timing for Evaluating Criteria
In order to properly understand the appropriate timing for evaluating each of the NCP criteria, it is necessary to understand the purpose of each.  When considered together, these criteria evaluate the likelihood that a manufacturer will be technologically unable to meet a standard on time.  However, when EPA initially proposed the NCP criteria, we noted that the first two criteria addressed whether there was a possibility for a technological laggard to develop.   When the first criterion is met, it creates the possibility for a technological laggard to exist.  When manufacturers must perform substantial work, it is possible that at least one will be unsuccessful and will become a laggard.  Thus, when evaluating these first two criteria, the purpose is to determine whether the standard created the possibility for a laggard to exist.  The third criterion is different because it asks whether that possibility has turned into a likelihood that a technological laggard has developed.  For example, a standard may become significantly more stringent and substantial effort might be required for compliance, but all manufacturers may be meeting the applicable standard.  In that situation, a technological laggard is not likely and penalties would be unnecessary.
In this context, it becomes clear that since the first two of these criteria are intended to address the question of whether a given standard creates the possibility for this to occur, they are evaluated before the third criterion that addresses the likelihood that the possibility will actually happen.  In most cases, it is possible to evaluate these criteria at the point a new standard is adopted.  This is the value of these criteria, that they can usually be evaluated long before there is enough information to know whether a technological laggard is actually likely.  For example, where EPA adopts a new standard that is not technology-forcing, but rather merely an anti-backsliding standard, EPA could determine at the time it is adopted that the second criterion is not met so that manufacturers would know in advance that no NCPs will be made available for that standard.
One question that arose in the 2012 rule involved how to evaluate the second criterion if significant time has passed and some work toward meeting the standard has already been completed.  To address this question, the proposed regulations would clarify that this criterion is to be evaluated based on actual work needed to go from meeting the previous standard to meeting the current standard, regardless of the timing of such changes.  EPA looks at whether "substantial work" is or was required to meet the revised standard at any time after the standard was issued  -  the important question is whether manufacturers who were using technology that met the previous standard would need to build upon that technology to meet the revised standard.  Other interpretations would seem to be directly contrary to the purpose of the statute, which is designed to allow technological laggards to be able to certify engines even if other manufacturers have met the standard.  
    (iii) Technological Laggards
Questions also arose in 2012 about the meaning of the term "technological laggard".  While the regulations do not define "technological laggard", EPA has previously interpreted this as meaning a manufacturer who cannot meet the emission standard due to technological difficulties, not merely economic difficulties (67 FR 51464 - 51465, Aug. 8, 2002).  Some have interpreted this to mean that NCPs cannot be made available where a manufacturer tries and fails to meet a standard with one technology but knew that another technology would have allowed them to meet the standard.  In other words, that it made a bad business decision.  However, EPA's reference to "economic difficulties" applies where a technological path exists  -  at the time EPA is evaluating the third criterion  -  that would allow the manufacturer to meet the standard on time, but the manufacturer chooses not to use it for economic reasons.  The key question is whether or not the technological path exists at the time of the evaluation.  To address this confusion, the proposed regulations would clarify that where there is uncertainty about whether a failure to meet the standards is a technological failure, EPA may presume that it was.  Note that this does not mean that EPA might declare any failure to meet standards as a technological failure.  It would only apply where it is not clear.
     (1)  In-use Testing
EPA and manufacturers have gained substantial experience with in-use testing over the last four or five years.  This has led to important insights in ways that the test protocol can be adjusted to be more effective.  EPA is accordingly proposing to make the following changes to the regulations in 40 CFR part 86, subparts N and T:
* Revise the NTE exclusion based on aftertreatment temperature to associate the exclusion with the specific aftertreatment device that does not meet the temperature criterion.  For example, there should be no NOx exclusion if a diesel oxidation catalyst is below the temperature threshold.  EPA is also proposing to revise the exclusion to include accommodation of CO emissions when there is a problem with low temperatures in the exhaust.
* Clarify that exhaust temperatures should be measured continuously to evaluate whether those temperatures stay above the 250 °C threshold. 
* Add specifications to describe where to measure temperatures for exhaust systems with multiple aftertreatment devices.
* Revise the requirement to accumulate shift-hours for a valid test result.  The original approach required manufacturers to aim for three shift-hours of operation in the NTE zone in a day, with a second day required if that was not achieved. EPA agrees with manufacturers that two hours of NTE operation is sufficient for successful data collection, and that a second day of operation with the same vehicle is not likely to be successful if the first day involved insufficient NTE operation.  EPA is therefore proposing to drop the requirement for the second day of testing with such a vehicle.
* Include a provision to add 0.00042 g/hp-hr to the PM measurement to account for PM emissions vented to the atmosphere through the crankcase vent.
* Increase the time allowed for submitting quarterly reports from 30 to 45 days after the end of the quarter.
     (2)  Miscellaneous Amendments to 40 CFR Part 86
As described elsewhere, EPA is proposing to make several changes to 40 CFR part 86.  This includes primarily the GHG standards for Class 2b and 3 heavy-duty vehicles in subpart S.   EPA is also proposing changes related to hearing procedures, adjustment factors for infrequent regeneration of aftertreatment devices, and the testing program for heavy-duty in-use vehicles.  In addition, EPA is proposing to make several minor amendments to 40 CFR part 86, subpart A.  One of these amendments is to revise 40 CFR 86.1823 to extend the default catalyst thermal reactivity coefficient for Tier 2 vehicles to also apply for Tier 3 vehicles.  This change was inadvertently omitted from the recent Tier 3 rulemaking.  EPA is also interested in a broader review of the appropriate default value for the catalyst thermal reactivity coefficient.  EPA would be interested in reviewing any available data related to this issue.  In any case, EPA would plan to revisit this question in the future.  EPA is also proposing several amendments to remove obsolete text, update cross references, and streamline redundant regulatory text.  For example, paragraph (f)(3) of Appendix I includes a duty cycle for heavy-duty spark-ignition engines that is no longer specified as part of the certification process.
     (3)  Applying 40 CFR Part 1068 to Heavy-duty Highway Engines and Vehicles
As part of the Phase 1 standards, EPA applied the exemption and importation provisions from 40 CFR part 1068, subparts C and D, to heavy-duty highway engines and vehicles.  EPA also specified that the defect reporting provisions of 40 CFR 1068.501 were optional.  In an earlier rulemaking, EPA applied the selective enforcement auditing under 40 CFR part 1068, subpart E (75 FR 22896, April 30, 2010).  EPA is proposing in this rule to adopt the rest of 40 CFR part 1068 for heavy-duty highway engines and vehicles, with certain exceptions and special provisions.
40 CFR part 1068 captures a range of compliance provisions that are common across our engine and vehicle programs.  These regulatory provisions generally provide the legal framework for implementing a certification-based program.  40 CFR part 1068 works in tandem with the standard-setting part for each type of engine/equipment.  This allows EPA to adopt program-specific provisions for emission standards and certification requirements for each type of engine/equipment while taking a uniform approach to the compliance provisions that apply generally.  
Many of the provisions in 40 CFR part 1068 were originally written to align with the procedures established in 40 CFR part 85 and part 86.  EPA expects the following provisions from 40 CFR part 1068 to not involve a substantive change for heavy-duty highway engines and vehicles:
* Part 1068, subpart A, describes how EPA handles confidential information, how the Administrator may delegate decision-making within the agency, how EPA may enter manufacturers' facilities for inspections, what information manufacturers must submit to EPA, and how EPA may require testing or perform testing.  There is also a description of labeling requirements that apply uniformly for different types of engines/equipment.
* The prohibited acts, penalties, injunction provisions, and related requirements of 40 CFR 1068.101 and 1068.125 correspond to what is specified in Clean Air Act sections 203 through 207 (also see section 213(d)).
* 40 CFR 1068.103 describes how a certificate of conformity applies on a model-year basis.  With the exception of the stockpiling provisions in paragraph (f), as described below, these provisions generally mirror what already applies for heavy-duty highway engines.
* 40 CFR 1068.115 describes manufacturers' warranty obligations.  EPA is proposing to amend this section to more carefully conform to the warranty provisions in Clean Air Act section 207, as described below.  Note that EPA also includes a provision identifying the warranty requirements from Clean Air Act section 203(a)(4), which are specific to motor vehicles.
* 40 CFR 1068.120 describes requirements that apply for rebuilding engines.  This includes more detailed provisions describing how the rebuild requirements apply for cases involving a used engine to replace a certified engine.
* 40 CFR part 1068, subpart F, describes procedural requirements for voluntary and mandatory recalls.  As noted below, EPA is proposing to modify these regulations to eliminate a few instances where the part 1068 provisions differ from what is specified in 40 CFR part 86, subpart S.
* 40 CFR part 1068, subpart G, describes how EPA would hold a hearing to consider a manufacturer's appeal of an adverse compliance decision from EPA.  These procedures apply for penalties associated with violations of the prohibited acts, recall, nonconformance penalties, and generally for decisions related to certification.  As noted below, EPA is proposing to migrate these procedures from 40 CFR part 86, including an effort to align with EPA-wide regulations that apply in the case of a formal hearing.
Manufacturers are already required to use good engineering judgment in many cases related to certifying engines under 40 CFR part 86, Section 1068.5.
As noted above, the exemption provisions of 40 CFR part 86, subpart C, already apply for heavy-duty highway engines.  EPA is proposing to add a clarification that the exemption from the tampering prohibition for competition purposes does not apply to heavy-duty highway vehicles.  This aligns with the statutory provisions for the racing exemption.
EPA is proposing to require that manufacturers comply with the defect-reporting provisions in 40 CFR 1068.501.  Defect reporting under 40 CFR 1068.501 involves a more detailed approach for manufacturers to track possible defects and establishes thresholds to define when manufacturers must perform an investigation to determine an actual rate of emission-related defects.  These thresholds are scaled according to production volumes, which allows us to adopt a uniform protocol for everything from locomotives to lawn and garden equipment.  Manufacturers that also produce nonroad engines have already been following this protocol for several years.  These defect-reporting requirements are also similar to the rules that apply in California.  
40 CFR part 1068 includes a definition of "engine" to clarify that an engine becomes subject to certification requirements when a crankshaft is installed in an engine block.  At that point, a manufacturer may not ship the engine unless it is covered by a certificate of conformity or an exemption.  Most manufacturers have opted into this definition of "engine" as part of the replacement engine exemption as specified in 40 CFR 85.1714.  We are proposing to make this mandatory for all manufacturers.  A related provision is the definition of "date of manufacture", which we use to establish that an engine's model year is also based on the date of crankshaft installation.  To address the concern that engine manufacturers would install a large number of crankshafts before new emission standards start to apply as a means of circumventing those standards, we state in 40 CFR 1068.103(f) that manufacturers must follow their normal production plans and schedules for building engines in anticipation of new emission standards.  In addition to that broad principle, we state that we will consider engines to be subject to the standards for the new model year if engine assembly is not complete within 30 days after the end of the model year with the less stringent standards (a longer time frame applies for engines with per-cylinder displacement above 2.5 liters).  
40 CFR part 1068 also includes provisions related to vehicle manufacturers that install certified engines.  EPA states in 40 CFR 1068.105(b) that vehicle manufacturers are in violation of the tampering prohibition if they do not follow the engine manufacturers' emission-related installation instructions, we approve as part of the certification process.
40 CFR part 1068 also establishes that vehicles have a model year and that installing certified engines includes a requirement that the engine be certified to emission standards corresponding to the vehicle's model year.  An exception to allow for normal production and build schedules is described in 40 CFR 1068.105(a).  This "normal-inventory" allowance is intended to allow for installation of previous-tier engines that are produced under a valid certificate by the engine manufacturer shortly before the new emission standards start to apply.  Stockpiling such engines would be considered an unlawful circumvention of the new emission standards.  The range of companies and production practices is much narrower for heavy-duty highway engines and vehicles than for nonroad engines and equipment.  EPA is therefore proposing a further set of specifications to define or constrain engine-installation schedules that would be considered to fall within normal-inventory practices.  In particular, vehicle manufacturers are limited to three months of production, once new emission standards start to apply, to install previous-tier engines without EPA approval.  For any subsequent installation of previous-tier engines, EPA is proposing to require that vehicle manufacturers get EPA approval based on a demonstration that the excess inventory was a result of unforeseeable circumstances rather than circumvention of emission standards.  EPA is proposing that approval in those circumstances would be limited to a maximum of 50 engines to be installed for up to three additional months for a single vehicle manufacturer.  
The existing prohibitions and exemptions in 40 CFR part 1068 related to competition engines and vehicles need to be amended to account for differing policies for nonroad and motor vehicle applications.  In particular, we generally consider nonroad engines and vehicles to be "used solely for competition" based on usage characteristics.  This allows EPA to set up an administrative process to approve competition exemptions, and to create an exemption from the tampering prohibition for products that are modified for competition purposes.  There is no comparable allowance for motor vehicles.  A motor vehicle qualifies for a competition exclusion based on the physical characteristics of the vehicle, not on its use.  Also, if a motor vehicle is covered by a certificate of conformity at any point, there is no exemption from the tampering and defeat-device prohibitions that would allow for converting the engine or vehicle for competition use.  There is no prohibition against actual use of certified motor vehicles or motor vehicle engines for competition purposes; however, it is not permissible to remove a motor vehicle or motor vehicle engine from its certified configuration regardless of the purpose for doing so.
It is relatively straightforward to apply the provisions of 40 CFR part 1068 to all engines subject to the criteria emission standards in 40 CFR part 86, subpart A, and the associated vehicles.  Manufacturers of comparable nonroad engines are already subject to all these provisions.  Class 2b and 3 heavy-duty vehicles subject to criteria emission standards under 40 CFR part 86, subpart S, are covered by a somewhat different compliance program.  EPA is therefore proposing to apply the provisions of 40 CFR part 1068 only as described in the next section for light-duty vehicles, light-duty trucks, medium-duty passenger vehicles, and chassis-certified Class 2b and 3 heavy-duty vehicles.  
     (4)  Glider Kits
As noted in Sections III, and V the agencies are proposing not to exempt glider kits from the Phase 2 GHG emission and fuel consumption standards.   Gliders and glider kits are exempt from NHTSA's Phase 1 fuel consumption standards.  For EPA purposes, the CO2 provisions of Phase 1 in 40 CFR 1037.150 exempted gliders and glider kits produced by small businesses but did not include such a blanket exemption for other gliders and glider kits.  EPA is proposing to amend its rules applicable to engines installed in glider kits, a proposal which would affect emission standards not only for GHGs but for criteria pollutants as well.  NHTSA is also considering including gliders under its Phase 2 standards.  Finally, EPA believes glider manufacturers may not understand how existing EPA regulations apply to them, resulting in a number of uncertified vehicles.  Therefore, EPA is also proposing to clarify its requirements for certification and revise its definitions for glider manufacturers as described below.
  (d) Background under the Clean Air Act
EPA notes that under the anti-tampering provisions of the Clean Air Act, and EPA's regulatory requirements applicable to rebuilding engines (see 40 CFR 86.004-40), rebuilt engines must continue to comply with emissions standards applicable to the model year for which they were originally certified.  These regulations specifically apply to rebuilt engines independent of the vehicle into which they are installed or reinstalled. As a general matter, EPA has considered the question of whether the vehicle into which the rebuilt engine is installed is a "new motor vehicle" separately from the status of the engine.  The use of a rebuilt or other previously used engine in an otherwise newly manufactured vehicle (such as a glider kit) does not keep the vehicle from being "new" under the Clean Air Act.   Prior to MY 2014, EPA did not have separate (i.e., non-engine) standards for vehicles over 14,000 pounds GVWR.  However, EPA Phase 1 GHG vehicle standards apply for new MY 2014 and later vehicles over 14,000 pounds.  Thus, EPA generally considers glider kits to be subject to the Phase 1 vehicle standards.
However, with respect to engines installed in glider kits, an EPA Phase 1 provision in 40 CFR 1037.150(j) provided an exception allowing the use of used or rebuilt engines that were certified to model year 2013 or earlier (or model year 2015 or earlier for spark ignition engines).  The effect of this transition provision during Phase 1 was to allow glider kits to use engines not certified to meet the engine GHG or fuel consumption standards, although the glider kits were still required to have an EPA vehicle certificate with respect to GHG emissions.  In addition, another provision of Phase 1 in 40 CFR 1037.150(c) exempted gliders and glider kits produced by small businesses from the need to obtain a vehicle certificate, but did not include such a blanket exemption for other gliders and glider kits.  Thus, depending on the size of the business producing the glider kit, gliders and glider kits may currently be subject to the requirement to obtain a vehicle certificate prior to introduction into commerce as a new vehicle. 
  (e) Proposed Amendment to EPA Vehicle Standards.  
EPA is proposing to end both 40 CFR 1037.150 provisions.  EPA's proposed program would generally treat glider vehicles the same as other new vehicles.  As a result, glider vehicles would have to be certified to the Phase 2 vehicle standards, which (among other things) would require a fuel map for the actual engine in order to run GEM.  In other words, manufacturers producing glider kits would need to meet the applicable GHG vehicle standards and, as part of its compliance demonstration, would need to have a fuel map for each engine that would be used.  
EPA is proposing this provision because we believe there has been adequate time for glider manufacturers to transition to a compliance regime.  Moreover, as noted more fully below, with increased numbers of glider kits being produced, perpetuation of the interim exemption from Phase 1 would turn a transition provision into an on-going loophole.  Nevertheless, EPA is proposing to replace this provision with a limited allowance for small manufacturers.  
  (f) Proposed Change to EPA Engine Standards
EPA is also proposing to amend its rules to require that engines used in glider vehicles must be certified to the standards applicable to the calendar year in which assembly of the glider vehicle is completed.  This requirement would apply to all pollutants, and thus would encompass criteria pollutant standards as well as GHG standards.  Used or rebuilt engines could be used, as long as they had been certified to the same standards as apply for the calendar year of assembly.  For example, if assembly of a glider vehicle was completed in calendar year 2020, and the engine standards for model year 2020 were the same as for model years 2017 through 2019, then any model year 2017 or later engine could be used.
EPA is proposing to amend these rules because, with the advent in MY 2007 of more stringent HD diesel engine criteria pollutant standards, continuation of provisions allowing rebuilt and reused engines to meet earlier MY criteria pollutant standards results in unnecessarily high in use emissions.  GHG emissions from these engines also are controllable.  As more glider kits are produced, EPA believes that these emissions should be controlled to the same levels as other new engines. 
Since EPA has already justified the criteria pollutant emission standards for heavy duty diesel engines pursuant to CAA section 202 (a)(3)(C), it is not clear that any further justification for applying those standards to engines used in glider kits is needed.  The GHG engine standards for Phase 1 have likewise already been justified, and the proposed Phase 2 standards' justification is set out in Section II above.  If any further justification is required, EPA notes that the emission benefits of applying current criteria pollutant standards would be substantial, and at low cost.  Glider vehicle production is not being reported to EPA, and we cannot determine precisely how much of an emission impact these vehicles are having.  Nevertheless, since the current standards for NOx and PM are at least 90 percent lower than the most stringent previously applicable standards, we can be certain that the NOx and PM emissions of any glider vehicles using pre-2007 engines are at least ten times as high as emissions from equivalent vehicles being produced with brand new engines. Thus, each glider vehicle that is purchased instead of a new vehicle with a current MY engine results in significantly higher in-use emissions.  These impacts are being compounded by the increasing sales of these vehicles. Estimates provided to EPA indicate that production of glider vehicles has increased by an order of magnitude from what it was in the 2004-2006 time frame  -  from a few hundred each year to thousands.  While the few hundred glider vehicles produced annually in the 2004-2006 timeframe may have been produced for arguably legitimate purposes such as salvaging powertrains from vehicles otherwise destroyed in accidents, EPA believes the tenfold increase in glider kit production since the MY 2007 criteria pollutant emission standards took effect reflects an attempt to circumvent these more stringent standards and the Clean Air Act.  
The cost for manufacturers to comply with the vehicle-based GHG standards is similar for gliders as for other new vehicles.  Similar to EPA's analysis of emissions above, although we cannot precisely quantify the cost of complying with the proposed engine requirements for criteria pollutant standards because it is dependent on which engines would be used and which would have otherwise been used, EPA nevertheless believes that cost-effectiveness (dollars per ton) of the proposed requirement relative to any pre-2007 engine would be similar to the cost-effectiveness of the NOx and PM standards for current model year engines, which EPA has already found to be cost effective.          
The agencies (as well as the broader SBAR Panel) are, however, concerned about adverse economic impacts on small businesses that assemble gliders and build glider kits, and we recognize that production of a smaller number of gliders  by these small manufacturers may be appropriate for salvaged engines or other noncircumvention purposes.   Therefore, EPA is proposing a new provision that would preserve its regulatory status quo for existing small businesses, but cap annual production based on recent sales.  Thus, a limited number of glider kits produced by small businesses would not have to meet the GHG vehicle standards, and could use rebuilt or used engines provided those engines were certified to the year of the engine's manufacture.  For example, an existing small business that produced between 100 and 200 glider vehicles per year would be allowed to produce up to 200 glider vehicles per year under without having to certify them to the GHG standards, or re-certifying the engines to the now-applicable EPA standards for criteria pollutants and GHGs (so long as the engine is certified to criteria pollutant standards for the year of its manufacture). To be eligible for this provision, EPA is also proposing that no small entity could produce more than 300 glider vehicles in any given model year without certifying (or recertifying) to any  EPA standards.  EPA believes that this level reflects the upper end of the range of production that occurred before significant circumvention of the 2007 criteria pollutant standards began.  We request comment on the appropriate caps and on whether any other special provisions would be needed to accommodate glider kits.  
  (g) Lead Time for Amended Standards 
EPA is proposing that this requirement for gliders to meet engine and vehicle standards applicable to other new vehicles and engines take effect in MY 2018.  EPA believes this provides sufficient time to "permit the development and application of the requisite control measures" (CAA section 202 (a)(3)(D)) because compliant engines are available today, although manufacturers would need several months to change business practices to comply.  
  (h) Legal authority and Definitions under the Clean Air Act
With respect to statutory authority under the Clean Air Act, EPA notes first that it has broad authority to control all pollutant emissions from "any" rebuilt heavy duty engines (including engines beyond their statutory useful life).  See CAA section 202 (a)(3)(D).  EPA is to give "appropriate" consideration to issues of cost, energy, and safety in developing such standards, and to provide necessary lead time to implement those standards.  As noted above, if a used engine is placed in a glider kit, the engine would be considered a "new motor vehicle engine" because it is being used in a new motor vehicle (as explained in the following paragraph).  See CAA section 216 (3).  With respect to the vehicle-based GHG standards, there is no question that the completed glider is a "motor vehicle" under the Clean Air Act (as well as under NHTSA's safety provisions).    Some in the trucking industry have questioned whether a glider kit (without an engine) is a motor vehicle.  However, EPA considers glider kits to be incomplete motor vehicles, and EPA has the authority to regulate incomplete motor vehicles, including unmotorized chassis.  
Under the CAA, it is also important that "new" is determined based on legal title and does not consider prior use.  Thus, glider kits that have a new vehicle identification number (VIN) and new title are considered to be "new motor vehicles" even if they incorporate previously used components.  Note that EPA under the Clean Air Act would not consider the fact that a vehicle retained the VIN of the donor vehicle from which the engine was obtained determinative of whether or not the vehicle is new.  
The CAA also defines "manufacturer" to include any person who assembles new motor vehicles.  EPA is proposing to revise its regulatory definitions of these terms in 40 CFR 1036.801 and 1037.801 to more clearly reflect these aspects of the CAA definitions  -  that glider kits are "new motor vehicles", previously used engines (whether rebuilt or not) installed into glider kits are "new motor vehicle engines", and any person who completes assembly of a glider is a "manufacturer".  EPA also notes that under the existing 40 CFR 1037.620, glider kit assemblers would generally be considered to be secondary vehicle manufacturers.  That section, which EPA is proposing to redesignate as 40 CFR 1037.622, allows secondary vehicle manufacturers that have a valid certificate or exemption to receive incomplete vehicles (such as glider kits) from OEMs. 
  (i) Relation to NHTSA Fuel Efficiency Program 
As stated above, NHTSA is considering including gliders under its Phase 2 standards.  However, NHTSA may consider limiting the conditions for which manufacturers may use or qualify components as used.  NHTSA seeks comments from glider manufacturers on this consideration.  
We note that the agencies potentially having different policies for glider vehicles under the Phase 2 program would not result in significant disharmony between the NHTSA and EPA programs because of the small number of vehicles that would be involved.  EPA believes that its proposed changes would result in the glider market returning to the pre-2007 levels in which fewer than 1,000 glider vehicles would be produced in most years.  A large fraction of these vehicles would be exempted from EPA regulations because they would be produced by qualifying small businesses, and thus would be treated the same under EPA and NHTSA regulations.  Only non-exempt glider vehicles would be subject to different requirements under the NHTSA and EPA regulations.  However, this is unlikely to exceed a few hundred vehicles in any year, which would be few enough not to result in any meaningful disharmony between the two agencies.

B.  Applying the General Compliance Provisions of 40 CFR Part 1068 to Light-Duty Vehicles, Light-Duty Trucks, Chassis-certified Class 2b and 3 Heavy-Duty Vehicles and Highway Motorcycles
As described above, EPA is proposing to apply all the general compliance provisions of 40 CFR part 1068 to heavy-duty engines and vehicles.  EPA proposes to also apply the recall provisions and the hearing procedures from 40 CFR part 1068 for highway motorcycles and for all vehicles subject to standards under 40 CFR part 86, subpart S.  See the preceding section for a description of how the provisions from 40 CFR part 1068 compare to those in 40 CFR part 85 and part 86.
EPA also requests comment on applying the rest of the provisions from 40 CFR part 1068 to highway motorcycles and to all vehicles subject to standards under 40 CFR part 86, subpart S.  EPA particularly requests comment on applying the defect-reporting provisions in 40 CFR 1068.501 to these vehicles.  The general approach is to replace a fixed threshold of 25 defects as the basis for defect reporting with a scaled approach that would require defect reporting only after the manufacturer finds some larger number of actual emission-related defects.  The regulation calls for manufacturers to monitor possible emission-related defects as evidenced by warranty claims, in-use testing, and other indicators, and to start investigating for actual defects once possible defects exceed an established threshold.  The existing regulation in 40 CFR 1068.501 generally calls for investigating once possible defects exceed 5 to 10 percent of production, with a requirement to report defects if confirmed defects exceed a rate of 1 to 2 percent of production.  The percentage thresholds that apply for a given engine/vehicle model decrease with increasing production volumes.  This approach is similar to defect-reporting requirements that already apply in California.  Manufacturers may be interested in complying with a single set of defect-reporting provisions nationwide; EPA therefore also requests comment on simply requiring manufacturers to follow the California defect-reporting scheme for their EPA-certified vehicles.
Note that EPA is proposing to amend 40 CFR 85.1701 to specify that the exemption provisions apply to heavy-duty engines subject to regulation under 40 CFR part 86, subpart A.  This is intended to limit the scope of this provision so that it does not apply for Class 2b and 3 heavy-duty vehicles subject to standards under 40 CFR part 86, subpart S.  This change corrects and inadvertently broad reference to heavy-duty vehicles in 40 CFR 85.1701.
C.  Amendments to General Compliance Provisions in 40 CFR Part 1068
The general compliance provisions in 40 CFR part 1068 apply broadly too many different types of engines and equipment.  This section describes how EPA is proposing to amend these procedures to make various corrections and adjustments.  
     (1)  Hearing Procedures
EPA is proposing to update and consolidate its regulations related to formal and informal hearings in 40 CFR part 1068, subpart G.  This will allow us to rely on a single set of regulations for all the different categories of vehicles, engines, and equipment that are subject to emission standards.  EPA also made an effort to write these regulations for improved readability.  
The hearing procedures specified in 40 CFR part 1068 apply to the various categories of nonroad engines and equipment (along with the other provisions of part 1068).  EPA is proposing in this rule to apply these hearing procedures also to heavy-duty highway engines, light-duty motor vehicles, and highway motorcycles.  EPA believes there is no reason to treat any of these sectors differently regarding hearing procedures.
EPA is proposing an introductory section that provides an overview of requesting a hearing for all cases where a person or a company objects to an adverse decision by the agency.  In certain circumstances, as spelled out in the regulations, a person or a company can request a hearing before a Presiding Officer.  Statutory provisions require formal hearing procedures for administrative enforcement actions seeking civil penalties.  The Clean Air Act does not require a formal hearing for other agency decisions; EPA is therefore proposing to specify that informal hearing procedures apply for all such decisions.  
The introductory section also adds detailed provisions describing the requirements for submitting information to the agency in a timely manner.  These provisions accommodate current practices for electronic submission, distinguish between postal and courier delivery and provide separate requirements for shipments made from inside and outside the United States.  The specified deadlines are generally based on the traditional approach of a postmark determining whether a submission is timely or not.  Fax, e-mail and courier shipments are similarly specified as needing to be sent by close of business on the day of the deadline.  A different approach applies for shipments originating from outside the United States.  Because time in transit can vary dramatically, we are proposing to specify that foreign shipments need to be received in our office by the specified deadline to be considered timely.  Given the option to send documents by e-mail or by fax, EPA expects this approach would not pose any disadvantage to anyone making an appeal from outside the United States.
EPA is proposing to replace the current reference to 40 CFR 86.1853-01 for informal hearings with a full-text approach that captures this same material.  EPA attempted to write these proposed regulations in a way that would not change the underlying hearing protocol.  
The regulations currently reference the formal hearing procedures in 40 CFR 85.1807, which were originally drafted to apply to light-duty motor vehicles.  After we adopted the hearing procedures in 40 CFR 85.1807, EPA's Office of Administrative Law Judges finalized a set of regulations defining formal hearing procedures that were intended to apply broadly across the agency for appeals under every applicable statute.  See 40 CFR part 22, "Consolidated Rules of Practice Governing the Administrative Assessment of Civil Penalties and the Revocation/Termination or Suspension of Permits."  EPA is therefore revising the regulations in 40 CFR part 1068 to simply refer to these formal hearing procedures in 40 CFR part 22.  
     (2)  Miscellaneous Changes
EPA is also proposing to make numerous changes across 40 CFR part 1068 to correct errors, to add clarification, and to make adjustments based on lessons learned from implementing these regulatory provisions.  This includes the following proposed changes:
* §1068.1: Clarify applicability of part 1068 with respect to legacy parts (such as 40 CFR parts 89 through 94).
* §1068.20: Clarify that EPA's inspection activities do not depend on having a warrant or a court order.  As noted in the standard-setting parts, EPA may deny certification or suspend or revoke certificates if a manufacturer denies EPA entry for an attempted inspection or other entry.
* §1068.27: Clarify that EPA confirmatory testing may properly be performed before issuance of a certificate of conformity.  We are also making an addition to state that we may require manufacturers to give us any special components that are needed for EPA testing.
* §1068.30: Add definitions of "affiliated companies", "parent company", and "subsidiaries" to clarify how small-business provisions apply for a range of business relationships.
* §1068.30: Clarify that a manufacturer can be considered a certificate holder based on the current or previous model year (to avoid problems from having a gap between model years).
* §1068.30: Spell out contact information for the "Designated Compliance Officer" to clarify how manufacturers should submit information to the agency.  This includes e-mail addresses for the various sectors.
* §1068.32: Add discussion to establish the meaning of various terms and phrases for EPA regulations; for example, we distinguish between standards, requirements, allowances, prohibitions, and provisions.  EPA is also clarifying terminology with respect to singular/plural, inclusive lists, notes and examples in the regulatory text, and references to "general" or "typical" circumstances.  EPA also describes some of the approach to determining when "unusual circumstances" apply.  
* §1068.45: Allow manufacturers to use coded dates on engine labels; allow EPA to require the manufacturer to share information to read the coded information.
* §1068.45: Clarify that engine labels are information submissions to EPA.
* §§1068.101 and 1068.125: Update penalty amounts to reflect changes to 40 CFR part 19.
* §1068.101: Revise the penalty associated with the tampering prohibition to be an engine-based penalty, as opposed to assessing penalties per day of engine operation.  This correction aligns with Clean Air Act section 205.
* §1068.103: Clarify the process for reinstating certificates after suspending, revoking, or voiding.
* §1068.103: Clarify that the prohibition against "offering for sale" uncertified engines applies only for engines already produced.  It is not a violation to invite customers to buy engines as part of an effort to establish the economic viability of producing engines, as would be expected for market research.
* §1068.105: Require documentation related to "normal inventory" for stockpiling provision.  EPA is also clarifying that there is no specific deadline associated with producing "normal-inventory" engines under this section, but emphasizing that vehicle/equipment manufacturers may not delay engine installation beyond their normal production schedules.  EPA is also clarifying that the allowance related to building vehicles/equipment in the early part of a model year, before the start of a new calendar year corresponding to new emission standards, applies only in cases where vehicle/equipment assembly is complete before the start of the new calendar year.  This is intended to prevent manufacturers from circumventing new standards by initiating production of large numbers of vehicles/equipment for eventual completion after new standards have started to apply.
* §1068.115: Clarify warranty provisions to align with statute.
*  §1068.120: Describe how the rebuilding provisions apply in the case of engine replacements where the new and old engines are subject to standards under different standard-setting parts (such as switching from spark-ignition to compression-ignition nonroad engines). 
* §1068.201: Describe how someone may sell an engine under a different exemption than was originally intended or used.
* §1068.210: Remove the requirement for companies getting approval for a testing exemption to send us written confirmation that they meet the terms and conditions of the exemption.  We do not believe this submission is necessary for implementing the testing exemption.
* §1068.220: Add description of how we might approve engine operation under the display exemption.  This is intended to more carefully address circumstances in which engine operation is part of the display function in question.  We would want to consider a wide range of factors in considering such a request; for example, we could be more inclined to approve a request for a display exemption if the extent of operation is very limited, or if the engine/equipment has emission rates that are comparable to what would apply absent the exemption. EPA is also removing the specific prohibition against generating revenue with exempted engines/equipment, since this has an unclear meaning and we can take any possible revenue generation into account in considering whether to approve the exemption on its merits.
* §1068.230: Add provision allowing for engine operation under the export exemption only as needed to prepare it for export (this has already been in place in part 85, and in part 1068 for engines/equipment imported for export).
* §1068.235: Clarify that the standard-setting part may set conditions on an exemption for competition engines/equipment.
* §1068.240: Describe the logistics for identifying the disposition of engines being replaced under the replacement engine exemption.  In particular, manufacturers would need to identify the disposition of each engine by the due date for the report under §1068.240(c) to avoid counting them toward the production limit for untracked replacement engines.  We are proposing to delay the due date for the report until September 30 following the production year to allow more time for manufacturers to make these determinations.
* §1068.240: Clarify the relationship between paragraphs (d) and (e).
* §1068.250: Simplify the deadline for requesting small-volume hardship.
* §1068.255: Clarify that hardship provisions for equipment manufacturers are not limited to small businesses, and that a hardship approval is generally limited to a single instance of producing exempt equipment for up to 12 months.
* §1068.260: State that manufacturers shipping engines without certain emission-related components need to identify the unshipped components either with a performance specification (where applicable) or with specific part numbers.  We are also listing exhaust piping before and after aftertreatment devices as not being emission-related components for purposes of shipping engines in a certified configuration.
* §1068.262: Revise text to align with the terminology and description adopted for similar circumstances related to shipment of incomplete heavy-duty vehicles under 40 CFR part 1037.
* §1068.305: Remove the provision specifying that individuals may need to submit taxpayer identification numbers as part of a request for an exemption or exclusion for imported engines/equipment.  We do not believe this information is necessary for implementing the exemption and exclusion provisions.
* §1068.315: Allow for destroying engines/equipment instead of exporting them under the exemption for importing engines/equipment for repairs or alterations.
* §1068.315: Remove the time constraints on approving extensions to a display exemption for imported engines/equipment.  EPA would continue to expect the default time frame of one year to be appropriate, and extension of one to three years is sufficient for most cases; however, we are aware that there are occasional circumstances calling for a longer-term exemption.  For example, an engine on display in a museum might appropriately be exempted indefinitely once its place in a standing exhibition is well established.
* §1068.315: Specify that engines under the ancient engine exemption must be substantially in the original configuration.
* §1068.360: Clarify the provisions related to model year for imported products by removing a circularity regarding "new" engines and "new" equipment.
* §1068.401: Add explicit statement that SEA testing is at manufacturer's expense.  This is consistent with current practice and the rest of the regulatory text.
* §1068.401: Allow for requiring manufacturers other than the certificate holder to perform selective enforcement audits in cases where multiple manufacturers are cooperatively producing certified engines.
* §1068.401: State that SEA non-cooperation may lead to suspended or revoked certificate (like production-line testing).
* §1068.415: Set up new criteria for lower SEA testing rate based on engine power to allow for a reduced testing rate of one engine per day only for engines with maximum engine power above 560 kW, but keep the allowance to approve a lower testing rate; that may be needed, for example, if engine break-in (stabilization) and testing are performed on the same dynamometer.  EPA believes it is more appropriate to base reduced testing rates on engine characteristics rather than sales volumes, as has been done in the past.
* §1068.415: Revise the service accumulation requirement to specify a maximum of eight days for stabilizing a test engine.  This is necessary to address a situation where an engine operates only six hours per day to achieve stabilization after well over 50 hours.  For such cases, we would expect manufacturers to be able to run engines much more than six hours per day.  As with testing rates, manufacturers may ask for our approval to use a longer stabilization period if circumstances don't allow them to meet the specified service accumulation targets. 
* §1068.501, and Appendix I: Clarify that "emission-related components" include components whose failure would commonly increase emissions (not might increase), and whose primary purpose is to reduce emissions (not sole purpose); current regulations are not consistent.
* §1068.501: Add "in-use testing" to list of things to consider for investigating potential defects.
* §1068.505: Clarify that manufacturers subject to a mandatory recall must remedy noncompliant target vehicles without regard to their age or mileage at the time of repair, consistent with provisions that already apply under 40 CFR part 85.
* §1068.505: Revise the requirement for submitting a remedial report from a 60-day maximum to a 45-day minimum (or 30-day minimum in the event of a hearing). This adjusted approach already applies to motor vehicles under 40 CFR part 85.
* §1068.515: Clarify an ambiguity to require that manufacturers identify the facility where repairs or inspections are performed.
* §1068.530: Specify that recall records must be kept for five years, rather than three years.  This is consistent with longstanding recall policy for motor vehicles and motor vehicle engines under 40 CFR part 85.
Manufacturers and equipment operators have raised an additional question about how the regulations apply for replacement engines where the replacement engine is of a different type than the engine being replaced.  For example, someone operating a piece of industrial equipment may want to replace an old spark-ignition engine with a compression-ignition engine (or vice versa).  The replacement engine could be freshly manufactured, or it may have already been placed into service.  The tampering prohibition would generally disallow "disabling emission controls," but regulations do not directly address how this applies relative to the multiple emission standards that apply.  It is important to note that the standard-setting part often specifies that a used replacement engine becomes new (and subject to certification requirements) if it is installed in a piece of equipment from a different category.  For example, installing a used heavy-duty highway engine in land-based nonroad equipment would make the engine "new" and subject to certification requirements as a nonroad engine.  This does not apply for spark-ignition engines and compression-ignition engines installed in heavy-duty highway vehicles, or for spark-ignition engines and compression-ignition engines installed in land-based nonroad equipment.  We request comment on the best approach to delineating how the tampering prohibition should apply for these scenarios.
D.  Amendments to Light-Duty Greenhouse Gas Program Requirements
EPA is proposing to make minor changes to correct errors and clarify regulations in 40 CFR part 86, subpart S, and part 600 relating to EPA's light-duty greenhouse gas emission standards. This includes the following proposed changes:
* §86.1: Make corrections to references in paragraphs (b)(1), (b)(10), (b)(11), and (e)(5).
* §86.1818-12: Correct a reference in paragraph (c)(4) and clarify that CO2-equivalent debits for N2O and CH4 are calculated in Megagrams and rounded to the nearest whole Megagram.
* §86.1838-01: Correct references in paragraph (d)(3)(iii).
* §86.1845-04: In paragraph (c)(5)(iv) insert the phrase "and refueling emission procedures" that had been unintentionally dropped by a previous regulation. 
* §86.1866-12: Correct a reference in paragraph (b). 
* §86.1868-12: Clarify language in the introductory paragraph explaining the model years of applicability of different provisions for air conditioning efficiency credits. In paragraph (e)(5) clarify that the engine-off specification of 2 minutes is intended to be cumulative time. In paragraphs (f)(1), (g)(1), and (g)(3), clarify language by pointing to the definitions in §86.1803-01.
* §86.1869-12: Make corrections to the language for readability in paragraph (b)(2). In paragraph (b)(4)(ii) delete the phrase "backup/reverse lights" because these lights were not intended to be part of the stated eligibility criteria for high-efficiency lighting credits. Correct references in paragraph (f).  
* §86.1870-12: Add language that clarifies that a manufacturer that meets the minimum production volume thresholds with a combination of mild and strong hybrid electric pickup trucks is eligible for credits. 
* §86.1871-12: Clarify that credits from model years 2010-2015 are not limited to a life of 5 model years.  A recent rule extended the life of 2010-2015 credits to model year 2021; thus, language referring to a 5-year life for emission credits generated in these model years is being removed or revised.
* §600.113-12: Correct language in paragraph (m)(1), which relates to vehicles operating on LPG, that erroneously refers to methanol and methanol-fueled.  
* §600.113-12: Correct references in paragraph (n) and add a new paragraph (m) that reinstates language mistakenly dropped by a previous regulation. 
* §600.208-12: Correct a reference in paragraph (a)(2)(iii).
* §600.210-12: Correct a reference and text in paragraph (c)(2)(iv)(C). 
   
E.  Amendments to Highway and Nonroad Test Procedures and Certification Requirements
     (1)  Testing with Aftertreatment Devices Involving Infrequent Regeneration
Manufacturers generally rely on selective catalytic reaction and diesel particulate filters to meet EPA's emission standards for highway and nonroad compression-ignition engines.  These emission control devices typically involve infrequent regeneration, which can have a significant effect on emission rates.  EPA has addressed that for each engine type by provisions for infrequent regeneration factors; this is a calculation methodology that allows manufacturers to incorporate the effect of infrequent regeneration into reported emission values whether or not that regeneration occurs during an emission test.  EPA adopted separate provisions for highway, locomotive, marine, and land-based nonroad compression-ignition engines.  EPA is proposing to harmonize the common elements of these procedures in 40 CFR part 1065, and to add clarifying specifications in each of the standard-setting parts for sector-specific provisions.
     (2)  Mapping for Constant-Speed Engines under 40 CFR Part 1065
EPA is proposing to revise this section as it applies to the two-point mapping method for certain constant-speed engines.  The regulations currently cite a performance parameter in ISO 8528-5 that does not apply for the design of these engines.
Common practice for engines that produce electric power is to use an isochronous governor for stand-alone generator sets.  In some parallel operations of multiple generator sets, droop is added as a method for load sharing.  The amount of droop can be tuned by the generator set manufacturer or the site system integrator.  Such engines are commonly tested on an engine dynamometer with the isochronous governor.
Mapping with just two points works well for the case of 0 percent droop (i.e. isochronous governor).  For this case, a persistent speed error is forced on the engine governor on the second point and this will cause the governor to wind up to its maximum command.  The second point is effectively operating on the torque curve instead of the isochronous governor.  So, the second point captures the full fueling torque (plus a small amount due to any rising torque curve).  This measured torque is used as the maximum test torque for computing the emission test points.  Since there is no designed-in droop, some target amount of speed error is needed for the second point.  The regulation at 40 CFR 1065.510(d)(5)(iii) currently has a default target speed on the second point of 97.5 percent of the no-load speed measured on the first point.  This results in a persistent speed error of 2.5 percent of the no-load speed.  For an 1800 rpm no-load speed, this would give a target speed of 1755 rpm and a 45 rpm speed error on an isochronous governor.  If the engine has a torque rise of 20 percent from 1800 to 1200 rpm (0.0333 percent torque rise per rpm), this 45 rpm error will cause a 1.5 percent of point error in the determination of the intended maximum test torque.  This error is larger than desired for this type of testing.  Fortunately, engines and test cells have sufficient speed resolution to select a lower speed error, which reduces this error in maximum test torque.  In practice, testing with a speed error at or below 0.5 percent is more than adequate to cause the isochronous governor to wind up to maximum fueling.  Using a target speed of 99.5 percent on the second point gives a target speed of 1791 rpm for an 1800 rpm no-load speed and will reduce the error on the maximum test torque to a reasonable 0.3 percent of point for the 20 percent torque rise case described above.
For governors with droop, if we attempt the two-point method, we would have to calculate a target speed for the second point based on a designed amount of droop.  Unfortunately, the actual governor may not have the same amount of droop as the design droop, which may cause error in the measured torque versus the maximum test torque associated with a complete torque map.  Also, the design droop may be based on a torque value that is different from the intended maximum test torque.  Thus, the two-point method is not sufficient to yield a maximum test torque equivalent to the value that would be obtained using a multi-point map. Also the allowed speed error on the second point is 20 percent of the speed droop, which allows an unacceptably large error in the maximum test torque.
Thus, for the reasons listed, we are proposing to limit the two-point mapping method to any isochronous governed engines, not just engines used to generate electric power.
     (3)  Calculating Maximum and Intermediate Test Speeds under 40 CFR Part 1065
EPA is proposing to improve the method for calculating maximum and intermediate test speeds by applying a more robust calculation method.  The new calculation method would be consistent with the methodology used for the maximum test torque determination, which we revised in our light-duty Tier 3 rulemaking.  Under the current regulations, the result is a measured maximum test torque at one of the map points.  The proposed calculation method involves interpolation to determine the measured maximum test torque, yielding a more representative maximum test torque lbs. 
     (4)  Hydrocarbon Measurements
EPA is proposing to revise 40 CFR part 1065 to allow manufacturers to use NMOG measurements to demonstrate compliance with NMHC standards.  
F.  Amendments Related to Nonroad Diesel Engines in 40 CFR Part 1039
EPA is proposing two changes to 40 CFR 1039.5 to clarify the scope and applicability of standards under 40 CFR part 1039.  First, EPA is stating that engines using the provisions of 40 CFR 1033.625 for non-locomotive-specific engines remain subject to certification requirements as nonroad diesel engines under 40 CFR part 1039.  Such engines would need to be certified as both locomotive engines and as nonroad diesel engines.  Second, EPA is proposing to revise the statement about how manufacturers may certify under 40 CFR part 1051 for engines installed in recreational vehicles (such as all-terrain vehicles or snowmobiles).  EPA is proposing to remove text that might be interpreted to mean that there are circumstances in which certification under neither part is required.  The proper understanding of EPA's policy in that regard is that certification under one part is a necessary condition for being exempted from the other part.  
In 2008, EPA adopted a requirement in 40 CFR part 1042 for manufacturers to design marine diesel engines using selective catalytic reduction with basic diagnostic functions to ensure that these systems were working as intended (73 FR 37096, June 30, 2008).  EPA is proposing to apply those same diagnostic control requirements to nonroad diesel engines regulated under 40 CFR part 1039.  This addresses the same fundamental concern that engines would not be controlling emissions consistent with the certified configuration if the engine is lacking the appropriate quantity and quality of reductant.  While some lead time would be needed to make the necessary modifications, we believe it will be straightforward to apply the same designs from marine diesel engines to land-based nonroad diesel engines.  EPA is accordingly proposing that manufacturers meet the proposed diagnostic specifications starting with model year 2018.    These diagnostic controls would not affect the current policy related to adjustable parameters and inducements related to selective catalytic reduction.  EPA requests comment on adding these diagnostic requirements for nonroad diesel engines.
EPA is proposing to make numerous changes across 40 CFR part 1039 to correct errors, to add clarification, and to make adjustments based on lessons learned from implementing these regulatory provisions.  This includes the following proposed changes:
* §1039.2: Add a clarifying note to say that something other than a conventional "manufacturer" may need to certify engines that become new after being placed into service (such as engines converted from highway or stationary use).  This is intended to address a possible assumption that only conventional manufacturers can certify engines.  
* §§1039.30, 1039.730, and 1039.825: Consolidate information-collection provisions into a single section.
* §1039.107: Remove the reference to deterioration factors for evaporative emissions, since there are no deterioration factors for demonstrating compliance with evaporative emission standards.
* §1039.120: Reduce extended-warranty requirements to warranties that are actually provided to the consumer, rather than to any published warranties that are offered.  The principle is that the emission-related warranty should not be less effective for emission-related items than for items that are not emission-related.
* §1039.125: Allow for special maintenance procedures that address low-use engines.  For example, owners of recreational marine vessels may need to perform engine maintenance after a smaller number of hours than would otherwise apply based on the limited engine operation over time.
* §1039.125: Add fuel-water separator cartridges as an example of a maintenance item that is not emission-related. 
* §1039.135: Allow for including optional label content only if the manufacturer does not opt to omit other information based on limited availability of space on the label, and identify counterfeit protection as an additional item that manufacturers may include on the label.
* §1039.201: Clarify that manufacturers may amend their application for certification after the end of the model year in certain circumstances, but they may not produce engines for a given model year after December 31 of the named year.
* §1039.201: Establish that manufacturers may deliver to EPA for testing an engine that is identical to the test engine used for certification.  This may be necessary if the test engine has accumulated too many hours, or if it is unavailable for any reason.
* §1039.205: Replace the requirement to submit data from invalid tests with a requirement to simply notify EPA in the application for certification if test was invalidated.  
* §1039.205: Add a requirement for manufacturers to include in their application for certification a description of their practice for importing engines, if applicable.  We are also proposing to require manufacturers of engines below 560 kW to name a test lab in the United States for the possibility of us requiring tests under a selective enforcement audit.  We have adopted these same requirements in many of our other nonroad programs.
* §1039.225: Clarify that manufacturers may amend the application for certification after the end of the model year only in certain circumstances, and not to add a new or modified engine configuration.
* §§1039.235, 1039.240, and 1039.601: Describe how to demonstrate compliance with dual-fuel and flexible-fuel engines.  This generally involves testing with each separate fuel, or with a worst-case fuel blend.  
* §1039.240: Add instructions for calculating deterioration factors for sawtooth deterioration patterns, such as might be expected for periodic maintenance, such as cleaning or replacing diesel particulate filters.
* §1039.240: Remove the instruction related to calculating NMHC emissions from measured THC results, since this is addressed in 40 CFR part 1065.
* §1039.250: Remove references to routine and standard tests, and remove the shorter recordkeeping requirement for routine data (or data from routine tests).  All test records must be kept for eight years.  With electronic recording of test data, there should be no advantage to keeping the shorter recordkeeping requirement for a subset of test data.  EPA also notes that the eight-year period restarts with certification for a new model year if the manufacturer uses carryover data.
* §1039.255: Clarify that rendering information false or incomplete after submitting it is the same as submitting false or incomplete information.  For example, if there is a change to any corporate information or engine parameters described in the manufacturer's application for certification, the manufacturer must amend the application to include the new information.
* §1039.255: Clarify that voiding certificates for a recordkeeping or reporting violation would be limited to certificates that relate to the particular recordkeeping or reporting failure.
* §1039.505: Correct the reference to the ISO C1 duty cycle for engines below 19 kW.
* §1039.515: Correct the cite to 40 CFR 86.1370.
* §§1039.605 and 1039.610: Revise the reporting requirement to require detailed information about the previous year, rather than requiring a detailed projection for the year ahead.  The information required in advance would be limited to a notification of plans to use the provisions of these sections.
* §1039.640: Migrate engine branding to §1068.45.
* §1039.701 1039.730: Describe the process for retiring emission credits.  This may be referred to as donating credits to the environment.
* §1039.705: Change terminology for counting engines from "point of first retail sale" to "U.S.-direction production volume."  This conforms to the usual approach for calculating emission credits for nonroad engines.  
* §1039.710: Clarify that it is not permissible to show a proper balance of credits for a given model by using emission credits from a future model year.
* §1039.730: Clarify terminology for ABT reports.
* §1039.740: Clarify that the averaging-set provisions apply for credits generated by Tier 4 engines, not for credits generated from engines subject to earlier standards that are used with Tier 4 engines.
* §1039.801: Update the contact information for the Designated Compliance Officer.
* §1039.801: Revise the definition of "model year" to clarify that the calendar year relates to the time that engines are produced under a certificate of conformity.
* §1039.815: Migrate provisions related to confidential information to 40 CFR part 1068.
EPA requests comment on removing regulatory provisions for Independent Commercial Importers in 40 CFR part 1039.  These provisions, copied from highway regulations many years ago, generally allow for small businesses to modify small numbers of uncertified products to be in a certified configuration using alternative demonstration procedures.  We are not aware of anyone using these provisions for nonroad engines in the last 15 years or more.  We are therefore interested in considering these provisions to be obsolete, in which case they can be removed without consequence.
G.  Amendments Related to Marine Diesel Engines in 40 CFR Part 1042
EPA's emission standards and certification requirements for marine diesel engines under the Clean Air Act are identified in 40 CFR part 1042.  
     (1)  Continuous NOx Monitoring and On-off Controls
Manufacturers may produce certain marine diesel engines with on-off features that disable NOx controls when the ship is operating outside of a designated Emission Control Area (ECA) as long as certain conditions are met (§1042.115(g)). This provision, which applies to Category 3 engines meeting EPA Tier 3 standards, is intended to address the special operating conditions posed by an ECA and allows a ship that operates in and out of designated ECAs to downgrade engine NOx emission controls while the ship is operating outside of a designated ECA.  This provision also applies for Tier 4 NOx standards for those Category 1 and Category 2 auxiliary engines on Category 3 vessels covered by §1042.650(d); this provision does not apply to any other auxiliary engines or to any non-Category 3 propulsion engines.  Engines with allowable on-off controls must be certified to meet the previous tier of NOx standards when the advanced NOx control strategies are disabled (note that this would be Tier 2 for auxiliary engines as well as Category 3 engines, pursuant to 1042.650(d)).
Engines with on-off NOx controls are required to be equipped to continuously monitor NOx concentrations in the exhaust (§1042.110(d)).  EPA has been asked to clarify what "continuous" means in the context of this requirement.  Because the purpose of this requirement is to show that the engine complies with the NOx emission limits on a continuous basis, continuous monitoring must be frequent enough to demonstrate that the NOx controls are on and are properly functioning from the time the ship enters the ECA until it leaves, which, depending on the ECA and the ship's itinerary, could be a matter of hours or days.  Since many manufacturers equip their emission control systems with NOx sensors to monitoring and log the performance of the combined engine and emission control system, we are proposing that continuous monitoring means measuring NOx emissions at least every 60 seconds.  EPA is also proposing that a manufacturer may request approval of an alternative measurement period if that is necessary for sufficiently accurate measurements.  With regard to the functioning of continuous NOx monitoring, the continuous emission measurement device would be required to be included as part of the engine system for EPA certification.  Continuous NOx monitoring would be required to be engaged before the ship enters an ECA and continue until after it exits the ECA. Verification of operation of the system would be included in required periodic vessel surveys and certification that cover nearly all commercial U.S. vessels.  Enforcement is expected to be performed on a periodic basis by appropriate authorities when a ship is in port.
It should be noted that the above provisions with respect to on-off controls and continuous emission monitoring do not apply for the 40 CFR part 1042 PM standards. Engines certified to standards under 40 CFR part 1042 must meet the PM limits at all times, except when the operator has applied for and received permission to disable Tier 4 PM controls while operating outside the United States pursuant to any of the provisions of 40 CFR 1042.650 (a) through (c).
     (2)  Category 1 and Category 2 Auxiliary Engines on Category 3 Vessels
The regulation at 40 CFR 1042.650(d) exempts auxiliary Category 1 and Category 2 engines installed on U.S.-flag Category 3 vessels from the part 1042 standards if those auxiliary engines meet four conditions:  (1) they must comply with and certified to the Annex VI engine NOx limits in 40 CFR part 1043; (2) they may not be used for propulsion (except in an emergency); (2) the engine is subject to the provisions that apply for on-off controls; and (4) the engine must be properly labeled.
EPA is proposing to revise the regulations to clarify that the urea reporting requirements in § 1042.660(b) (which requires an owner or operator of any vessel equipped with SCR to report to EPA within 30 days of any operation of such vessel without the appropriate reductant) also apply to Category 1 and Category 2 auxiliary engines on Category 3 vessels that are covered by § 1042.650(d).  This will extend the urea reporting requirements to engines between 130 and 600 kW if they rely on SCR to meet the Annex VI Tier III NOx limits.  We are also revising our regulations to clarify that the other compliance provisions of 40 CFR part 1042 also apply to these Category 1 and Category 2 auxiliary engines on Category 3 vessels, including the tampering and other compliance provisions contained in part 1042, subpart G, and the remanufacture program contained in part 1042, subpart I.  Engines that are covered by §1043.650(d) would be subject to emission standards and testing requirements under MARPOL Annex VI and the NOx Technical Code.
EPA is also proposing to revise 40 CFR 1042.650(d) to clarify that, while these Category 1 and Category 2 auxiliary engines may be designed with on-off NOx controls, they must be certified to meet IMO Tier II NOx standards anytime the IMO Tier III NOx configuration is disabled.
     (3)  Natural Gas Marine Engines
EPA is also proposing to expand provisions that apply for marine engines designed to operate on both diesel fuel and natural gas.  Test requirements apply separately for each "fuel type".  EPA generally considers an engine with a single calibration strategy that combines an initial pilot injection of diesel fuel to burn natural gas to be a single fuel type.  This applies even if the natural gas portion must be substantially reduced or eliminated to maintain proper engine operation at light-load conditions.  If the engine has a different calibration allowing it to run only on diesel fuel, or on continuous mixtures of diesel fuel and natural gas, we would consider it to be a dual-fuel engine or a flexible-fuel engine, respectively.  These terms are used consistently across EPA programs for highway and nonroad applications.  There is an effort underway to revise the definition of "dual-fuel" in MARPOL Annex VI, which may be different than EPA's definition.  It should be noted that the 40 CFR part 1042 certification testing requirement differs from that specified in MARPOL Annex VI and the NOx Technical Code.  While the international protocol involves testing only on the engine calibration with the greatest degree of diesel fuel, EPA certification requires manufacturers to perform testing on each separate fuel type.  This would involve one set of tests with natural gas (with or without a diesel pilot fuel, as appropriate), and an additional set of tests with diesel fuel alone.  This has been required since we first adopted standards, and this is the same policy that applies across all our emission control programs.  EPA also proposes to include amended regulatory language to more carefully describe these testing requirements, and to specify how this applies differently for dual-fuel and flexible-fuel engines.
     (4)  Miscellaneous Amendments
EPA is proposing to make numerous changes across 40 CFR part 1042 to correct errors, to add clarification, and to make adjustments based on lessons learned from implementing these regulatory provisions.  This includes the following proposed changes:
* §1042.1: Correct the tabulated applicability date for engines with per-cylinder displacement between 7 and 15 liters; this should refer to engines "at or above" 7 liters, rather than "above 7 liters".  
* §1042.1: Replace an incorrect reference to 40 CFR part 89 with a reference to 40 CFR part 94 for marine engines above 37 kW.
* §1042.2: Add a clarifying note to say that something other than a conventional "manufacturer" may need to certify engines that become new after being placed into service (such as engines converted from highway or stationary use).  This is intended to address a possible assumption that only conventional manufacturers can certify engines.  
* §§1042.30, 1042.730, and 1042.825: Consolidate information-collection provisions into a single section.
* §1042.101: Revise the text to more carefully identify engine subcategories and better describe the transition between Tier 3 and Tier 4 standards.  These changes are intended to clarify which standards apply and are not intended to change the emission standards for any particular size or type of engine. 
* §1042.101 and Appendix III: More precisely define applicability of specific NTE standards for different types of engines and pollutants; correct formulas defining NTE zones and subzones; and add clarifying information to identify subzone points that could otherwise be derived from existing formulas.  None of these changes are intended to change the standards, test procedures, or other policies for implementing the NTE standards.
* §1042.101: Clarify the FEL caps for certain engines above 3700 kW.
* §1042.101: Add a specification to define "continuous monitor" for parameters requiring repeated discrete measurements, as described above.  The proposal also includes further clarification on the relationship between on-off NOx controls and engine diagnostic systems.
* §1042.120: Reduce extended-warranty requirements to warranties that are actually provided to the consumer, rather than to any published warranties that are offered.  The principle is that the emission-related warranty should not be less effective for emission-related items than for items that are not emission-related.
* §1042.125: Allow for special maintenance procedures that address low-use engines.  For example, owners of recreational marine vessels may need to perform engine maintenance after a smaller number of hours than would otherwise apply based on the limited engine operation over time.
* §1042.135: Clarify that ULSD labeling is required only for engines that use sulfur-sensitive technology.  If an engine can meet applicable emission standards without depending on the use of ULSD, the manufacturer should not be required to state on the engine that ULSD is required.
* §1042.135: Allow for including optional label content only if the manufacturer does not opt to omit other information based on limited availability of space on the label.
* §1042.201: Clarify that manufacturers may amend their application for certification after the end of the model year in certain circumstances, but they may not produce engines for a given model year after December 31 of the named year.
* §1042.201: Establish that manufacturers may deliver to EPA for testing an engine that is identical to the test engine used for certification.  This may be necessary if the test engine has accumulated too many hours, or if it is unavailable for any reason.
* §§1042.205 and 1042.840: Replace the requirement to submit data from invalid tests with a requirement to simply notify EPA in the application for certification if test was invalidated.  
* §1042.225: Clarify that manufacturers may amend the application for certification after the end of the model year only in certain circumstances, and not to add a new or modified engine configuration.
* §§1042.235, 1042.240, and 1042.601: Describe how to demonstrate compliance with dual-fuel and flexible-fuel engines.  This generally involves testing with each separate fuel, or with a worst-case fuel blend.  
* §1042.240: Add instructions for calculating deterioration factors for sawtooth deterioration patterns, such as might be expected for periodic maintenance, such as cleaning or replacing diesel particulate filters.
* §1042.250: Remove references to routine and standard tests, and remove the shorter recordkeeping requirement for routine data (or data from routine tests).  All test records must be kept for eight years.  With electronic recording of test data, there should be no advantage to keeping the shorter recordkeeping requirement for a subset of test data.  EPA also notes that the eight-year period restarts with certification for a new model year if the manufacturer uses carryover data.
* §1042.255: Clarify that rendering information false or incomplete after submitting it is the same as submitting false or incomplete information.  For example, if there is a change to any corporate information or engine parameters described in the manufacturer's application for certification, the manufacturer must amend the application to include the new information.
* §1042.255: Clarify that voiding certificates for a recordkeeping or reporting violation would be limited to certificates that relate to the particular recordkeeping or reporting failure.
* §1042.302: Clarify that manufacturers may fulfill the requirement to test each Category 3 production engine by performing the test before or after the engine is installed in the vessel.  The largest Category 3 engines are assembled in the vessel, but some smaller Category 3 engines are assembled at a manufacturing facility where they can be more easily tested.  Manufacturers must perform such testing on fully assembled production engines rather than relying on test results from test bed engines. 
* §1042.501: Remove test procedure specifications that are already covered in 40 CFR part 1065.
* §1042.505: Correct the reference to the ISO C1 duty cycle in 40 CFR part 1039.
* §1042.515: Remove an incorrect cite.
* §§1042.605 and 1042.610: Revise the reporting requirement to require detailed information about the previous year, rather than requiring a detailed projection for the year ahead.  The information required in advance would be limited to a notification of plans to use the provisions of these sections.
* §1042.630: Clarify that dockside examinations are not inspections.  Vessels subject to Coast Guard inspection are identified in 46 U.S.C. 3301.
* §1042.640: Migrate engine branding to §1068.45.
* §1042.650: Clarify that vessel operators may modify certified engines if they will be operated for an extended period outside the United States where ULSD will be unavailable.  This does not preclude the possibility of vessel operators restoring engines to a certified configuration in anticipation of bring the vessel back to the United States.
* §1042.660: Identify the contact information for submitting reports related to operation without SCR reductant.
* §1042.670: Specify that gas turbine engines are presumed to have an equivalent power density below 35 kW per liter of engine displacement; this is needed to identify which Tier 3 standards apply.
* §1042.701: Clarify that emission credits generated under 40 CFR part 94 may be used for demonstrating compliance with the Tier 3 and Tier 4 standards in 40 CFR part 1042.
* §§1042.701 and 1042.730: Describe the process for retiring emission credits.  This may be referred to as donating credits to the environment.
* §1042.705: Change terminology for counting engines from "point of first retail sale" to "U.S.-direction production volume."  This conforms to the usual approach for calculating emission credits for nonroad engines.
* §1042.710: Clarify that it is not permissible to show a proper balance of credits for a given model by using emission credits from a future model year.
* §1042.730: Clarify terminology for ABT reports.
* §1042.810: Clarify that it is only the remanufacturing standards of subpart I, not the certification standards that are the subject of the applicability determination in §1042.810.
* §1042.830: Add a provision to specifically allow voluntary labeling for engines that are not subject to remanufacturing standards, and to clarify that the label is required for engines that are subject to remanufacturing standards.
* §1042.901: Update the contact information for the Designated Compliance Officer.
* §1042.901: Revise the definition of "model year" to correct cites and clarify that the calendar year relates to the time that engines are produced under a certificate of conformity.
* §1042.901: Update the reference documents for Annex VI and NOx Technical Code to include recent changes from the International Maritime Organization.
* §1042.915: Migrate provisions related to confidential information to 40 CFR part 1068.
   
H.  Amendments Related to Locomotives in 40 CFR Part 1033
EPA's emission standards and certification requirements for locomotives and locomotive engines under the Clean Air Act are identified in 40 CFR part 1033.  
EPA is proposing to revise the engine mapping provisions in 40 CFR part 1033 for locomotive testing to denote that manufacturers do not have to meet the cycle limit values in 40 CFR 1065.514 when testing complete locomotives.  Also, for engine testing with a dynamometer, while the validation criteria of CFR 1065.514 apply, EPA proposes to allow manufacturers the option to check validation using manufacturer-declared values for maximum torque, power, and speed.  This option would allow them to omit engine mapping under 40 CFR 1065.510, which is already not required.  These provisions would reduce test burden and cost for the manufacturer, while preserving the integrity of the certification requirements.
EPA is also proposing text that describes the alternate ramped-model cycle provisions in 40 CFR part 1033 as some of the notch setting and durations are inconsistent with the description of the duty cycle in Table 1 of 40 CFR 1033.520.  EPA has determined that the table is correct as published and the error lies in the text describing how to carry out the ramped-modal test. 
We are also proposing to clarify that locomotives operating on a combination of diesel fuel and gaseous fuel are subject to NMHC standards, which is the same as if the locomotives operated only on gaseous fuel.
EPA is also requesting comment on three locomotive provisions.  The first is the allowance in 40 CFR 1033.101(g)(3) for shorter useful lives for non-locomotive-specific engines  -  that is, engines not specifically designed for use in locomotives.  For normal locomotive engines, the minimum useful life is specified in terms of MW-hrs as the product of the rated horsepower multiplied by 7.50.  However, the regulations allow manufacturers/remanufacturers of locomotives with non-locomotive-specific engines to ask for a shorter useful life if the locomotives will rarely operate longer than the shorter useful life.  We request comment regarding the need for additional guidance on applying this provision.  For example, would it be helpful if we specified that the default alternative minimum useful life under this provision would be 6.00 (instead of 7.50) times the rated horsepower?  We also request comment on whether EPA should consider notch-specific engine/alternator efficiencies to be confidential business information, and whether we need to update the URL listed in 40 CFR 1033.150(a)(4).
EPA is proposing to make numerous additional changes across 40 CFR part 1033 to correct errors, to add clarification, and to make adjustments based on lessons learned from implementing these regulatory provisions.  This includes the following proposed changes:
* §§1033.30, 1033.730, and 1033.925: Consolidate information-collection provisions into a single section.
* §1033.120: Reduce extended-warranty requirements to warranties that are actually provided to customers, rather than to any published warranties that are offered.  The principle is that the emission-related warranty should not be less effective for emission-related items than for items that are not emission-related.
* §1033.201: Clarify that manufacturers may amend their application for certification after the end of the model year in certain circumstances, but they may not produce locomotives for a given model year after December 31 of the named year.
* §1033.201: Establish that manufacturers may deliver to EPA for testing a locomotive/engine that is identical to the test locomotive/engine used for certification.  This may be necessary if the test locomotive/engine has accumulated too many hours, or if it is unavailable for any reason.
* §1033.225: Clarify that manufacturers may amend the application for certification after the end of the model year only in certain circumstances, and not to add a new or modified locomotive configuration.
* §§1033.235, 1033.245, and 1033.601: Describe how to demonstrate compliance with dual-fuel and flexible-fuel locomotives.  This generally involves testing with each separate fuel, or with a worst-case fuel blend.  
* §1033.245: Add instructions for calculating deterioration factors for sawtooth deterioration patterns, such as might be expected for periodic maintenance, such as cleaning or replacing diesel particulate filters.
* §1033.250: Remove references to routine and standard tests, and remove the shorter recordkeeping requirement for routine data (or data from routine tests).  All test records must be kept for eight years.  With electronic recording of test data, there should be no advantage to keeping the shorter recordkeeping requirement for a subset of test data.  EPA also notes that the eight-year period restarts with certification for a new model year if the manufacturer uses carryover data.
* §1033.255: Clarify that rendering information false or incomplete after submitting it is the same as submitting false or incomplete information.  For example, if there is a change to any corporate information or engine parameters described in the manufacturer's application for certification, the manufacturer must amend the application to include the new information.
* §1033.255: Clarify that voiding certificates for a recordkeeping or reporting violation would be limited to certificates that relate to the particular recordkeeping or reporting failure.
* §1033.501: Clarify how testing requirements apply differently for locomotive engines and for complete locomotives.
* §§1033.515 and 1033.520: Update terminology by referring to "test intervals" instead of "phases".  This allows us to be consistent with terminology used in 40 CFR part 1065.
* §1033.520: Correct the example given to describe the testing transition after the second test interval.  
* §§1033.701 and 1033.730: Describe the process for retiring emission credits.  This may be referred to as donating credits to the environment.
* §1033.710: Clarify that it is not permissible to show a proper balance of credits for a given model by using emission credits from a future model year.
* §1033.730: Clarify terminology for ABT reports.
* §1033.815: Add consideration of periodic locomotive inspections in 184-day intervals.
* §1033.901: Update the contact information for the Designated Compliance Officer.
* §1033.915: Migrate provisions related to confidential information to 40 CFR part 1068.
   
I.  Miscellaneous EPA Amendments
EPA is proposing to make a minor correction to the In-Use Compliance Program under 40 CFR 86.1846-01.  A recent amendment describing how to use SFTP test results in the compliance determination inadvertently removed a reference to low-mileage SFTP testing.  We are proposing to restore the removed text.
EPA is also proposing to correct an error related to the small-volume provisions for highway motorcycles.  The regulation includes an inadvertent reference to a small-volume threshold based on an annual volume of 3,000 motorcycles produced in the United States.  As written, this would not consider any foreign motorcycle production for importation into the United States.  This error is corrected by simply revising the text to refer to an annual production volume of motorcycles produced "for" the United States.  This would properly reflect small-volume production as it relates to compliance with EPA standards.
J.  Amending 49 CFR Parts 512 and 537 to Allow Electronic Submissions and Defining Data Formats for Light-Duty Vehicle Corporate Average Fuel Economy (CAFE) Reports
    To improve efficiency and reduce the burden to manufacturers and the agencies, NHTSA is proposing to modify 49 CFR part 537 eliminating the option for manufacturers to submit pre-model, mid-model and supplemental reports on CD-ROMS and require only one electronic submission (for each report) electronically via a method proscribed by NHTSA.  NHTSA is introducing a new electronic format to standardize the method for collecting manufacturer's information.  NHTSA also proposes to modify 49 CFR part 512 to include and protect submitted CAFE data elements that need to be treated as confidential business information.
    49 CFR part 537 currently requires manufacturers to provide reports to NHTSA containing projected estimates of how manufacturers plan to comply with NHTSA standards.  In the CAFE final rule for vehicles manufactured for model years 2017-2025, NHTSA modified its reporting requirements at 49 CFR 537.5(c)(4) to eliminate the option for manufacturers to mail hardcopy submissions of CAFE reports to NHTSA and required all reports to be submitted electronically by CD-ROM (CBI and non-CBI versions) or by email (non-CBI version).  Currently, any data provided in the manufacturer's report is required in MS-Excel spreadsheet format.  Supporting documentation such as cover letters or requests for confidentiality is required to be provided in a pdf format. 
     NHTSA is proposing to change the required format for CAFE data required under 49 CFR 537.7(b) and (c) in order to standardize submissions and better align with data provided to the EPA.  For model year 2013 through 2015 most manufacturer reports received by NHTSA lacked the required format adopted in the 2017-2025 final rule.  NHTSA is therefore adopting a standardized template for manufacturers to report model type level data.  The template organizes the required data in a consistent manner, adopts formats for values consistent with those provided to EPA for similar values and calculates manufacturer's target standard.  Calculating target standards is preferred because it reduces errors in manufacturer's determinations.  However, NHTSA's long-term goal is to standardize the required data for incorporation into an electronic database system and this first step facilities a structure for coding the electronic data which will ultimately reduce manufacturer's and the government's burden for reporting.   
      NHTSA rationalizes that establishing a required format is necessary because manufacturers may not understand how to provide the required CAFE data.  In the 2017 to 2025 final rule, NHTSA modified its base tire definition to better align with the approach manufacturers use to determine model type target standards.  CAFE standards are attribute based, and thus each manufacturer has its own "standard," or compliance obligation, defined by the vehicles it produces for sale in each fleet in a given model year.  A manufacturer calculates its fleet standard from the attribute based target curve standards derived from the unique footprint values, which are the products of the average front and rear vehicle track width and wheelbase dimensions, of the vehicles in each model type.  Vehicle track width dimensions are determined with a vehicle equipped with "base tires," which NHTSA currently defines in 49 CFR part 523 as (for passenger automobiles, light trucks, and medium  duty passenger vehicles) the tire size specified as standard equipment by the manufacturer on each unique combination of a vehicle's footprint and model type.  Standard equipment is defined in 40 CFR 86.1803 - 01.  NHTSA made these changes to provide a clear definition for footprint calculations and, thus, fleet compliance projections, calculations, finalizations and enforcement efforts.  Beginning in model year 2013, as modified in 49 CFR 537.7(b), manufacturers were to provide attribute characteristics and standards in consideration of the change in the base tire definition for each unique model type and footprint combination of the manufacturer's automobiles.  Manufacturers were required to provide the data listed by model types in order of increasing average inertia weight from top to bottom down the left side of the table and list the information categories in the order specified in 49 CFR 537.7(b)(3)(i) and (ii) from left to right across the top of the table.  Manufacturers could also provide the data using any format required by EPA, which contains all of the required information in a readily identifiable format. 
	In the 2017-2025 final rule, additional changes to NHTSA's reporting requirements also included a modification to 49 CFR 537.7(b) to restructure and clarify how manufacturers report information used to make the determination that an automobile can be classified as a light truck for CAFE purposes.  The agency felt that this proposed change was necessary because the previous requirements in 49 CFR part 537 specified that manufacturers must provide information on some, but not all, of the functions and features used to classify an automobile as a light truck, and it is important for compliance reasons to understand and be able to readily verify the methods used to ensure manufacturers are classifying vehicles correctly.  Furthermore, the previous regulation required that the information be distributed in different locations throughout a manufacturer's report, making it difficult for the agency to clearly determine exactly what functions or features a manufacturer is using to classify a vehicle as a light truck.  Therefore, NHTSA streamlined the location of all its provisions for defining vehicle classifications into one consolidate section.  With these changes, manufacturers can provide the agency with all the necessary data in a simpler format that allows the agency, and perhaps also the manufacturer, to understand quickly and easily how light truck vehicle classification determination decisions are made.
	In reviewing manufacturers current reporting, most manufacturers are still failing to provide the required information for classifying light trucks.  For the model year 2015 pre-model year reports, only a few manufacturers provided the required information and many provided the information incorrectly.  Therefore, NHTSA is also proposing to incorporate an additional template for collecting vehicle configuration level data which includes vehicle classification information.  Similarly, the template will standardize the format of the data with values required by EPA and structures the data for future incorporation into a database system.  Finally, the template also simplifies reporting by not having manufacturers report all vehicle classification characteristics but only those used by the manufacturer in qualifying a vehicle as a light truck.  NHTSA is adopting this provision to better align with EPA current database structure which uses a similar approach in accepting light truck level data. 

















III.  Statutory and Executive Order Reviews
A.  	Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review
This action is an economically significant regulatory action that was submitted to the Office of Management and Budget (OMB) for review.  Any changes made in response to OMB recommendations have been documented in the docket.  The agencies prepared an analysis of the potential costs and benefits associated with this action.  This analysis, the draft "Regulatory Impact Analysis - Heavy-Duty GHG and Fuel Efficiency Standards NPRM," is available in the docket.  The analyses contained in this document are also summarized in Sections VII, VIII, and IX of this preamble.
B.  National Environmental Policy Act
NHTSA has initiated the Environmental Impact Statement (EIS) process under the National Environmental Policy Act (NEPA), 42 U.S.C. 4321 - 4347, and implementing regulations issued by the Council on Environmental Quality (CEQ), 40 CFR part 1500, and NHTSA, 49 CFR part 520.  On July 9, 2014, NHTSA published a notice of intent to prepare an EIS for this rulemaking and requested scoping comments (79 FR 38842).  The notice invited Federal, State, and local agencies, Indian tribes, stakeholders, and the public to participate in the scoping process and to help identify the environmental issues and reasonable alternatives to be examined in the EIS.
Concurrently with this NPRM, NHTSA is releasing a Draft Environmental Impact Statement (DEIS).  NHTSA prepared the DEIS to analyze and disclose the potential environmental impacts of the proposed HD fuel consumption standards and reasonable alternatives.  Environmental impacts analyzed in the DEIS include those related to fuel and energy use, air quality, and climate change.  The DEIS also describes potential environmental impacts to a variety of resource areas, including water resources, biological resources, land use and development, safety, hazardous materials and regulated wastes, noise, socioeconomics, and environmental justice.  These resource areas are assessed qualitatively in the DEIS.
The DEIS analyzes five alternative approaches to regulating HD vehicle fuel consumption, including a "preferred alternative" and a "no action alternative."  The DEIS evaluates a reasonable range of alternatives under NEPA, and analyzes the direct, indirect, and cumulative impacts of those alternatives in proportion to their significance.
Because of the link between the transportation sector and GHG emissions, NHTSA recognizes the need to consider the possible impacts on climate and global climate change in the analysis of the effects of these fuel consumption standards.  NHTSA also recognizes the difficulties and uncertainties involved in such an impact analysis.  Accordingly, consistent with CEQ regulations on addressing incomplete or unavailable information in environmental impact analyses, NHTSA has reviewed existing credible scientific evidence that is relevant to this analysis and summarized it in the DEIS.  NHTSA has also employed and summarized the results of research models generally accepted in the scientific community.
Although the alternatives have the potential to decrease GHG emissions substantially, they do not prevent climate change, but only result in reductions in the anticipated increases in CO2 concentrations, temperature, precipitation, and sea level.  They would also, to a small degree, delay the point at which certain temperature increases and other physical effects stemming from increased GHG emissions would occur.  As discussed in the EIS, NHTSA presumes that these reductions in climate effects will be reflected in reduced impacts on affected resources.
The DEIS has informed NHTSA decision makers in their preparation of this NPRM and in the ongoing rulemaking process.  NHTSA invites comments on the DEIS from Federal, State, and local agencies, Indian tribes, stakeholders, and the public.  Instructions for submission of such comments are included in the DEIS.
For additional information on NHTSA's NEPA analysis, please see the DEIS.
C.  	Paperwork Reduction Act
The information collection activities in this proposed rule have been submitted for approval to the Office of Management and Budget (OMB) under the PRA.  The Information Collection Request (ICR) document that the EPA prepared has been assigned EPA ICR number [XXXX.XX].  You can find a copy of the ICR in the docket for this proposed rule, and it is briefly summarized here. 
The EPA and DOT propose to collect information to ensure compliance with the provisions in this proposal.  This includes a variety of testing, reporting and recordkeeping requirements for vehicle and engine manufacturers.  Section 208(a) of the CAA requires that manufacturers provide information the Administrator may reasonably require to determine compliance with the regulations; submission of the information is therefore mandatory.  We will consider confidential all information meeting the requirements of Section 208(c) of the CAA.
Respondents/affected entities: [insert description from the ICR]. 
Respondent's obligation to respond: [identify, as applicable: voluntary, required to obtain or retain a benefit (citing authority), or mandatory (citing authority)].
Estimated number of respondents: [insert # from Section 6 of the ICR].
Frequency of response: [insert frequency interval(s) from Section 6 of the ICR]. 
Total estimated burden: [insert # of hours from Section 6 of the ICR] hours (per year). Burden is defined at 5 CFR 1320.3(b).
Total estimated cost: $[insert # from Section 6 of the ICR] (per year), includes $[insert # from Section 6 of the ICR] annualized capital or operation & maintenance costs. 
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 the EPA's regulations in 40 CFR are listed in 40 CFR part 9. 
Submit your comments on the agency's need for this information, the accuracy of the provided burden estimates and any suggested methods for minimizing respondent burden to the EPA using the docket identified at the beginning of this proposed rule.  You may also send your ICR-related comments to OMB's Office of Information and Regulatory Affairs via email to oira_submissions@omb.eop.gov, Attention: Desk Officer for the EPA.  Since OMB is required to make a decision concerning the ICR between 30 and 60 days after receipt, OMB must receive comments no later than [insert date 30 days after publication in the Federal Register].  The EPA will respond to any ICR-related comments in the final rule.
D.  	Regulatory Flexibility Act
Pursuant to section 603 of the RFA, the agencies prepared an initial regulatory flexibility analysis (IRFA) that examines the impact of the proposed rule on small entities along with regulatory alternatives that could minimize that impact.  The complete IRFA is available for review in the docket and is summarized here.  As required by section 609(b) of the RFA, the EPA convened a Small Business Advocacy Review (SBAR) Panel to obtain advice and recommendations from small entity representatives that potentially would be subject to the rule's requirements.  The SBAR Panel evaluated the assembled materials and small-entity comments on issues related to elements of an IRFA.  A copy of the full SBAR Panel Report is available in the rulemaking docket.
     (1)  	Overview
The Regulatory Flexibility Act (RFA) generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.  
For purposes of assessing the impacts of today's rule on small entities, small entity is defined as: (1) a small business as defined by the Small Business Administration's (SBA) regulations at 13 CFR 121.201 (see table below); (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.  
Table XV-1 provides an overview of the primary SBA small business categories potentially affected by this regulation.  
Table XV-1 Primary Small Business Categories Potentially Affected by this Regulation
Industry Expected in Rulemaking
Industry NAICS[a] Code
NAICS Description
Defined as small entity by SBA if less than or equal to:
Alternative Fuel 
Engine Converters
333999
Misc. General Purpose Machinery
500 employees

811198
All Other Automotive Repair & Maintenance
$7.0 million (annual receipts)
Voc. Vehicle Chassis Manufacturers
336120
Heavy-Duty Truck Manufacturing
1,000 employees
HD Trailer Manufacturers
336212
Truck Trailer Manufacturing
500 employees

333924
Industrial Truck, Trailer & Stacker Machinery
750 employees
Note:
[a] North American Industrial Classification System

     (2)  Legal Basis for Agency Action
     Heavy-duty vehicles are classified as those with gross vehicle weight ratings (GVWR) of greater than 8,500 lb. Section 202(a) of the Clean Air Act (CAA) allows EPA to regulate new vehicles and new engines by prescribing emission standards for pollutants which the Administrator finds "may reasonably be anticipated to endanger public health or welfare." In 2009, EPA found that six greenhouse gases (GHGs) were anticipated to endanger public health or welfare, and new motor vehicles and new motor vehicle engines contribute to that pollution. This finding was upheld by the unanimous court in Coalition for Responsible Regulation v. EPA, 684 F. 3d 102 (D.C. Cir. 2012). Acting under the authority of the CAA, EPA set the first phase of heavy-duty vehicle GHG standards (Phase 1) and specified certification requirements for emissions of four GHGs emitted by mobile sources: carbon dioxide (CO2), nitrous oxide (N2O), methane (CH4), and hydrofluorocarbons (HFC).
     (3)  Summary of Potentially Affected Small Entities
Table XV-1 above lists industries/sectors potentially affected by the proposed rule.  EPA is not aware of any small businesses who manufacture complete heavy-duty pickup trucks and vans, heavy-duty engines, or Class 7 and 8 tractors. 
EPA used the criteria for small entities developed by the Small Business Administration under the North American Industry Classification System (NAICS) as a guide. Information about these entities comes from sources including EPA's certification data, trade association databases, and previous rulemakings that have affected these industries. EPA then found employment information for these companies using the business information database Hoover's Online (a subsidiary of Dan and Bradstreet).  These entities fall under the categories listed in the table.  
     (4)  Potential Reporting, Recordkeeping and Compliance Burdens
For any emission control program, EPA must have assurances that the regulated products will meet the standards. The program that EPA is considering for manufacturers subject to this proposal will include testing, reporting, and recordkeeping requirements. Testing requirements for these manufacturers could include use of EPA's Greenhouse gas Emissions Model (GEM) vehicle simulation tool to obtain the overall CO2 emissions rate for certification of vocational chassis and trailers, aerodynamic testing to obtain aerodynamic inputs to GEM for some trailer manufacturers and engine dynamometer testing for alternative fuel engine converters to ensure their conversions meet the proposed CO2, CH4 and N2O engine standards.   Reporting requirements would likely include emissions test data or model inputs and results, technical data related to the vehicles, and end-of-year sales information. Manufacturers would have to keep records of this information.
     (5)  Related Federal Rules
The primary federal rule that is related to the proposed Phase 2 rule under consideration is the 2011 Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles (76 FR 57106).  This Phase 1 rulemaking would continue to be in effect in the absence of this proposed rule.  Several Federal rules relate to heavy-duty vehicles and to the proposed Phase 2 rule under consideration.  The Department of Transportation, through NHTSA, has several safety requirements for these vehicles.  California adopted its own greenhouse gas initiative, which places aerodynamic requirements on trailers used in long-haul applications.  None of these existing regulations were found to conflict with the proposed rulemaking.
     (6)  Summary of SBREFA Panel Process and Panel Outreach
  (a) Significant Panel Findings
The Small Business Advocacy Review Panel (SBAR Panel, or the Panel) considered regulatory options and flexibilities to help mitigate potential adverse effects on small businesses as a result of this rule. During the SBREFA Panel process, the Panel sought out and received comments on the regulatory options and flexibilities that were presented to SERs and Panel members.  The recommendations of the Panel are described below and are also located in Section XX of the SBREFA Final Panel Report, which is available in the public docket.
  (b) Panel Process
As required by Section 609(b) of the RFA, as amended by SBREFA, we also conducted outreach to small entities and convened an SBAR Panel to obtain advice and recommendations of representatives of the small entities that potentially would be subject to the rule's requirements. On October 22, 2014, EPA's Small Business Advocacy Chairperson convened a Panel under Section 609(b) of the RFA. In addition to the Chair, the Panel consisted of the Division Director of the Assessment and Standards Division of EPA's Office of Transportation and Air Quality, the Chief Counsel for Advocacy of the Small Business Administration, and the Administrator of the Office of Information and Regulatory Affairs within the Office of Management and Budget. 
As part of the SBAR Panel process, we conducted outreach with representatives of small businesses that would potentially be affected by the proposed rulemaking. We met with these Small Entity Representatives (SERs) to discuss the potential rulemaking approaches and potential options to decrease the impact of the rulemaking on their industries. We distributed outreach materials to the SERs; these materials included background on the rulemaking, possible regulatory approaches, and possible rulemaking alternatives.  The Panel met with SERs from the industries that would be directly affected by the Phase 2 rule on November 5, 2014 (trailer manufacturers) and November 6, 2014 (engine converters and vocational vehicle chassis manufacturers) to discuss the outreach materials and receive feedback on the approaches and alternatives detailed in the outreach packet.  The Panel also met with SERs on July 19, 2014 for an initial, introductory outreach meeting, and held a supplementary outreach meeting with the trailer manufacturer SERs on October 28, 2014.  The Panel received written comments from the SERs following each meeting in response to discussions had at the meeting and the questions posed to the SERs by the Agency.  The SERs were specifically asked to provide comment on regulatory alternatives that could help to minimize the rule's impact on small businesses. 
The Panel's findings and discussions were based on the information that was available during the term of the Panel and issues that were raised by the SERs during the outreach meetings and in their comments.  It was agreed that EPA should consider the issues raised by the SERs and discussions had by the Panel itself, and that EPA should consider comments on flexibility alternatives that would help to mitigate negative impacts on small businesses to the extent legally allowable by the Clean Air Act.
Alternatives discussed throughout the Panel process included those offered in previous or current EPA rulemakings, as well as alternatives suggested by SERs and Panel members.  A summary of these recommendations is detailed below, and a full discussion of the regulatory alternatives and hardship provisions discussed and recommended by the Panel can be found in the SBREFA Final Panel Report.  A complete discussion of the provisions for which we are requesting comment and/or proposing in this action can be found in Sections IV.E and V.D of this preamble.  Also, the Panel Report includes all comments received from SERs (Appendix B of the Report) and summaries of the two outreach meetings that were held with the SERs. In accordance with the RFA/SBREFA requirements, the Panel evaluated the aforementioned materials and SER comments on issues related to the IRFA.  The Panel's recommendations from the Final Panel Report are discussed below.
  (c) Panel Recommendations
    (i) Small Business Trailer Manufacturers
Comments from trailer manufacturer SERs indicated that these companies are familiar with most of the technologies described in the materials, but have no experience with EPA certification and do not anticipate they could manage the accounting and reporting requirements without additional staff and extensive training.  Performance testing, which is a common requirement for many of EPA's regulatory programs, is largely unfamiliar to these small business manufacturers and the SERs believed the cost of testing would be a significant burden on their companies.  In light of this feedback, the Panel recommended a combination of streamlined compliance and targeted exemptions for these small businesses based on the specific trailer types that they manufacture.  The Panel believed these strategies would achieve many of the benefits for the environment by driving adoption of CO2-reducing technologies, while significantly reducing the burden that these new regulations would introduce on small businesses.
    (ii) Box Trailer Manufacturers
Box trailer manufacturers have the benefit of relying on the aerodynamic technology development initiated through EPA's voluntary SmartWay program.  The Panel was aware that EPA was planning to propose a simplified compliance program for all manufacturers, in which aerodynamic device manufacturers have the opportunity to test and certify their devices with EPA as technologies that can be used by trailer manufacturers in their trailer certification.  This pre-approved technology strategy was intended to provide all trailer manufactures a means of complying with the standards without the burden of testing.  In the event that this strategy is limited to the early years of the trailer program for all manufactures, the Panel recommended that small manufacturers continue to be given the option to use pre-approved devices in lieu of testing.  
In the event that small trailer manufacturers adopt pre-approved aerodynamic technologies and the appropriate tire technologies for compliance, the Panel recommended an alternative compliance pathway in which small business trailer manufacturers could simply report to EPA that all of their trailers include approved technologies in lieu of collecting all of the required inputs for the GEM vehicle simulation.  
    (iii) Non-Box Trailer Manufacturers
The Panel recommended no aerodynamic requirements for non-box trailers.  The non-box trailer SERs indicated that they had no experience installing aerodynamic devices and had only seen them in prototype-level demonstrations.  In terms of the aerodynamic devices in use today, most non-box trailer SERs identified unique operations in which their trailers are used that preclude the use of those technologies.  
Some non-box trailer manufacturers had experience with LRR tires and ATI systems.  However, the non-box trailer manufacturer SERs indicated that LRR tires are not currently available for some of their trailer types.  The SERs noted that tire manufacturers are currently focused on box trailer applications and there are only a few LRR tire models that meet the needs of their customers.  The Panel recommended EPA ensure appropriate availability of these tires in order for it to be deemed a feasible means of achieving these standards and recommended a streamlined compliance process based on the availability of technologies.  The Panel suggested the best compliance option from a small business perspective would be for EPA to pre-approve tires, similar to the approach being proposed for aerodynamic technologies, and to maintain a list that could be used to exempt small businesses when no suitable tires are available.  However, the Panel recognized the difficulties of maintaining an up-to-date list of certified technologies.  The Panel recommended that, if EPA did not adopt the list-based approach, the agency consider a simplified letter-based compliance option that allows manufacturers to petition EPA for an exemption if they are unable to identify tires that meet the LRR performance requirements on a trailer family basis.
    (iv) Non-Highway Trailer Manufacturers 
The Panel recommended excluding all trailers that spend a significant amount of time in off-road applications.  These trailers may not spend much time at highway speeds and aerodynamic devices may interfere with the vehicle's intended purpose.  Additionally, tires with lower rolling resistance may not provide the type of traction needed in off-road applications.
    (v) Compliance Provisions for All Small Trailer Manufacturers
Due to the potential for reducing a small business's competitiveness compared to the larger manufacturers, as well as the ABT record-keeping burden, the Panel recommended that EPA consider small business flexibilities to allow small entities to opt out of ABT without placing themselves at a competitive disadvantage to larger firms that adopt ABT, such as a low volume exemption or requiring only LRR where appropriate.  EPA was asked to consider flexibilities for small businesses that would ease and incentivize their participation in ABT, such as streamlined the tracking requirements for small businesses.  In addition, the Panel recommended that EPA request comment on the feasibility and consequences of ABT for the trailer program and additional flexibilities that will promote small business participation.  
    (vi) Lead Time Provisions for All Small Trailer Manufacturers
For all trailer types that will be included in the proposal, the Panel recommended a 1-year delay in implementation for small trailer manufacturers at the start of the proposed rulemaking to allow them additional lead time to make the proper staffing adjustments and process changes and possibly add new infrastructure to meet these requirements.  In the event that EPA is unable to provide pre-approved technologies for manufacturers to choose for compliance, the Panel recommended that EPA provide small business trailer manufacturers an additional 1-year delay for each subsequent increase in stringency.  This additional lead time will allow these small businesses to research and market the technologies required by the new standards.
    (vii) Small Business Alternative Fuel Engine Converters
To reduce the compliance burden of small business engine converters who convert engines in previously-certified complete vehicles, the Panel recommended allowing engine compliance to be sufficient for certification.  This would mean the converted vehicle would not need to be recertified as a vehicle.  This flexibility would eliminate the need for these small manufacturers to gather all of the additional component-level information in addition to the engine CO2 performance necessary to properly certify a vehicle with GEM (e.g., transmission data, aerodynamic performance, tire rolling resistance, etc.).  In addition, the Panel recommended that small engine converters be able to submit an engineering analysis, in lieu of measurement, to show that their converted engines do not increase N2O emissions. Many of the small engine converters are converting SI-engines, and the catalysts in these engines are not expected to substantially impact N2O production.  Small engine converters that convert CI-engines could likely certify by ensuring that their controls require changes to the SCR dosing strategies.
The Panel did not recommend separate standards for small business natural gas engine manufacturers.  The Panel believes this would discourage entrance for small manufactures into this emerging market by adding unnecessary costs to a technology that has the potential to reduce CO2 tailpipe emissions.  In addition, the Panel noted that additional leakage requirements beyond a sealed crankcase for small business natural gas-fueled CI engines and requirements to follow industry standards for leakage could be waived for small businesses with minimal impact on overall GHG emissions.  
Finally, the Panel recommended that small engine converters receive a one-year delay in implementation for each increase in stringency throughout the proposed rule.  This flexibility will provide small converters additional lead time to obtain the necessary equipment and perform calibration testing if needed.  
    (viii) Emergency Vehicle Chassis Manufacturers
Fire trucks, and many other emergency vehicles, are built for high level of performance and reliability in severe-duty applications.  Some of the CO2-reducing technologies listed in the materials could compromise the fire truck's ability to perform its duties and many of the other technologies simply provide no benefit in real-world emergency applications.  The Panel recommended proposing less stringent standards for emergency vehicle chassis manufactured by small businesses.  The Panel suggested that feasible standards could include adoption of LRR tires at the baseline Phase 2 level and installation of a Phase 2-compliant engine.  In addition, the Panel recommended a simplified certification approach for small manufacturers who make chassis for emergency vehicles that reduces the number of inputs these manufacturers must obtain for GEM.  
    (ix) Off-Road Vocational Vehicle Chassis Manufacturers
EPA is planning to propose to continue the exemptions in Phase 1 for off-road and low-speed vocational vehicles (see generally 76 FR 57175).  These provisions currently apply for vehicles that are defined as "motor vehicles" per 40 CFR 85.1703, but may conduct most of their operations off-road. Vehicles qualifying under these provisions must comply with the applicable engine standard, but need not comply with a vehicle-level GHG standard.  The Panel concluded this exemption is sufficient to cover the small business chassis manufacturers who design chassis for off-road vocational vehicles.
    (x) Custom Chassis Manufacturers
The Panel concluded that chassis designed for specialty operations often have limited ability to adopt CO2- and fuel consumption-reducing technologies due to their unique use patterns.  In addition, the manufacturers of these chassis have very small annual sales volumes.  The Panel recommended that EPA propose a low volume exemption for these custom chassis manufacturers.  The Panel did not receive sufficient information to recommend a specific sales volume, but recommended that EPA request comment on how to design a small business exemption by means of a volume exemption, and an appropriate annual sales volume threshold.
    (xi) Glider Manufacturers
The Panel was aware that EPA would like to reduce the use of glider kits, which have higher emissions of criteria pollutants like NOx than current engines, and which could have higher GHG emissions than Phase 2 engines.  However, the Panel estimates that the number of vehicles produced by the small businesses who manufacturer glider kits is too small to have a substantial impact on the total heavy-duty inventory and recommended that existing small businesses be allowed to continue assembling glider vehicles without having to comply with the GHG requirements. The Panel recommended that EPA establish an allowance for existing small business glider manufacturers to produce some number of glider kits for legitimate purposes, such as for newer vehicles badly damaged in crashes.   The Panel recommended that any other limitations on small business glider production be flexible enough to allow sales levels as high as the peak levels in the 2010-2012 timeframe.  
     (1)  Summary of Projected Impact on Small Businesses
EPA has chosen to propose the Panel's recommended regulatory flexibility provisions for small business alternative fuel converters and vocational vehicle chassis manufacturers and we believe that all of the small businesses in these industries will be impacted by less than one percent of their annual sales.  EPA is also proposing many of the Panel's recommendations for small business trailer manufacturers, including seeking comment on the possibility of a small volume exemption.  A majority of the small trailer manufacturers produce non-box trailers, and are not required to adopt aerodynamic devices in this proposal.  Additionally, many of the smallest trailer manufacturers produce specialty trailers that are candidates for exemption under the proposed off-highway or heavy-haul provisions described in Section IV C. (5).  At this time, EPA believes the additional flexibilities offered for small business trailer manufacturers will reduce their burden below three percent of their annual sales. A more detailed description of the analysis to quantify the impact on small businesses in each affected industry sector is included in the IRFA as presented in Chapter 12of the draft RIA for this rulemaking.  EPA invites comment on all aspects of the proposal and its impacts on small entities.
E.  	Unfunded Mandates Reform Act
This action contains a federal mandate under UMRA, 2 U.S.C. 1531 - 1538, that may result in expenditures of $100 million or more for state, local and tribal governments, in the aggregate, or the private sector in any one year.  Accordingly, the agencies have prepared a statement required under section 202 of UMRA.  The statement is included in the docket for this action and briefly summarized here.
The agencies have prepared a statement of the cost-benefit analysis as required by Section 202 of the UMRA; this discussion can be found in this preamble, and in the draft RIA. The agencies believe that the proposal represents the least costly, most cost-effective approach to achieve the statutory requirements of the rules. Section IX explains why the agencies believe that the fuel savings that would result from this proposal would lead to lower prices economy wide, improving U.S. international competitiveness.  The costs and benefits associated with the proposal are discussed in more detail above in Section IX and in the Draft Regulatory Impact Analysis, as required by the UMRA.
This action is not subject to the requirements of Section 203 of UMRA because it contains no regulatory requirements that might significantly or uniquely affect small governments. 

F.  	Executive Order 13132: Federalism 
This action 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.
In the spirit of Executive Order 13132, and consistent with EPA policy to promote communications between EPA and State and local governments, EPA specifically solicits comment on this proposed rule from State and local officials.
	NHTSA notes that EPCA contains a provision (49 U.S.C. 32919(a)) that expressly preempts any State or local government from adopting or enforcing a law or regulation related to fuel economy standards or average fuel economy standards for automobiles covered by an average fuel economy standard under 49 U.S.C. Chapter 329.  However, commercial medium- and heavy-duty on-highway vehicles and work trucks are not "automobiles," as defined in 49 U.S.C. 32901(a)(3).  In Phase 1 NHTSA concluded that EPCA's express preemption provision would not reach the fuel efficiency standards to be established in this rulemaking.  NHTSA is reiterating that conclusion here for the proposed Phase 2 standards.     
NHTSA also considered the issue of implied or conflict preemption.  The possibility of such preemption is dependent upon there being an actual conflict between a standard established by NHTSA in this rulemaking and a State or local law or regulation.  See Spriestma v. Mercury Marine, 537 U.S. 51, 64-65 (2002).  At present, NHTSA has no knowledge of any State or local law or regulation that would actually conflict with one of the fuel efficiency standards to be established in this rulemaking.  
NHTSA seeks public comment on this issue.
G.  Executive Order 13175: Consultation and Coordination with Indian Tribal Governments
This action does not have tribal implications as specified in Executive Order 13175.  This proposal will be implemented at the Federal level and impose compliance costs only on vehicle and engine manufacturers.  Tribal governments would be affected only to the extent they purchase and use regulated vehicles. Thus, Executive Order 13175 does not apply to this action. 
The agencies specifically solicit comment on this proposal from Tribal officials.	 
H.  Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks
This action is subject to Executive Order 13045 because it is an economically significant regulatory action as defined by Executive Order 12866, and the agencies believe that the environmental health or safety risk addressed by this action may have a disproportionate effect on children.  Accordingly, we have evaluated the environmental health or safety effects of these risks on children.  The results of this evaluation are discussed below.
A synthesis of the science and research regarding how climate change may affect children and other vulnerable subpopulations is contained in the Technical Support Document for Endangerment or Cause or Contribute Findings for Greenhouse Gases under Section 202(a) of the Clean Air Act, which can be found in the public docket for this proposal.  In making those Findings, EPA Administrator placed weight on the fact that certain groups, including children, are particularly vulnerable to climate-related health effects.  In those Findings, EPA Administrator also determined that the health effects of climate change linked to observed and projected elevated concentrations of GHGs include the increased likelihood of more frequent and intense heat waves, increases in ozone concentrations over broad areas of the country, an increase of the severity of extreme weather events such as hurricanes and floods, and increasing severity of coastal storms due to rising sea levels.  These effects can all increase mortality and morbidity, especially in vulnerable populations such as children, the elderly, and the poor. In addition, the occurrence of wildfires in North America have increased and are likely to intensify in a warmer future.  PM emissions from these wildfires can contribute to acute and chronic illnesses of the respiratory system, including pneumonia, upper respiratory diseases, asthma, and chronic obstructive pulmonary disease, especially in children. 
The agencies have estimated reductions in projected global mean surface temperature and sea level rise as a result of reductions in GHG emissions associated with the standards finalized in this action (Section VII and NHTSA's DEIS).  Due to their vulnerability, children may receive disproportionate benefits from these reductions in temperature and the subsequent reduction of increased ozone and severity of weather events.

As discussed in Section VIII.D.2, based on the magnitude of the non-GHG co-pollutant emissions changes predicted to result from the proposed standards, the agencies expect that there will be improvements in ambient air quality, pending a more comprehensive analysis for the final rulemaking.  Due to their vulnerability, children may receive disproportionate benefits from these reductions, as well.  
Children are also more susceptible than adults to many air pollutants because of differences in physiology, higher per body weight breathing rates and consumption, rapid development of the brain and bodily systems, and behaviors that increase chances for exposure.  Even before birth, the developing fetus may be exposed to air pollutants through the mother that affect development and permanently harm the individual.
Infants and children breathe at much higher rates per body weight than adults, with infants under one year of age having a breathing rate up to five times that of adults.  In addition, children breathe through their mouths more than adults and their nasal passages are less effective at removing pollutants, which leads to a higher deposition fraction in their lungs.
Certain motor vehicle emissions present greater risks to children as well.  Early lifestages (e.g., children) are thought to be more susceptible to tumor development than adults when exposed to carcinogenic chemicals that act through a mutagenic mode of action.  Exposure at a young age to these carcinogens could lead to a higher risk of developing cancer later in life. 
The adverse effects of individual air pollutants may be more severe for children, particularly the youngest age groups, than adults.  The Integrated Science Assessments and Criteria Documents for a number of pollutants affected by this rule, including those for NO2, SO2, PM, ozone and CO, describe children as a group with greater susceptibility.  Section VIII.B.7 discusses a number of childhood health outcomes associated with proximity to roadways, including evidence for exacerbation of asthma symptoms and suggestive evidence for new onset asthma.  In general, these studies do not identify the specific contaminants associated with adverse effects, instead addressing the near-roadway environment as one containing numerous exposures potentially associated with adverse health effects. 
There is substantial evidence that people who live or attend school near major roadways are more likely to be of a minority race, Hispanic ethnicity, and/or low SES.  Within these highly exposed groups, children's exposure and susceptibility to health effects is greater than adults due to school-related and seasonal activities, behavior, and physiological factors.
Section VIII.D.2 describes the expected ambient air quality changes for non-GHG co-pollutants resulting from the proposed standards, which represent levels to which the general population is exposed.  Children are not expected to experience greater ambient concentrations of air pollutants than the general population.  However, because of their greater susceptibility to air pollution and their increased time spent outdoors, it is likely that the proposed standards would have particular benefits for children's health.	
I.  Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use
This action is not a "significant energy action" because it is not likely to have a significant adverse effect on the supply, distribution or use of energy.  In fact, this proposal has a positive effect on energy supply and use.  Because the combination of the proposed fuel economy standards and the proposed GHG emission standards would result in significant fuel savings, this proposal encourages more efficient use of fuels.  Therefore, we have concluded that this proposal is not likely to have any adverse energy effects.  Our energy effects analysis is described above in Section IX.
J.  National Technology Transfer and Advancement Act and 1 CFR Part 51
This action involves technical standards.  The agencies propose to use the following voluntary consensus standards:
                                 Organization
                                   Standard
                                Available from
SAE International
SAE J1263, Road Load Measurement and Dynamometer Simulation Using Coastdown Techniques, revised March 2010
www.sae.org
SAE International
SAE J2263, Road Load Measurement Using Onboard Anemometry and Coastdown Techniques, revised December 2008
www.sae.org
SAE International
SAE J2343, Recommended Practice for LNG Medium and Heavy-Duty Powered Vehicles, Revised July 2008
www.sae.org
This action also involves technical standards for which there is no available voluntary consensus standard.  First, the Agencies are proposing greenhouse gas emission standards for heavy-duty vehicles that depend on computer modeling to predict and emission rate based on various engine and vehicle characteristics.  Such a model is not available from other sources, so EPA has developed the Greenhouse Gas Emission Model as a simulation tool for demonstrating compliance with emission standards.  A working version of this software is available for download at http://www.epa.gov/otaq/climate/gem.htm.
Second, we need to define a benchmark gear oil for establishing a reference point for establishing improvements in axle efficiency.  There is no voluntary consensus standard for this purpose. We are instead proposing to identify the technical specifications for a commonly used commercial product.  These technical specifications rely extensively on ASTM reference procedures to define individual chemical and physical properties.  These technical specifications are in the docket for this rulemaking.
Third, the amendments for marine diesel engines involve technical standards related to the requirements that apply internationally. There are no voluntary consensus documents that address these technical standards.  EPA has therefore decided to use the following standards from the International Maritime Organization in 40 CFR part 1042, which already apply under 40 CFR part 1043: 
                                 Organization
                                   Standard
                                Available from
International Maritime Organization
MARPOL Annex VI, Regulations for the Prevention of Pollution from Ships, Third Edition, 2013
www.imo.org
International Maritime Organization
NOx Technical Code 2008, 2013 Edition
www.imo.org
International Maritime Organization
Annex 12, Resolution MEPC.251(66) from the Report of the Marine Environment Protection Committee on its Sixty-Sixth Session, April 25, 2014
www.imo.org
In addition, the regulations rely on several reference test methods from ASTM in 40 CFR part 1036. These standards are updated periodically to reflect the latest information regarding best practices.  We expect to include the latest available versions of these reference test methods in the final rule. 
K.  Executive Order 12898:  Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations
The agencies believe the human health or environmental risk addressed by this action will not have potential disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations.  The results of this evaluation are discussed below.  
With respect to GHG emissions, the agencies have determined that these proposed rules would not have disproportionately high and adverse human health or environmental effects on minority, low-income or indigenous populations because they increase the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority, low-income or indigenous population.  The reductions in CO2 and other GHGs associated with the standards would affect climate change projections, and the agencies have estimated reductions in projected global mean surface temperatures (Section VII).  Within communities experiencing adverse impacts related to climate change, certain parts of the population may be especially vulnerable; these include the poor, the elderly, those already in poor health, the disabled, those living alone, and/or indigenous populations dependent on one or a few resources.  
For non-GHG co-pollutants such as ozone, PM2.5, and toxics, the agencies have concluded that it is not practicable to determine whether there would be disproportionately high and adverse human health or environmental effects on minority, low income and/or indigenous populations from these rules.  As discussed in Section VIII.D.2, however, based on the magnitude of the non-GHG co-pollutant emissions changes predicted to result from the proposed standards, EPA and NHTSA expect that there will be improvements in ambient air quality that would likely help in mitigating the disparity in racial, ethnic, and economically-based exposures, pending a more comprehensive analysis for the final rulemaking.


















IV.  EPA and NHTSA Statutory Authorities
As described below, the proposed regulations are authorized separately for EPA and NHTSA under the agencies' respective statutory authorities.  See Section I for a discussion of these authorities.  
A.  EPA
Statutory authority for the vehicle controls proposed today is found in Section 202 (a) (which  authorizes standards for emissions of pollutants from new motor vehicles which emissions cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare), 202 (d), 203-209, 216, and 301 of the Clean Air Act, 42 U.S.C. 7521 (a), 7521 (d), 7522, 7523, 7524, 7525, 7541, 7542, 7543, 7550, and 7601.
Pursuant to 42 U.S.C. Section 4365, EPA must make certain proposed rules available to the Science Advisory Board (SAB) for review.  EPA may also voluntarily choose to make other rules available to the SAB.  EPA notified the SAB of its plans for this rulemaking and on June 11, 2014, the chartered SAB discussed the recommendations of its work group on the planned action and agreed that no further SAB consideration of the supporting science was merited.  
B.  NHTSA
Statutory authority for the fuel consumption standards proposed today is found in Section 103 of the Energy Independence and Security Act of 2007, 49 U.S.C. 32902(k).  EISA authorizes a fuel efficiency improvement program, designed to achieve the maximum feasible improvement to be created for commercial medium- and heavy-duty on-highway vehicles and work trucks, to implement appropriate test methods, measurement metrics, fuel economy standards, and compliance and enforcement protocols that are appropriate, cost-effective and technologically feasible.  To the extent motor vehicle safety is implicated, NHTSA's authority to regulate it is also derived from the National Traffic and Motor Vehicle Safety Act, 49 U.S.C. §§ 30101 et. seq.

List of Subjects

40 CFR Part 85
Confidential Business Information, Imports, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements, Research, Warranties.

40 CFR Part 86
Administrative practice and procedure, confidential business information, Incorporation by reference, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements.

40 CFR Part 600
Administrative practice and procedure, Electric power, Fuel economy, Incorporation by reference, Labeling, Reporting and recordkeeping requirements.

40 CFR Part 1033
Administrative practice and procedure, Air pollution control.

40 CFR Parts 1036 and 1037
Environmental protection, Administrative practice and procedure, Air pollution control, confidential business information, Incorporation by reference, Labeling, Motor vehicle pollution, Reporting and recordkeeping requirements, Warranties.

40 CFR Part 1039
Environmental protection, Administrative practice and procedure, Air pollution control, Confidential business information, Imports, Labeling, Penalties, Reporting and recordkeeping requirements, Warranties.

40 CFR Parts 1065 and 1066
Administrative practice and procedure, Air pollution control, Incorporation by reference, Reporting and recordkeeping requirements, Research.

40 CFR Part 1068
Environmental protection, Administrative practice and procedure, confidential business information, Imports, Incorporation by reference, Motor vehicle pollution, Penalties, Reporting and recordkeeping requirements, Warranties.

49 CFR Parts 523, 534, and 535
Fuel economy.



For the reasons set out in the preamble, title 40, chapter I of the Code of Federal Regulations is proposed to be amended as set forth below.

PART 9 --  OMB approvals under the Paperwork Reduction Act

1. The authority citation for part 9 continues to read as follows:
	Authority:  7 U.S.C. 135 et seq., 136-136y; 15 U.S.C. 2001, 2003, 2005, 2006, 2601-2671; 21 U.S.C. 331j, 346a, 348; 31 U.S.C. 9701; 33 U.S.C. 1251 et seq., 1311, 1313d, 1314, 1318 1321, 1326, 1330, 1342 1344, 1345 (d) and (e), 1361; E.O. 11735, 38 FR 21243, 3 CFR, 1971-1975 Comp. p. 973; 42 U.S.C. 241, 242b, 243, 246, 300f, 300g, 300g-1, 300g-2, 300g-3, 300g-4, 300g-5, 300g-6, 300j-1, 300j-2, 300j-3, 300j-4, 300j-9, 1857 et seq., 6901-6992k, 7401-7671q, 7542, 9601-9657, 11023, 11048.


2. In § 9.1 the table is amended as follows:
a. By adding a new center heading and entry in numerical order for "1036.825".
b. By adding a new center heading and entry in numerical order for "1037.825".
c. By adding a new center heading and entry in numerical order for "1043.40  -  1043.95".
§ 9.1   OMB approvals under the Paperwork Reduction Act.
* * * * *
                                40 CFR citation
                                OMB control No.
* * * * * * *
      CONTROL OF EMISSIONS FROM NEW AND IN-USE HEAVY-DUTY HIGHWAY ENGINES
1036.825
2060-0678
* * * * * * *
            CONTROL OF EMISSIONS FROM NEW HEAVY-DUTY MOTOR VEHICLES
1037.825
2060-0678
CONTROL OF NOX, SOX, AND PM EMISSIONS FROM MARINE ENGINES AND VESSELS SUBJECT TO THE MARPOL PROTOCOL
1043.40  -  1043.95
2060-0641
* * * * * * *
            *	*	*	*	*


PART 22 -- CONSOLIDATED RULES OF PRACTICE GOVERNING THE ADMINISTRATIVE ASSESSMENT OF CIVIL PENALTIES AND THE REVOCATION/TERMINATION OR SUSPENSION OF PERMITS

3.      The authority citation for part 22 continues to read as follows:
Authority:   7 U.S.C. 136(l); 15 U.S.C. 2615; 33 U.S.C. 1319, 1342, 1361, 1415 and 1418; 42 U.S.C. 300g - 3(g), 6912, 6925, 6928, 6991e and 6992d; 42 U.S.C. 7413(d), 7524(c), 7541(c), 7545(d), 7547, 7601 and 7607(a), 9609, and 11045.


4.      Section 22.1 is amended by revising paragraph (a)(2) to read as follows:
§ 22.1   Scope of this part.
(a) * * *
(2) The assessment of any administrative civil penalty under sections 113(d), 205(c), 211(d) and 213(d) of the Clean Air Act, as amended (42 U.S.C. 7413(d), 7524(c), 7545(d) and 7547(d)), and a determination of nonconforming engines, vehicles or equipment under sections 207(c) and 213(d) of the Clean Air Act, as amended (42 U.S.C. 7541(c) and 7547(d));
* * * * *

5.      Section 22.34 is revised to read as follows:
§ 22.34   Supplemental rules governing the administrative assessment of civil penalties under the Clean Air Act.
(a) Scope. This section shall apply, in conjunction with §§22.1 through 22.32, in administrative proceedings to assess a civil penalty conducted under sections 113(d), 205(c), 211(d), and 213(d) of the Clean Air Act, as amended (42 U.S.C. 7413(d), 7524(c), 7545(d), and 7547(d)), and a determination of nonconforming engines, vehicles or equipment under sections 207(c) and 213(d) of the Clean Air Act, as amended (42 U.S.C. 7541(c) and 7547(d)). Where inconsistencies exist between this section and §§22.1 through 22.32, this section shall apply.
(b) Issuance of notice. Prior to the issuance of a final order assessing a civil penalty or a final determination of nonconforming engines, vehicles or equipment, the person to whom the order or determination is to be issued shall be given written notice of the proposed issuance of the order or determination. Service of a complaint or a consent agreement and final order pursuant to §22.13 satisfies these notice requirements.

PART 85 --  CONTROL OF AIR POLLUTION FROM MOBILE SOURCES

6.      The authority citation for part 85 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.

Subpart F -- Exemption of Clean Alternative Fuel Conversions From Tampering Prohibition

7.    Section 85.525 is revised to read as follows:
§85.525   Applicable standards.
To qualify for an exemption from the tampering prohibition, vehicles/engines that have been converted to operate on a different fuel must meet emission standards and related requirements as described in this section.  The modified vehicle/engine must meet the requirements that applied for the OEM vehicle/engine, or the most stringent OEM vehicle/engine standards in any allowable grouping. Fleet average standards do not apply unless clean alternative fuel conversions are specifically listed as subject to the standards.
(a) If the vehicle/engine was certified with a Family Emission Limit for NOX, NOX+HC, NOX+NMOG, or particulate matter, as noted on the vehicle/engine emission control information label, the modified vehicle/engine may not exceed this Family Emission Limit.
(b) Compliance with greenhouse gas emission standards is demonstrated as follows:
   (1) Subject to the following exceptions and special provisions, compliance with light-duty vehicle greenhouse gas emission standards is demonstrated by complying with the N2O and CH4 standards and provisions set forth in 40 CFR 86.1818-12(f)(1) and the in-use CO2 exhaust emission standard set forth in 40 CFR 86.1818-12(d) as determined by the OEM for the subconfiguration that is identical to the fuel conversion emission data vehicle (EDV):
      (i) If the OEM complied with the light-duty greenhouse gas standards using the fleet averaging option for N2O and CH4, as allowed under 40 CFR 86.1818-12(f)(2), the calculations of the carbon-related exhaust emissions require the input of grams/mile values for N2O and CH4, and you are not required to demonstrate compliance with the standalone CH4 and N2O standards.
      (ii) If the OEM complied with alternate standards for N2O and/or CH4, as allowed under 40 CFR 86.1818-12(f)(3), you may demonstrate compliance with the same alternate standards.
      (iii) If the OEM complied with the nitrous oxide (N2O) and methane (CH4) standards and provisions set forth in 40 CFR 86.1818-12(f)(1) or (f)(3), and the fuel conversion CO2 measured value is lower than the in-use CO2 exhaust emission standard, you also have the option to convert the difference between the in-use CO2 exhaust emission standard and the fuel conversion CO2 measured value into GHG equivalents of CH4 and/or N2O, using 298 g CO2 to represent 1 g N2O and 25 g CO2 to represent 1 g CH4. You may then subtract the applicable converted values from the fuel conversion measured values of CH4 and/or N2O to demonstrate compliance with the CH4 and/or N2O standards.
      (iv) Optionally, compliance with greenhouse gas emission requirements may be demonstrated by comparing emissions from the vehicle prior to the fuel conversion to the emissions after the fuel conversion. This comparison must be based on FTP test results from the emission data vehicle (EDV) representing the pre-conversion test group. The sum of CO2, CH4, and N2O shall be calculated for pre- and post-conversion FTP test results, where CH4 and N2O are weighted by their global warming potentials of 25 and 298, respectively. The post-conversion sum of these emissions must be lower than the pre-conversion conversion greenhouse gas emission results. CO2 emissions are calculated as specified in 40 CFR 600.113-12. If statements of compliance are applicable and accepted in lieu of measuring N2O, as permitted by EPA regulation, the comparison of the greenhouse gas results also need not measure or include N2O in the before and after emission comparisons.
   (2) Compliance with heavy-duty engine greenhouse gas emission standards is demonstrated by complying with the CO2, N2O, and CH4 standards (or FELs, as applicable) and provisions set forth in 40 CFR 1036.108 for the engine family that is represented by the fuel conversion emission data engine (EDE). The following additional provisions apply:
      (i) If the fuel conversion CO2 measured value is lower than the CO2 standard (or FEL, as applicable), you have the option to convert the difference between the CO2 standard (or FEL, as applicable) and the fuel conversion CO2 measured value into GHG equivalents of CH4 and/or N2O, using 298 g/hp-hr CO2 to represent 1 g/hp-hr N2O and 25 g/hp-hr CO2 to represent 1 g/hp-hr CH4. You may then subtract the applicable converted values from the fuel conversion measured values of CH4 and/or N2O to demonstrate compliance with the CH4 and/or N2O standards (or FEL, as applicable).
      (ii) Small volume conversion manufacturers may demonstrate compliance with N2O standards based on an engineering analysis.
      (iii) For conversions of engines installed in vocational vehicles subject to Phase 2 standards under 40 CFR 1037.105 or in tractors subject to Phase 2 standards under 40 CFR 1037.106, conversion manufacturers may omit a demonstration related to the vehicle-based standards, as long as they have a reasonable technical basis for believing that the modified vehicle continues to meet those standards. 
   (3) Subject to the following exceptions and special provisions, compliance with greenhouse gas emission standards for heavy-duty vehicles subject to 40 CFR 1037.104 is demonstrated by complying with the N2O and CH4 standards and provisions set forth in 40 CFR 1037.104 and the in-use CO2 exhaust emission standard set forth in 40 CFR 1037.104(b) as determined by the OEM for the subconfiguration that is identical to the fuel conversion emission data vehicle (EDV):
      (i) If the OEM complied with alternate standards for N2O and/or CH4, as allowed under 40 CFR 1037.104(c) you may demonstrate compliance with the same alternate standards.
      (ii) If you are unable to meet either the N2O or CH4 standards and your fuel conversion CO2 measured value is lower than the in-use CO2 exhaust emission standard, you may also convert the difference between the in-use CO2 exhaust emission standard and the fuel conversion CO2 measured value into GHG equivalents of CH4 and/or N2O, using 298 g CO2 to represent 1 g N2O, and 25 g CO2 to represent 1 g CH4. You may then subtract the applicable converted values from the fuel conversion measured values of CH4 and/or N2O to demonstrate compliance with the CH4 and/or N2O standards.
      (iii) You may alternatively comply with the greenhouse gas emission requirements by comparing emissions from the vehicle before and after the fuel conversion. This comparison must be based on FTP test result from the emission data vehicle (EDV) representing the pre-conversion test group. The sum of CO2, CH4, and N2O shall be calculated for pre- and post-conversion FTP test results, where CH4 and N2O are weighted by their global warming potentials of 25 and 298, respectively. The post-conversion sum of these emissions must be lower than the pre-conversion greenhouse gas emission result. Calculate CO2 emissions as specified in 40 CFR 600.113. If we waive N2O measurement requirements based on a statement of compliance, disregard N2O for all measurements and calculations under this paragraph (b)(3)(iii).
(c) Conversion systems for engines that would have qualified for chassis certification at the time of OEM certification may use those procedures, even if the OEM did not. Conversion manufacturers choosing this option must designate test groups using the appropriate criteria as described in this subpart and meet all vehicle chassis certification requirements set forth in 40 CFR part 86, subpart S.


Subpart O -- Urban Bus Rebuild Requirements

8.    Section 85.1406 is amended by revising paragraph (f)(2) to read as follows:
§ 85.1406 Certification.
*	*	*	*	*
(f)	*	*	*
(2) If the equipment certifier disagrees with such determination of nonconformity and so advises the Agency, the Administrator shall afford the equipment certifier and other interested persons an opportunity to present their views and evidence in support thereof at a public hearing conducted in accordance with procedures found in 40 CFR part 1068, subpart G. 

Subpart P -- Importation of Motor Vehicles And Motor Vehicle Engines

9.    	Section 85.1508 is amended by revising paragraph (c) to read as follows:
§ 85.1508   "In Use" inspections and recall requirements.
*	*	*	*	*
(c) A certificate holder will be notified whenever the Administrator has determined that a substantial number of a class or category of the certificate holder's vehicles or engines, although properly maintained and used, do not conform to the regulations prescribed under section 202 when in actual use throughout their useful lives (as determined under section 202(d)). After such notification, the Recall Regulations at 40 CFR part 1068, subpart G, shall govern the certificate holder's responsibilities and references to a manufacturer in the Recall Regulations shall apply to the certificate holder.

10.    	Section 85.1513 is amended by revising paragraph (e)(4) to read as follows:
§ 85.1513   Prohibited acts; penalties.
*	*	*	*	*
(e)	*	*	*
(4) Hearings on suspensions and revocations of certificates of conformity or of eligibility to perform modification/testing under §85.1509 shall be held in accordance with 40 CFR part 1068, subpart G.
*	*	*	*	*

Subpart R -- Exclusion and Exemption of Motor Vehicles and Motor Vehicle Engines

11.    Section 85.1701 is amended by revising paragraph (a)(1) to read as follows:
§85.1701   General applicability.
(a) *	*	*
(1) Beginning January 1, 2014, the exemption provisions of 40 CFR part 1068, subpart C, apply for heavy-duty motor vehicle engines regulated under 40 CFR part 86, subpart A, except that the competition exemption of 40 CFR 1068.235 and the hardship exemption provisions of 40 CFR 1068.245, 1068.250, and 1068.255 do not apply for motor vehicle engines.
*	*	*	*	*

12.    Section 85.1706 is amended by revising paragraph (b) to read as follows:
§85.1706   Pre-certification exemption.
*	*	*	*	*
(b) Any manufacturer that desires a pre-certification exemption and is in the business of importing, modifying or testing uncertified vehicles for resale under the provisions of 40 CFR 85.1501, et seq., must send the request to the Designated Compliance Officer as specified in 40 CFR 1068.30.  The Designated Compliance Officer may require such manufacturers to submit information regarding the general nature of the fleet activities, the number of vehicles involved, and a demonstration that adequate record-keeping procedures for control purposes will be employed.

Subpart S -- [Amended]

13.    Subpart S is revised to consist of § 85.1801, to read as follows:

Subpart S -- Recall Regulations

Sec.
85.1801   Recall regulations. 

Subpart S -- Recall Regulations
§85.1801  Recall regulations.
Recall regulations apply for motor vehicles and motor vehicle engines as specified in 40 CFR part 1068, subpart G.

Subpart T -- Emission Defect Reporting Requirements

14.    Section 85.1901 is revised to read as follows:
§ 85.1901   Applicability.
(a) The requirements of this subpart shall be applicable to all 1972 and later model year motor vehicles and motor vehicle engines, except that the provisions of 40 CFR 1068.501 apply instead for heavy-duty motor vehicle engines certified under 40 CFR part 86, subpart A, and for heavy-duty motor vehicles certified under 40 CFR part 1037 starting January 1, 2018.
(b) The requirement to report emission-related defects affecting a given class or category of vehicles or engines shall remain applicable for five years from the end of the model year in which such vehicles or engines were manufactured.

15.    Section 85.1902 is revised to read as follows:
§ 85.1902   Definitions.
For the purposes of this subpart and unless otherwise noted:
(a) Act means the Clean Air Act, 42 U.S.C.7401-7671q, as amended.
(b) Emission-related defect means:
   (1) A defect in design, materials, or workmanship in a device, system, or assembly described in the approved Application for Certification that affects any parameter or specification enumerated in appendix VIII of this part; or
   (2) A defect in the design, materials, or workmanship in one or more emission-related parts, components, systems, software or elements of design which must function properly to ensure continued compliance with emission standards.
(c) Useful life has the meaning given in section 202(d) of the Act (42 U.S.C.7521(d)) and regulations promulgated thereunder.
(d) Voluntary emissions recall means a repair, adjustment, or modification program voluntarily initiated and conducted by a manufacturer to remedy any emission-related defect for which direct notification of vehicle or engine owners has been provided, including programs to remedy defects related to emissions standards for CO2,CH4, N2O, and/or carbon-related exhaust emissions.
(e) Ultimate purchaser has the meaning given in section 216 of the Act (42 U.S.C.7550).
(f) Manufacturer has the meaning given in section 216 of the Act (42 U.S.C.7550).


PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES AND ENGINES
16. The authority citation for part 86 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.

17. Section 86.1 is amended by removing and reserving paragraphs (g)(4) and (5) and revising paragraphs (b)(1), (b)(10), (b)(11), and (e)(5) to read as follows:
§ 86.1   Reference materials.
* * * * *
(b) * * *
(1) ASTM C1549-14, Standard Test Method for Determination of Solar Reflectance Near Ambient Temperature Using a Portable Solar Reflectometer, approved September 1, 2014, IBR approved for §86.1869-12(b). 
* * * * *
(10) ASTM E903-12, Standard Test Method for Solar Absorptance, Reflectance, and Transmittance of Materials Using Integrating Spheres, approved December 1, 2012, IBR approved for §86.1869-12(b) ("ASTM E903"). 
(11) ASTM E1918-06 (Reapproved 2015), Standard Test Method for Measuring Solar Reflectance of Horizontal and Low-Sloped Surfaces in the Field, approved February 1, 2015, IBR approved for §86.1869-12(b). 
* * * * *
(e) * * *
(5) ISO 13837:2008(E), Road Vehicles -- Safety glazing materials -- Method for the determination of solar transmittance, First edition, April 15, 2008, IBR approved for §86.1869-12(b).
*	*	*	*	*
18. 
Subpart A -- General Provisions for Emission Regulations for 1977 and Later Model Year New Light-Duty Vehicles, Light-Duty Trucks and Heavy-Duty Engines, and For 1985 and Later Model Year New Gasoline Fueled, Natural Gas-Fueled, Liquefied Petroleum Gas-Fueled and Methanol-Fueled Heavy-Duty Vehicles

§ 86.001-35 [Removed]
19. Remove § 86.001-35.

20. Section 86.004-2 is amended by revising the definition of "Emergency vehicle" to read as follows:
§ 86.004-2   Compliance with emission standards.
*	*	*	*	*
Emergency vehicle has the meaning given in 40 CFR 1037.801.
*	*	*	*	*

21. Section 86.004-28 is amended by revising paragraph (i) to read as follows:
§ 86.004-28   Compliance with emission standards.
*	*	*	*	*
(i) For engines using aftertreatment technology with infrequent regeneration events that may occur during testing, take one of the following approaches to account for the emission impact of regeneration:
   (1) You may use the calculation methodology described in 40 CFR 1065.680 to adjust measured emission results. Do this by developing an upward adjustment factor and a downward adjustment factor for each pollutant based on measured emission data and observed regeneration frequency as follows:  
      (i) Adjustment factors should generally apply to an entire engine family, but you may develop separate adjustment factors for different configurations within an engine family. Use the adjustment factors from this section for all testing for the engine family. 
      (ii) You may use carryover or carry-across data to establish adjustment factors for an engine family as described in the §86.001-24(f), consistent with good engineering judgment. 
      (iii) Determine the frequency of regeneration, F, as described in 40 CFR 1065.680 from in-use operating data or from running repetitive tests in a laboratory.  For any replicate transient testing in the laboratory include cold-start operation in proportion to the weighting factors specified in §86.007-11(a)(2)(v) from testing or you may determine its effect analytically using good engineering judgment.  If the engine is designed for regeneration at fixed time intervals, you may apply good engineering judgment to determine F based on those design parameters.  All adjustment factors for regeneration are additive.  Calculate an adjustment factor using a composite value of F that combines steady-state and transient operation.  Establish a composite value of F applying for both steady-state and transient testing based on the following weightings:
         (A) For heavy heavy-duty engines, 75 percent steady-state operation and 25 percent transient operation.
         (B) For all other engines, 60 percent for steady-state operation and 40 percent transient operation.  
      (iv) Adjust measured emission results from transient testing using one of the following methods:
         (A) Treat cold-start testing and hot-start testing together as a single test segment as described in §86.007-11(a)(2)(v) for adjusting measured emission results under this paragraph (i)(1).  Apply the adjustment factor to the composite emission result.
         (B) You may alternatively apply the adjustment factor only to the hot-start test result if your aftertreatment technology does not regenerate during cold operation, including the cold-start HDDE-FTP.  If we ask for it, you must demonstrate this by engineering analysis or by test data.
      (v) Identify the value of F in each application for the certification for which it applies. 
   (2) You may ask us to approve an alternate methodology to account for regeneration events.  We will generally limit approval to cases where your engines use aftertreatment technology with extremely infrequent regeneration and you are unable to apply the provisions of this section.
   (3) You may choose to make no adjustments to measured emission results if you determine that regeneration does not significantly affect emission levels for an engine family (or configuration) or if it is not practical to identify when regeneration occurs. If you choose not to make adjustments under paragraph (i)(1) or (i)(2) of this section, your engines must meet emission standards for all testing, without regard to regeneration.

§§ 86.004-30 -- [Removed]
22. Remove §§ 86.004-30.

23.    Section 86.007-11 is amended by revising paragraphs (c) and (g) to read as follows:
§86.007-11   Emission standards and supplemental requirements for 2007 and later model year diesel heavy-duty engines and vehicles.
*	*	*	*	*
(c) No crankcase emissions shall be discharged directly into the ambient atmosphere from any new 2007 or later model year diesel-cycle HDE, with the following exception: diesel-fueled HDEs equipped with turbochargers, pumps, blowers, or superchargers for air induction may discharge crankcase emissions to the ambient atmosphere if the emissions are added to the exhaust emissions (either physically or mathematically) during all emission testing. Manufacturers taking advantage of this exception must manufacture the engines so that all crankcase emission can be routed into a dilution tunnel (or other sampling system approved in advance by the Administrator), and must account for deterioration in crankcase emissions when determining exhaust deterioration factors. For the purpose of this paragraph (c), crankcase emissions that are routed to the exhaust upstream of exhaust aftertreatment during all operation are not considered to be "discharged directly into the ambient atmosphere."
*	*	*	*	*
(g) Model year 2018 and later engines at or above 56 kW that will be installed in specialty vehicles as allowed by 40 CFR 1037.605 may meet alternate emission standards as follows:
   (1) The engines must be of a configuration that is identical to one that is certified under 40 CFR part 1039.  
   (2) Except as specified in this paragraph (g), engines certified under this paragraph (g) must meet all the requirements that apply under 40 CFR part 1039 instead of the comparable provisions in this subpart A.  In your annual production report, count these engines separately and identify the vehicle manufacturers that will be installing them.  Treat these engines as part of the corresponding engine family under 40 CFR part 1039 for compliance purposes such as selective enforcement audits, in-use testing, defect reporting, and recall.
   (3) The engines must be labeled as described in §86.095-35. Engines certified under this paragraph (g) may not have the label specified for nonroad engines in 40 CFR part 1039.
   (4) In a separate application for a certificate of conformity, identify the corresponding nonroad engine family, describe the label required under this paragraph (g), state that you meet applicable diagnostic requirements under 40 CFR part 1039, and identify your projected U.S.-directed production volume.
   (5) No additional certification fee applies for engines certified under this paragraph (g).
   (6) Engines certified under this paragraph (g) may not generate or use emission credits under this part or under 40 CFR part 1039.  The vehicles in which these engines are installed may generate or use emission credits as described in 40 CFR part 1037.
*	*	*	*	*

§ 86.007-30 -- [Amended]   
24.    Section 86.007-30 is amended by removing and reserving paragraph (d). 

§ 86.007-35 [Removed]
25. Remove § 86.007-35.

26.    Section 86.008-10 is amended by removing and reserving paragraph (f) and revising paragraph (g) to read as follows:
§86.008-10  Emission standards for 2008 and later model year Otto-cycle heavy-duty engines and vehicles.
*	*	*	*	*
(f) [Reserved]
(g) Model year 2018 and later engines that will be installed in specialty vehicles as allowed by 40 CFR 1037.605 may meet alternate emission standards as follows:
   (1) The engines must be of a configuration that is identical to one that is certified under 40 CFR part 1048 to the Blue Sky standards under 40 CFR 1048.140. 
   (2) Except as specified in this paragraph (g), engines certified under this paragraph (g) must meet all the requirements that apply under 40 CFR part 1048 instead of the comparable provisions in this subpart A.  In your annual production report, count these engines separately and identify the vehicle manufacturers that will be installing them.  Treat these engines as part of the corresponding engine family under 40 CFR part 1048 for compliance purposes such as production-line testing, in-use testing, defect reporting, and recall.
   (3) The engines must be labeled as described in §86.095-35. Engines certified under this paragraph (g) may not have the label specified for nonroad engines in 40 CFR part 1048.
   (4) In a separate application for a certificate of conformity, identify the corresponding nonroad engine family, describe the label required under this paragraph (g), state that you meet applicable diagnostic requirements under 40 CFR part 1048, and identify your projected U.S.-directed production volume.
   (5) No additional certification fee applies for engines certified under this paragraph (g).
   (6) Engines certified under this paragraph (g) may not generate or use emission credits under this part.  The vehicles in which these engines are installed may generate or use emission credits as described in 40 CFR part 1037.

27.    Section 86.078-6 is revised to read as follows:
§ 86.078-6   Hearings on certification.
If a manufacturer's request for a hearing is approved, EPA will follow the hearing procedures specified in 40 CFR part 1068, subpart G.

28.    Section 86.084-4 is revised to read as follows:
§86.084-4   Section numbering; construction.
(a) The model year of initial applicability is indicated by the last two digits of the 5-digit group. A section remains in effect for subsequent model years until it is superseded. The number following the hyphen designates what previous section is replaced by a future regulation.  For example, § 86.005-1 applies to model year 2005 and later vehicles and engines until it is superseded.  Section 86.016-1 takes effect with model year 2016 and continues to apply until it is superseded; §86.005-1 no longer applies starting with model year 2016, except as specified by §86.016-1.  
(b) If the regulation references a section that has been superseded or no longer exists, this should be understood as a reference to the same section for the appropriate model year.  For example, if the regulation refers to §86.001-30, it should be taken as a reference to §86.007-30 or any later version of that section that applies for the appropriate model year.  However, this does not apply if the reference to a superseded section specifically states that the older provision applies instead of any updated provisions from the section in effect for the current model year; this occurs most often as part of the transition to new emission standards.
(c) Except where indicated, the language in this subpart applies to both vehicles and engines. In many instances, language referring to engines is enclosed in parentheses and immediately follows the language discussing vehicles.

§86.085-37---[Amended]
29.    Section 86.085-37 is amended by removing and reserving paragraph (b) and removing paragraph (d).

§§ 86.094-30 -- [Removed]
30.    Remove §§ 86.094-30.

31.    Section 86.095-35 is amended by revising paragraphs (a) introductory text, (a)(3)(iii)(H) through (K), (c), and (i) to read as follows:
§86.095-35   Labeling.
(a) The manufacturer of any motor vehicle (or motor vehicle engine) subject to the applicable emission standards (and family emission limits, as appropriate) of this subpart, shall, at the time of manufacture, affix a permanent legible label, of the type and in the manner described below, containing the information hereinafter provided, to all production models of such vehicles (or engines) available for sale to the public and covered by a Certificate of Conformity under §86.007-30(a).
*	*	*	*	*
(3)	*	*	*
(iii)		*	*	*
(H) The prominent statement: "This engine conforms to U.S. EPA regulations applicable to XXXX Model Year New Heavy-Duty Engines.";
(I) If the manufacturer has an alternate useful life period under the provisions of §86.094-21(f), the prominent statement: "This engine has been certified to meet U.S. EPA standards for a useful-life period of XXX miles or XXX hours of operation, whichever occurs first. This engine's actual life may vary depending on its service application." The manufacturer may alter this statement only to express the assigned alternate useful life in terms other than miles or hours (e.g., years, or hours only);
(J) For diesel engines, the prominent statement: "This engine has a primary intended service application as a XXX heavy-duty engine." (The primary intended service applications are light, medium, and heavy, as defined in §86.090-2.);
(K) For engines certified under the alternative standards specified in §86.007-11(g) or §86.008-10(g), the following statement:  "This engine is certified for only in specialty vehicles as specified in [40 CFR 86.007-11 or 40 CFR 86.008-10]";
*	*	*	*	*
(c) Vehicles powered by model year 2007 through 2013 diesel-fueled engines must include permanent, readily visible labels on the dashboard (or instrument panel) and near all fuel inlets that state "Use Ultra Low Sulfur Diesel Fuel Only"; or "Ultra Low Sulfur Diesel Fuel Only".
*	*	*	*	*
(i) The Administrator may approve in advance other label content and formats, provided the alternative label contains information consistent with this section.

Subpart E -- Emission Regulations for 1978 and Later New Motorcycles, General Provisions

32.    Section 86.443-78 is revised to read as follows:
§ 86.443-78   Request for hearing.
The manufacturer may request a hearing on the Administrator's determination as described in 40 CFR part 1068, subpart G. 

33.    Section 86.444-78 is revised to read as follows:
§ 86.444-78   Hearings on certification.
If a manufacturer's request for a hearing is approved, EPA will follow the hearing procedures specified in 40 CFR part 1068, subpart G.


Subpart G -- Selective Enforcement Auditing of New Light-Duty Vehicles, Light-Duty Trucks, and Heavy-Duty Vehicles

34.    Section 86.614-84 is revised to read as follows:
§ 86.614-84   Hearings on suspension, revocation, and voiding of certificates of conformity.
The provisions of 40 CFR part 1068, subpart G, apply if a manufacturer requests a hearing regarding suspension, revocation or voiding of certificates of conformity.

35.    Section 86.615-84 is revised to read as follows:
§ 86.615-84   Treatment of confidential information.
The provisions of 40 CFR 1068.10 apply for information you consider confidential.


Subpart L -- Nonconformance Penalties for Gasoline-Fueled and Diesel Heavy-Duty Engines and Heavy-Duty Vehicles, Including Light-Duty Trucks

§86.1103-87 -- [Removed] 
36. Section 86.1103-87 is removed.

37. A new §86.1103-2016 is added to subpart L to read as follows: 
§86.1103-2016  Criteria for availability of nonconformance penalties.
(a) General.  This section describes the three criteria EPA will use to use to evaluate whether NCPs are appropriate under the Clean Air Act for a given pollutant and a given subclass of heavy-duty engines and heavy-duty vehicles.  Together, these criteria evaluate the likelihood that a manufacturer will be technologically unable to meet a standard on time.  Note that since the first two of these criteria are intended to address the question of whether a given standard creates the possibility for this to occur, they are evaluated before the third criterion that addresses the likelihood that the possibility will actually happen.
(b) Criteria. We will establish NCPs for a given pollutant and subclass when we find that each of the following criteria is met:
   (1) There is a new or revised emission standard is more stringent than the previous standard for the pollutant, or an existing standard for that pollutant has become more difficult to achieve because of a new or revised standard.  When evaluating this criterion, EPA will consider a new or revised standard to be "new" or "revised" until the point at which all manufacturers already producing U.S.-directed engines or vehicles within the subclass have achieved full compliance with the standard.  For purposes of this criterion, EPA will generally not consider compliance using banked emission credits to be "full compliance".
   (2) Substantial work is required to meet the standard for which the NCP is offered, as evaluated from the point at which the standard was adopted or revised (or the point at which the standard became more difficult meet because another standard was adopted or revised).  Substantial work, as used in this paragraph (b)(2), means the application of technology not previously used in an engine or vehicle class or subclass, or the significant modification of existing technology or design parameters, needed to bring the vehicle or engine into compliance with either the more stringent new or revised standard or an existing standard which becomes more difficult to achieve because of a new or revised standard.  Note that where this criterion is evaluated after the work has been completed, the criterion would be interpreted as whether or not substantial work was required to meet the standard.
   (3) There is or is likely to be a technological laggard for the subclass.  Note that a technological laggard is a manufacturer that is unable to meet the standard for one or more products within the subclass for technological reasons.  
   (c)  Evaluation.  (1) We will generally evaluate these criteria in sequence.  Where we find that the first criterion has not been met, we will not consider the other two criteria.  Where we find that the first criterion has been met but not the second, we will not consider the third criterion.  We may announce our findings separately or simultaneously. 
   (2) We may consider any available information in making our findings.  
   (3) Where we are uncertain whether the first and/or second criteria have been met, we may presume that they have been met and make our decision based solely on whether or not the third criterion has been met.  
   (4) Where we find that a manufacturer will fail to meet a standard but are uncertain whether the failure is a technological failure, we may presume that the manufacturer is a technological laggard.

§86.1104-87 -- [Removed] 
38. Section 86.1104-87 is removed.

39. Section 86.1104-2016 is added to subpart L to read as follows:
§ 86.1104-2016   Determination of upper limits.
EPA shall set a separate upper limit for each phase of NCPs and for each service class.  
(a) Except as provided in paragraphs (b), (c) and (d) of this section, the upper limit shall be set as follows:  
(1) The upper limit applicable to a pollutant emission standard for a subclass of heavy-duty engines or heavy-duty vehicles for which an NCP is established in accordance with §86.1103 - 87, shall be the previous pollutant emission standard for that subclass.
(2) If a manufacturer participates in any of the emissions averaging, trading, or banking programs, and carries over certification of an engine family from the prior model year, the upper limit for that engine family shall be the family emission limit of the prior model year, unless the family emission limit is less than the upper limit determined in paragraph (a) of this section.
(b) If no previous standard existed for the pollutant under paragraph (a) of this section, the upper limit will be developed by EPA during rulemaking.
(c) EPA may set the upper limit during rulemaking at a level below the  level specified in paragraph (a) of this section if we determine that a lower level is achievable by all engines or vehicles in that subclass.
(d) EPA may set the upper limit at a level above the level specified in paragraph (a) of this section if we determine that such level will not be achievable by all engines or vehicles in that subclass.  

40. Section 86.1105-87 is amended by revising paragraph (e) and removing paragraph (j) to read as follows:
§86.1105-87 --  Emission standards for which nonconformance penalties are available. 
*	*	*	*	*
(e) The values of COC50, COC90, and MC50 in paragraphs (a) and (b) of this section are expressed in December 1984 dollars. The values of COC50, COC90, and MC50 in paragraphs (c) and (d) of this section are expressed in December 1989 dollars. The values of COC50, COC90, and MC50 in paragraph (f) of this section are expressed in December 1991 dollars. The values of COC50, COC90, and MC50 in paragraphs (g) and (h) of this section are expressed in December 1994 dollars. The values of COC50, COC90, and MC50 in paragraph (i) of this section are expressed in December 2001 dollars.    These values shall be adjusted for inflation to dollars as of January of the calendar year preceding the model year in which the NCP is first available by using the change in the overall Consumer Price Index, and rounded to the nearest whole dollar in accordance with 40 CFR 1065.20. 
*	*	*	*	*

41. Section 86.1113-87 is amended by revising paragraphs (f) and (g)(3) introductory text to read as follows: 
§86.1113-87   Calculation and payment of penalty.
*	*	*	*	*
(f) A manufacturer may request a hearing under 40 CFR part 1068, subpart G, as to whether the compliance level (including a compliance level in excess of the upper limit) was determined properly.
(g)	*	*	*
(3) A manufacturer making payment under paragraph (g)(1) or (g)(2) of this section shall submit the following information by each quarterly due date to the Designated Compliance Officer (see 40 CFR 1036.801). This information shall be submitted even if a manufacturer has no NCP production in a given quarter.
*	*	*	*	*

42.    Section 86.1115-87 is revised to read as follows:
§ 86.1115-87   Hearing procedures for nonconformance determinations and penalties.
The provisions of 40 CFR part 1068, subpart G, apply if a manufacturer requests a hearing regarding penalties under this subpart.

Subpart N -- Exhaust Test Procedures for Heavy-Duty Engines

43. Section 86.1362 is amended by revising paragraph (a) to read as follows:
§ 86.1362   Steady-state testing with a ramped-modal cycle.
*	*	*	*	*
(a) Measure emissions by testing the engine on a dynamometer with the following ramped-modal duty cycle to determine whether it meets the applicable steady-state emission standards:

                                      RMC
                                     mode
                                 Time in mode
                                   (seconds)
                                    Engine
                                  speed [1,2]
                                    Torque
                                (percent) [2,3]
                          CO2 Weighting (percent)[4]
1a Steady-state
170
Warm Idle
0
                                       6
1b Transition
20
Linear Transition
Linear Transition.
                                       
2a Steady-state
173
A
100
                                       9
2b Transition
20
Linear Transition
Linear Transition.
                                       
3a Steady-state
219
B
50
                                      10
3b Transition
20
B
Linear Transition.
                                       
4a Steady-state
217
B
75
                                      10
4b Transition
20
Linear Transition
Linear Transition.
                                       
5a Steady-state
103
A
50
                                      12
5b Transition
20
A
Linear Transition.
                                       
6a Steady-state
100
A
75
                                      12
6b Transition
20
A
Linear Transition.
                                       
7a Steady-state
103
A
25
                                      12
7b Transition
20
Linear Transition
Linear Transition.
                                       
8a Steady-state
194
B
100
                                       9
8b Transition
20
B
Linear Transition.
                                       
9a Steady-state
218
B
25
                                       9
9b Transition
20
Linear Transition
Linear Transition.
                                       
10a Steady-state
171
C
100
                                       2
10b Transition
20
C
Linear Transition.
                                       
11a Steady-state
102
C
25
                                       1
11b Transition
20
C
Linear Transition.
                                       
12a Steady-state
100
C
75
                                       1
12b Transition
20
C
Linear Transition.
                                       
13a Steady-state
102
C
50
                                       1
13b Transition
20
Linear Transition
Linear Transition.
                                       
14 Steady-state
168
Warm Idle
0
                                       6
[1]Speed terms are defined in 40 CFR part 1065.
2Advance from one mode to the next within a 20-second transition phase. During the transition phase, command a linear progression from the speed or torque setting of the current mode to the speed or torque setting of the next mode.
[3]The percent torque is relative to maximum torque at the commanded engine speed.
[4]Use the specified weighting factors to calculate composite emission results for CO2 as specified in 40 CFR 1036.501.
*	*	*	*	*


44. Section 86.1370 is amended by revising paragraphs (g) and (h) and adding paragraphs (i) and (j) to read as follows:
§86.1370   Not-To-Exceed test procedures.
*	*	*	*	*
(g) You may exclude emission data based on catalytic aftertreatment temperatures as follows:
   (1) For an engine equipped with a catalytic NOx aftertreatment system, exclude NOx emission data that is collected when the exhaust temperature at any time during the NTE event is less than 250 °C.
   (2) For an engine equipped with an oxidizing catalytic aftertreatment system, exclude NMHC and CO emission data that is collected if the exhaust temperature is less than 250 °C at any time during the NTE event.
   (3) Using good engineering judgment, measure exhaust temperature within 30 cm downstream of the last applicable catalytic aftertreatment device.  Where there are parallel paths, use good engineering judgment to measure the temperature within 30 cm downstream of the last applicable catalytic aftertreatment device in the path with the greatest exhaust flow.
--------------------------------------------------------------------------------
(h) Any emission measurements corresponding to engine operating conditions that do not qualify as a valid NTE sampling event may be excluded from the determination of the vehicle-pass ratio specified in §86.1912 for the specific pollutant.
(i) Start emission sampling at the beginning of each valid NTE sampling event, except as needed to allow for zeroing or conditioning the PEMS.  For gaseous emissions, PEMS preparation must be complete for all analyzers before starting emission sampling.
(j) Emergency vehicle AECDs. If your engine family includes engines with one or more approved AECDs for emergency vehicle applications under paragraph (4) of the definition of "defeat device" in §86.1803, the NTE emission limits do not apply when any of these AECDs are active.

Subpart S -- General Compliance Provisions for Control of Air Pollution From New and In-Use Light-Duty Vehicles, Light-Duty Trucks, and Heavy-Duty Vehicles

§ 86.1801-12 -- [Amended]
45. Section 86.1801-12 is amended by removing and reserving paragraph (a)(2)(ii).

46. Section 86.1802-01 is revised to read as follows:
§86.1802-01   Section numbering; construction.
(a) Section numbering. The model year of initial applicability is indicated by the section number. The two digits following the hyphen designate the first model year for which a section is applicable. The section continues to apply to subsequent model years unless a later model year section is adopted. Example: Section 86.18xx-10 applies to model year 2010 and later vehicles. If a §86.18xx-17 is promulgated, it would apply beginning with the 2017 model year; §86.18xx-10 would apply only to model years 2010 through 2016, except as specified in §86.18xx-17.
(b) A section reference without a model year suffix refers to the section applicable for the appropriate model year.
(c) If the regulation references a section that has been superseded or no longer exists, this should be understood as a reference to the same section for the appropriate model year.  For example, if the regulation refers to §86.1845-01, it should be taken as a reference to §86.1845-04 or any later version of §86.1845 that applies for the appropriate model year.  However, this does not apply if the reference to a superseded section specifically states that the older provision applies instead of any updated provisions from the section in effect for the current model year; this occurs most often as part of the transition to new emission standards.

47.    Section 86.1803-01 is amended by revising the definitions for "Base level", "Base tire", "Base vehicle", "Basic engine", "Carbon-related exhaust emissions (CREE)", "Configuration", paragraph (1) of "Emergency vehicle", "Engine code", "Highway Fuel Economy Test Procedure (HFET)", "Model type", "Production volume", "Subconfiguration", "Transmission class", and "Transmission configuration" and adding definitions for "Cab-complete vehicle" and "Transmission type" to read as follows:
§86.1803-01   Definitions.
*	*	*	*	*
	Base level has the meaning given in 40 CFR 600.002.
	Base tire has the meaning given in 40 CFR 600.002.
	Base vehicle has the meaning given in 40 CFR 600.002.
	Basic engine has the meaning given in 40 CFR 600.002.
*	*	*	*	*
Cab-complete vehicle means a heavy-duty vehicle that is first sold as an incomplete vehicle that substantially includes its cab.  Vehicles known commercially as chassis-cabs, cab-chassis, box-deletes, bed-deletes, cut-away vans are considered cab-complete vehicles.  For purposes of this definition, a cab includes a steering column and passenger compartment.  Note that a vehicle lacking some components of the cab is a cab-complete vehicle if it substantially includes the cab.
*	*	*	*	*
	Carbon-related exhaust emissions (CREE) has the meaning given in 40 CFR 600.002.
*	*	*	*	*
Configuration means one of the following:
(1) For LDV, LDT, and MDPV, configuration means a subclassification within a test group which is based on engine code, inertia weight class, transmission type and gear ratios, final drive ratio, and other parameters which may be designated by the Administrator.  
(2) For HDV, configuration has the meaning given in §86.1819-14(d)(12).
*	*	*	*	*
Emergency vehicle means one of the following:
(1) For the greenhouse gas emission standards in §§86.1818 and 86.1819, emergency vehicle means a motor vehicle manufactured primarily for use as an ambulance or combination ambulance-hearse or for use by the United States Government or a State or local government for law enforcement.
*	*	*	*	*
Engine code one of the following:
(1) For LDV, LDT, and MDPV, engine code means a unique combination within a test group of displacement, fuel injection (or carburetor) calibration, choke calibration, distributor calibration, auxiliary emission control devices, and other engine and emission control system components specified by the Administrator. For electric vehicles, engine code means a unique combination of manufacturer, electric traction motor, motor configuration, motor controller, and energy storage device. 
(2) For HDV, engine code has the meaning given in §86.1819-14(d)(12).
*	*	*	*	*
	Highway Fuel Economy Test Procedure (HFET) has the meaning given in 40 CFR 600.002.
*	*	*	*	*
	Model type has the meaning given in 40 CFR 600.002.
*	*	*	*	*
	Production volume has the meaning given in 40 CFR 600.002.
*	*	*	*	*
	Subconfiguration means one of the following:
(1) For LDV, LDT, and MDPV, subconfiguration has the meaning given in 40 CFR 600.002.
(2) For HDV, subconfiguration has the meaning given in §86.1819-14(d)(12).
*	*	*	*	*
	Transmission class has the meaning given in 40 CFR 600.002.
	Transmission configuration has the meaning given in 40 CFR 600.002.
Transmission type means the basic type of the transmission (e.g., automatic, manual, automated manual, semi-automatic, or continuously variable) and does not include the drive system of the vehicle (e.g., front-wheel drive, rear-wheel drive, or four-wheel drive).  
*	*	*	*	*

48. Section 86.1805-17 is amended by revising paragraphs (a) and (b) to read as follows:
§ 86.1805-17   Useful life.
(a) General provisions. The useful life values specified in this section apply for all exhaust, evaporative, refueling, and OBD emission requirements described in this subpart, except for standards that are specified to apply only at certification. These useful life requirements also apply to all air conditioning leakage credits, air conditioning efficiency credits, and other credit programs used by the manufacturer to comply with the fleet-average CO2 emission standards in § 86.1818.  Useful life values are specified as a given number of calendar years or miles of driving, whichever comes first.
(b) Greenhouse gas pollutants.  The emission standards in § 86.1818 apply for a useful life of 10 years or 120,000 miles for LDV and LLDT and 11 years or 120,000 miles for HLDT and MDPV.  For HDV, the emission standards in § 86.1819 apply for a useful life of 11 years or 120,000 miles through model year 2020, and for a useful life of 15 years or 150,000 miles in model year 2021 and later.  Manufacturers may certify based on the useful life as specified in paragraph (d) of this section if it is different than the useful life specified in this paragraph (b).
*	*	*	*	*

49. Section 86.1816-18 is amended by revising paragraph (a) introductory text to read as follows:
§ 86.1816-18   Emission standards for heavy-duty vehicles.
(a) Applicability and general provisions. This section describes exhaust emission standards that apply for model year 2018 and later complete heavy-duty vehicles.  These standards are optional for incomplete heavy-duty vehicles and for heavy duty vehicles above 14,000 pounds GVWR as described in § 86.1801.  Greenhouse gas emission standards are specified in § 86.1818 for MDPVs and in §86.1819 for other HDV.  See § 86.1813 for evaporative and refueling emission standards.  This section may apply to vehicles before model year 2018 as specified in paragraph (b)(11) of this section.  Separate requirements apply for MDPVs as specified in § 86.1811.  See subpart A of this part for requirements that apply for incomplete heavy-duty vehicles and for heavy-duty engines certified independent of the chassis.  The following general provisions apply:
*	*	*	*	*

50. Section 86.1818-12 is amended by revising paragraphs (a)(2), (c)(4), and (f)(4) to read as follows:
§ 86.1818-12   Greenhouse gas emission standards for light-duty vehicles, light-duty trucks, and medium-duty passenger vehicles.
(a)	*	*	*
(2) The standards specified in this section apply for testing at both low-altitude conditions and high-altitude conditions.  However, manufacturers must submit an engineering evaluation indicating that common calibration approaches are utilized at high altitude instead of performing testing for certification, consistent with §86.1829. Any deviation from low altitude emission control practices must be included in the auxiliary emission control device (AECD) descriptions submitted at certification. Any AECD specific to high altitude requires engineering emission data for EPA evaluation to quantify any emission impact and determine the validity of the AECD.
*	*	*	*	*
(c) * * *
(4) Emergency vehicles.  Emergency vehicles may be excluded from the emission standards described in this section. The manufacturer must notify the Administrator that they are making such an election in the model year reports required under §600.512 of this chapter. Such vehicles should be excluded from both the calculation of the fleet average standard for a manufacturer under this paragraph (c) and from the calculation of the fleet average carbon-related exhaust emissions in §600.510-12.  
* * * * *
(f) * * *
(4) CO2-equivalent debits. CO2-equivalent debits for test groups using an alternative N2O and/or CH4 standard as determined under paragraph (f)(3) of this section shall be calculated according to the following equation and rounded to the nearest whole megagram:
Debits = [GWP x (Production) x (AltStd -- Std) x VLM] / 1,000,000
Where:
Debits = N2O or CH4 CO2-equivalent debits, in Megagrams, for a test group using an alternative N2O or CH4 standard, rounded to the nearest whole Megagram;
GWP = 25 if calculating CH4 debits and 298 if calculating N2O debits;
Production = The number of vehicles of that test group domestically produced plus those imported as defined in §600.511 of this chapter;
AltStd = The alternative standard (N2O or CH4) selected by the manufacturer under paragraph (f)(3) of this section;
Std = The exhaust emission standard for N2O or CH4 specified in paragraph (f)(1) of this section; and
VLM = 195,264 for passenger automobiles and 225,865 for light trucks.
* * * * *

51. A new § 86.1819-14 is added to subpart S to read as follows:
§ 86.1819-14  Greenhouse gas emission standards for heavy-duty vehicles.
This section describes exhaust emission standards for CO2, CH4, and N2O for heavy-duty vehicles.  The standards of this section apply for model year 2014 and later vehicles that are chassis-certified with respect to criteria pollutants under this subpart S.  Additional heavy-duty vehicles may be optionally subject to the standards of this section as allowed under paragraph (j) of this section.  Any heavy-duty vehicles not subject to standards under this section are instead subject to greenhouse gas standards under 40 CFR part 1037, and engines installed in these vehicles are subject to standards under 40 CFR part 1036.  If you are not the engine manufacturer, you must notify the engine manufacturer that its engines are subject to 40 CFR part 1036 if you intend to use their engines in vehicles that are not subject to standards under this section.  Vehicles produced by small businesses may be excluded from the standards of this section as described in paragraph (j)(3) of this section.
(a) Fleet-average CO2 emission standards.  Fleet-average CO2 emission standards apply for the full useful life for each manufacturer as follows:
   (1) Calculate a work factor, WF, for each vehicle subconfiguration (or group of subconfigurations allowed under paragraph (a)(4) of this section), rounded to the nearest pound, using the following equation: 
   WF = 0.75x (GVWR - Curb Weight + xwd) + 0.25 x (GCWR  -  GVWR)
   Where:
   xwd = 500 pounds if the vehicle has four-wheel drive or all-wheel drive; xwd = 0 pounds for all other vehicles.
   (2) Using the appropriate work factor, calculate a target value for each vehicle subconfiguration (or group of subconfigurations allowed under paragraph (a)(4) of this section) you produce using one of the following equations, or the phase-in provisions in paragraph (k)(4) of this section, rounding to the nearest whole g/mile:
      (i) For model year 2025 and later vehicles with spark-ignition engines: CO2 Target (g/mile) = 0.0383 x WF + 295
      (ii) For model year 2025 and later vehicles with compression-ignition engines or with no engines (such as electric vehicles and fuel cell vehicles): CO2 Target (g/mile) = 0.0362 x WF + 278
   (3) Calculate a production-weighted average of the target values and round it to the nearest whole g/mile.  This is your fleet-average standard.  All vehicles subject to the standards of this section form a single averaging set.  Use the following equation to calculate your fleet-average standard from the target value for each vehicle subconfiguration (Targeti) and U.S.-directed production volume of each vehicle subconfiguration  for the given model year (Volumei):
                                         
   (4) You may group subconfigurations within a configuration together for purposes of calculating your fleet-average standard as follows:
      (i) You may group together subconfigurations that have the same equivalent test weight (ETW), GVWR, and GCWR.  Calculate your work factor and target value assuming a curb weight equal to two times ETW minus GVWR. 
      (ii) You may group together other subconfigurations if you use the lowest target value calculated for any of the subconfigurations.
   (5) The Phase 2 emission standards described in this section are voluntary for emergency vehicles; however, if you certify emergency vehicles to the standards of this section, those standards apply as if they were mandatory.  You must notify us in writing if you use the provisions of this paragraph (a)(5) to produce exempted emergency vehicles in a given model year, either in the report specified in §86.1865 or in a separate submission. 
   (6) The standards specified in this section apply for testing at both low-altitude conditions and high-altitude conditions.  However, manufacturers must submit an engineering evaluation indicating that common calibration approaches are utilized at high altitude instead of performing testing for certification, consistent with §86.1829. Any deviation from low altitude emission control practices must be included in the auxiliary emission control device (AECD) descriptions submitted at certification. Any AECD specific to high altitude requires engineering emission data for EPA evaluation to quantify any emission impact and determine the validity of the AECD.
(b) Production and in-use CO2 standards.  Each vehicle you produce that is subject to the standards of this section has an "in-use" CO2 standard that is calculated from your test result and that applies for selective enforcement audits and in-use testing.  This in-use CO2 standard for each vehicle is equal to the applicable deteriorated emission level multiplied by 1.10 and rounded to the nearest whole g/mile.
(c) N2O and CH4 standards.  Except as allowed under this paragraph (c), all vehicles subject to the standards of this section must comply with an N2O standard of 0.05 g/mile and a CH4 standard of 0.05 g/mile when calculated according to the provisions of paragraph (d)(4) of this section. You may specify CH4 and/or N2O alternative standards using CO2 emission credits instead of these otherwise applicable emission standards for one or more test groups.  To do this, calculate the CH4 and/or N2O emission credits needed (negative credits) using the equation in this paragraph (c) based on the FEL(s) you specify for your vehicles during certification.  You must adjust the calculated emissions by the global warming potential (GWP): GWP equals 25 for CH4 and 298 for N2O.  This means you must use 25 Mg of positive CO2 credits to offset 1 Mg of negative CH4 credits and 298 Mg of positive CO2 credits to offset 1 Mg of negative N2O credits.  Note that § 86.1818-12(f) does not apply for vehicles subject to the standards of this section.  Calculate credits using the following equation:
CO2 Credits Needed (Mg) = [(FEL - Std) x (U.S.-directed production volume) x (Useful Life)] x (GWP) / 1,000,000 
(d) Compliance provisions. The following compliance provisions apply instead of other provisions described in this subpart S:
   (1) The CO2 standards of this section apply with respect to CO2 emissions, not with respect to carbon-related exhaust emissions (CREE).
    (2) The following general credit provisions apply: 
       (i) Credits you generate under this section may be used only to offset credit deficits under this section. You may bank credits for use in a future model year in which your average CO2 level exceeds the standard. You may trade credits to another manufacturer according to § 86.1865 - 12(k)(8). Before you bank or trade credits, you must apply any available credits to offset a deficit if the deadline to offset that credit deficit has not yet passed. 
       (ii) Vehicles subject to the standards of this section are included in a single greenhouse gas averaging set separate from any averaging set otherwise included in this subpart S. 
       (iii) Banked CO2 credits keep their full value for five model years after the year in which they were generated. Unused credits may not be used for more than five model years after the model year in which the credits are generated. 
   (3) Special credit and incentive provisions related to air conditioning in §§ 86.1867 and 86.1868  do not apply for vehicles subject to the standards of this section.
   (4) Measure emissions using the procedures of subpart B of this part and 40 CFR part 1066. Determine separate emission results for the Federal Test Procedure (FTP) described in 40 CFR 1066.801(c)(1) and the Highway Fuel Economy Test (HFET) described in 40 CFR 1066.801(c)(3).  Calculate composite emission results from these two test cycles for demonstrating compliance with the CO2, N2O, and CH4 standards based on a weighted average of the FTP (55%) and HFET (45%) emission results.  Note that this differs from the way the criteria pollutant standards apply.
   (5) Apply an additive deterioration factor of zero to measured CO2 emissions unless good engineering judgment indicates that emissions are likely to deteriorate in use. Use good engineering judgment to develop separate deterioration factors for N2O and CH4.
   (6) Credits are calculated using the useful life value (in miles) in place of "vehicle lifetime miles" as specified in §86.1865.  Calculate a total credit or debit balance in a model year by adding credits and debits from § 86.1865-12(k)(4), subtracting any CO2-equivalent debits for N2O or CH4 calculated according to paragraph (c) of this section, and adding any of the following credits:
      (i) Advanced technology credits according to paragraph (k)(7) of this section.
      (ii) Off-cycle technology credits according to paragraph (d)(13) of this section.
      (iii) Early credits from vehicles certified under paragraph (j)(1) of this section.
   (7) [Reserved] 
   (8) The provisions of § 86.1818 do not apply.
    (9) Calculate your fleet-average emission rate consistent with good engineering judgment and the provisions of §86.1865. The following additional provisions apply: 
       (i) Unless we approve a lower number, you must test at least ten subconfigurations. If you produce more than 100 subconfigurations in a given model year, you must test at least ten percent of your subconfigurations. For purposes of this paragraph (d)(9)(i), count carryover tests, but do not include analytically derived CO2 emission rates, data substitutions, or other untested allowances. We may approve a lower number of tests for manufacturers that have limited product offerings, or low sales volumes. Note that good engineering judgment and other provisions of this part may require you to test more subconfigurations than these minimum values.
       (ii) The provisions of paragraph (g) of this section specify how you may use analytically derived CO2 emission rates. 
       (iii) At least 90 percent of final production volume at the configuration level must be represented by test data (real, data substituted, or analytical).
       (iv) Perform fleet-average CO2 calculations as described in §86.1865 and 40 CFR part 600, with the following exceptions: 
          (A) Use CO2 emissions values for all test results, intermediate calculations, and fleet average calculations instead of the carbon-related exhaust emission (CREE) values specified in this subpart S and 40 CFR part 600. 
          (B) Perform intermediate CO2 calculations for subconfigurations within each configuration using the subconfiguration and configuration definitions in paragraph (d)(12) of this section. 
          (C) Perform intermediate CO2 calculations for configurations within each test group and transmission type (instead of configurations within each base level and base levels within each model type). Use the configuration definition in paragraph (d)(12)(i) of this section. 
          (D) Do not perform intermediate CO2 calculations for each base level or for each model type. Base level and model type CO2 calculations are not applicable to heavy-duty vehicles subject to standards in this section. 
          (E) Determine fleet average CO2 emissions for heavy-duty vehicles subject to standards in this section as described in 40 CFR 600.510 - 12(j), except that the calculations must be performed on the basis of test group and transmission type (instead of the model-type basis specified in the light-duty vehicle regulations), and the calculations for dual fuel, multi-fuel, and flexible fuel vehicles must be consistent with the provisions of paragraph (d)(10)(i) of this section. 
   (10) For dual-fuel, multi-fuel, and flexible-fuel vehicles, perform exhaust testing on each fuel type (for example, gasoline and E85). 
      (i) For your fleet-average calculations, use either the conventional-fueled CO2 emission rate or a weighted average of your emission results as specified in 40 CFR 600.510 - 12(k) for light-duty trucks.  
      (ii) If you certify to an alternate standard for N2O or CH4 emissions, you may not exceed the alternate standard when tested on either fuel.
   (11) Test your vehicles with an equivalent test weight based on its Adjusted Loaded Vehicle Weight (ALVW).  Determine equivalent test weight from the ALVW as specified in 40 CFR 1066.805; round ALVW values above 14,000 pounds to the nearest 500 pound increment.
   (12) The following definitions apply for the purposes of this section:
      (i) Configuration means a subclassification within a test group based on engine code, transmission type and gear ratios, final drive ratio, and other parameters we designate.  Engine code means the combination of both "engine code" and "basic engine" as defined in 40 CFR 600.002. 
      (ii) Subconfiguration means a unique combination within a vehicle configuration (as defined in this paragraph (d)(12)) of equivalent test weight, road-load horsepower, and any other operational characteristics or parameters that we determine may significantly affect CO2 emissions within a vehicle configuration. Note that for vehicles subject to standards of this section, equivalent test weight (ETW) is based on the ALVW of the vehicle as outlined in paragraph (d)(11) of this section.
      (iii) The terms "complete vehicle" and "incomplete vehicle" have the meanings given for "complete heavy-duty vehicle" and "incomplete heavy-duty vehicle", respectively, in 40 CFR 86.1803.
   (13) This paragraph (d)(13) applies for CO2 reductions resulting from technologies that were not in common use before 2010 that are not reflected in the specified test procedures. These may be described as off-cycle or innovative technologies.  We may allow you to generate emission credits consistent with the provisions of § 86.1869-12(c) and (d). You do not need to provide justification for not using the 5-cycle methodology.
   (14) You must submit pre-model year reports before you submit your applications for certification for a given model year.  Unless we specify otherwise, include the information specified for pre-model year reports in 49 CFR 535.8.
    (15) You must submit a final report within 90 days after the end of the model year. Unless we specify otherwise, include applicable information identified in §86.1865 - 12(l), 40 CFR 600.512, and 49 CFR 535.8(e). The final report must include at least the following information: 
       (i) Model year. 
       (ii) Applicable fleet-average CO2 standard. 
       (iii) Calculated fleet-average CO2 value and all the values required to calculate the CO2 value. 
       (iv) Number of credits or debits incurred and all values required to calculate those values. 
       (v) Resulting balance of credits or debits. 
       (vi) N2O emissions. 
       (vii) CH4 emissions. 
       (viii) Total and percent leakage rates under paragraph (h) of this section.
(e) Useful life.  Your vehicles must meet the exhaust emission standards of this section for the full useful life, as described in §86.1805.  
 (g) Analytically derived CO2 emission rates (ADCs). This paragraph (g) describes an allowance to use estimated (i.e., analytically derived) CO2 emission rates based on baseline test data instead of measured emission rates for calculating fleet-average emissions. Note that these ADCs are similar to ADFEs used for light-duty vehicles. Note also that F terms used in this paragraph (g) represent coefficients from the following road load equation: 
   Force = F0 + F1 ∙ (velocity) + F2 ∙ (velocity)[2]
    (1) Except as specified in paragraph (g)(2) of this section, use the following equation to calculate the ADC of a new vehicle from road load force coefficients (F0, F1, F2), axle ratio, and test weight: 
    ADC=CO2base+2.18∙∆F0+37.4∙∆F1+2257∙∆F2+189∙∆AR+0.0222∙∆ETW
       Where: 
       ADC = Analytically derived combined city/ highway CO2 emission rate (g/mile) for a new vehicle. 
       CO2base = Combined city/highway CO2 emission rate (g/mile) of a baseline vehicle. 
       ΔF0 = F0 of the new vehicle - F0 of the baseline vehicle. 
       ΔF1 = F1 of the new vehicle - F1 of the baseline vehicle. 
       ΔF2 = F2 of the new vehicle - F2 of the baseline vehicle. 
       ΔAR = Axle ratio of the new vehicle - axle ratio of the baseline vehicle. 
       ΔETW = ETW of the new vehicle - ETW of the baseline vehicle. 
    (2) The purpose of this section is to accurately estimate CO2 emission rates. 
       (i) You must apply the provisions of  this section consistent with good engineering judgment. For example, do not use the equation in paragraph (g)(1) of this section where good engineering judgment indicates that it will not accurately estimate emissions. You may ask us to approve alternate equations that allow you to estimate emissions more accurately. 
       (ii) The analytically derived CO2 equation in paragraph (g)(1) of this section may be periodically updated through publication of an EPA guidance document to more accurately characterize CO2 emission levels for example, changes may be appropriate based on new test data, future technology changes, or to changes in future CO2 emission levels. Any EPA guidance document will determine the model year that the updated equation takes effect. We will issue guidance no later than eight months before the effective model year. For example, model year 2014 may start January 2, 2013, so guidance for model year 2014 would be issued by May 1, 2012. 
    (3) You may select baseline test data without our advance approval if they meet all the following criteria: 
       (i) Vehicles considered for the baseline test must comply with all applicable emission standards in the model year associated with the ADC. 
       (ii) You must include in the pool of tests considered for baseline selection all official tests of the same or equivalent basic engine, transmission class, engine code, transmission code, engine horsepower, dynamometer drive wheels, and compression ratio as the ADC subconfiguration. Do not include tests in which emissions exceed any applicable standard. 
       (iii) Where necessary to minimize the CO2 adjustment, you may supplement the pool with tests associated with worst-case engine or transmission codes and carryover or carry-across engine families. If you do, all the data that qualify for inclusion using the elected worst-case substitution (or carryover or carry-across) must be included in the pool as supplemental data (i.e., individual test vehicles may not be selected for inclusion). You must also include the supplemental data in all subsequent pools, where applicable. 
       (iv) Tests previously used during the subject model year as baseline tests in ten other ADC subconfigurations must be eliminated from the pool. 
       (v) Select the tested subconfiguration with the smallest absolute difference between the ADC and the test CO2 emission rate for combined emissions. Use this as the baseline test for the target ADC subconfiguration. 
    (4) You may ask us to allow you to use baseline test data not fully meeting the provisions of paragraph (g)(3) of this section. 
    (5) Calculate the ADC rounded to the nearest whole g/mile. Except with our advance approval, the downward adjustment of ADC from the baseline is limited to ADC values 20 percent below the baseline emission rate. The upward adjustment is not limited. 
    (6) You may not submit an ADC if an actual test has been run on the target subconfiguration during the certification process or on a development vehicle that is eligible to be declared as an emission-data vehicle. 
    (7) No more than 40 percent of the subconfigurations tested in your final CO2 submission may be represented by ADCs.
    (8) Keep the following records for at least five years, and show them to us if we ask to see them: 
       (i) The pool of tests. 
       (ii) The vehicle description and tests chosen as the baseline and the basis for the selection. 
       (iii) The target ADC subconfiguration. 
       (iv) The calculated emission rates. 
    (9) We may perform or order a confirmatory test of any subconfiguration covered by an ADC. 
    (10) Where we determine that you did not fully comply with the provisions of this paragraph (g), we may require that you comply based on actual test data and that you recalculate your fleet- average emission rate. 
(h) Air conditioning leakage. Loss of refrigerant from your air conditioning systems may not exceed a total leakage rate of 11.0 grams per year or a percent leakage rate of 1.50 percent per year, whichever is greater.  Calculate the total leakage rate in g/year as specified in § 86.1867-12(a). Calculate the percent leakage rate as: [total leakage rate (g/yr)] / [total refrigerant capacity (g)] x 100. Round your percent leakage rate to the nearest one-hundredth of a percent.  
   (1) For purpose of this requirement, "refrigerant capacity" is the total mass of refrigerant recommended by the vehicle manufacturer as representing a full charge.  Where full charge is specified as a pressure, use good engineering judgment to convert the pressure and system volume to a mass.(2) If your system uses a refrigerant other than HFC-134a that is listed as an acceptable substitute refrigerant for heavy-duty vehicles under 40 CFR part 82, subpart G, and the substitute refrigerant is identified in §86.1867-12(e), your system is deemed to meet the leakage standard in this paragraph (h) and the reporting requirement of §86.1844-01(d)(7))(iv) does not apply.  If your system uses any other refrigerant that is listed as an acceptable substitute refrigerant for heavy-duty vehicles under 40 CFR part 82, subpart G, contact us for procedures for calculating the leakage rate in a way that appropriately accounts for the refrigerant's properties.
 (i) [Reserved]
(j) Optional GHG certification under this subpart.  You may certify certain complete or cab-complete vehicles to the GHG standards of this section.  All vehicles optionally certified under this paragraph (j) are deemed to be subject to the GHG standards of this section.  Note that for vehicles above 14,000 pounds GVWR and at or below 26,000 pounds GVWR, GHG certification under this paragraph (j) does not affect how you may or may not certify with respect to criteria pollutants.  For example, certifying a Class 4 vehicle to GHG standards under this paragraph (j) does not allow you to chassis-certify these vehicles with respect to criteria pollutants.
   (1) For GHG compliance, you may certify any complete or cab-complete spark-ignition vehicles above 14,000 pounds GVWR and at or below 26,000 pounds GVWR to the GHG standards of this section even though this section otherwise specifies that you may certify vehicles to the GHG standards of this section only if they are chassis-certified for criteria pollutants. 
    (2) You may apply the provisions of this section to cab-complete vehicles based on a complete sister vehicle.  In unusual circumstances, you may ask us to apply these provisions to Class 2b or Class 3 incomplete vehicles that do not meet the definition of cab-complete. 
      (i) Except as specified in paragraph (j)(3) of this section, for purposes of this section, a complete sister vehicle is a complete vehicle of the same vehicle configuration as the cab-complete vehicle.  You may not apply the provisions of this paragraph (j) to any vehicle configuration that has a four-wheel rear axle if the complete sister vehicle has a two-wheel rear axle.  
      (ii) Calculate the target value for fleet-average CO2 emissions under paragraph (a) of this sectionbased on the work factor value that applies for the complete sister vehicle. 
      (iii) Test these cab-complete vehicles using the same equivalent test weight and other dynamometer settings that apply for the complete vehicle from which you used the work factor value (the sister vehicle).  For GHG certification, you may submit the test data from that complete sister vehicle instead of performing the test on the cab-complete vehicle.  
      (iv) You are not required to produce the complete sister vehicle for sale to use the provisions of this paragraph (j)(2).  This means the complete sister vehicle may be a carryover vehicle from a prior model year or a vehicle created solely for the purpose of testing.
   (3) For GHG purposes, if a cab-complete vehicle is not of the same vehicle configuration as a complete sister vehicle due only to certain factors unrelated to coastdown performance, you may use the road-load coefficients from the complete sister vehicle for certification testing of the cab-complete vehicle, but you may not use emission data from the complete sister vehicle for certifying the cab-complete vehicle. 
(k) Interim provisions. The following provisions apply instead of other provisions in this subpart:
   (1) Incentives for early introduction.  Manufacturers may voluntarily certify in model year 2013 (or earlier model years for electric vehicles) to the greenhouse gas standards that apply starting in model year 2014 as specified in 40 CFR 1037.150(a).  
   (2) To generate early credits under this paragraph (k)(2) for any vehicles other than electric vehicles, you must certify your entire U.S.-directed fleet to these standards. If you calculate a separate fleet average for advanced-technology vehicles under paragraph (c)(7) of this section, you must certify your entire U.S.-directed production volume of both advanced and conventional vehicles within the fleet. Except as specified in paragraph (a)(4) of this section, if some test groups are certified after the start of the model year, you may generate credits only for production that occurs after all test groups are certified. For example, if you produce three test groups in an averaging set and you receive your certificates for those test groups on January 4, 2013, March 15, 2013, and April 24, 2013, you may not generate credits for model year 2013 for vehicles from any of the test groups produced before April 24, 2013. Calculate credits relative to the standard that would apply in model year 2014 using the applicable equations in this subpart and your model year 2013 U.S.-directed production volumes. These credits may be used to show compliance with the standards of this subpart for 2014 and later model years. We recommend that you notify us of your intent to use this provision before submitting your applications.
   (3) Compliance date.  Compliance with the standards of this section is optional before January 1, 2014 as specified in 40 CFR 1037.150(g).  
   (4) Phase-in provisions.  Each manufacturer must choose one of the options specified in paragraphs (k)(4)(i) and (ii) of this section for phasing in the Phase 1 standards.   Manufacturers must follow the schedule described in paragraph (k)(4)(iii) of this section for phasing in the Phase 2 standards.
      (i) Phase 1  -- Option 1. To implement the phase-in of Phase 1 standards under this paragraph (k)(4)(i), apply the CO2 target values specified in the following table for model year 2014 through 2020 vehicles: 
                           Table 1 of § 86.1819-14
                          Model Year and Engine Cycle
                         Alternate CO2 Target (g/mile)
2014 Spark-Ignition
                             0.0482 x (WF) + 371
2015  Spark-Ignition
                             0.0479 x (WF) + 369
2016 Spark-Ignition
                             0.0469 x (WF) + 362
2017 Spark-Ignition
                             0.0460 x (WF) + 354
2018-2020 Spark-Ignition
                             0.0440 x (WF) + 339
2014 Compression-Ignition
                             0.0478 x (WF) + 368
2015 Compression-Ignition
                             0.0474 x (WF) + 366
2016 Compression-Ignition
                             0.0460 x (WF) + 354
2017 Compression-Ignition
                             0.0445 x (WF) + 343
2018-2020 Compression-Ignition
                             0.0416 x (WF) + 320
    
      (ii) Phase 1  -- Option 2. To implement the phase-in of the Phase 1 standards under this paragraph (k)(4)(ii), apply the CO2 target values specified in the following table for model year 2014 through 2020 vehicles: 
                           Table 2 of § 86.1819-14
Model Year and Engine Cycle
                         Alternate CO2 Target (g/mile)
2014 Spark-Ignition
                             0.0482 x (WF) + 371
2015  Spark-Ignition
                             0.0479 x (WF) + 369
2016-2018 Spark-Ignition
                             0.0456 x (WF) + 352
2019-2020 Spark-Ignition
                             0.0440 x (WF) + 339
2014 Compression-Ignition
                             0.0478 x (WF) + 368
2015 Compression-Ignition
                             0.0474 x (WF) + 366
2016-2018 Compression-Ignition
                             0.0440 x (WF) + 339
2019-2020 Compression-Ignition
                             0.0416 x (WF) + 320
   
      (iii) Phase 2. To implement the phase-in of the Phase 2 standards under this paragraph (k)(4)(iii), the standards in this section apply as specified for model year 2025, with compliance for vehicles in model years 2021 through 2024 based on the CO2 target values specified in the following table: 
                           Table 2 of § 86.1819-14
Model Year and Engine Cycle
                         Alternate CO2 Target (g/mile)
2021 Spark-Ignition
                             0.0429 x (WF) + 331
2022  Spark-Ignition
                             0.0418 x (WF) + 322
2023 Spark-Ignition
                             0.0408 x (WF) + 314
2024 Spark-Ignition
                             0.0398 x (WF) + 306
2025 Spark-Ignition
                             0.0388 x (WF) + 299
2026 Spark-Ignition
                             0.0378 x (WF) + 291
2021 Compression-Ignition
                             0.0406 x (WF) + 312
2022 Compression-Ignition
                             0.0395 x (WF) + 304
2023 Compression-Ignition
                             0.0386 x (WF) + 297
2024 Compression-Ignition
                             0.0376 x (WF) + 289
2025 Compression-Ignition
                             0.0367 x (WF) + 282
2026 Compression-Ignition
                             0.0357 x (WF) + 275

(5) Provisions for small manufacturers.  Standards apply on a delayed schedule for manufacturers meeting the small business criteria specified in 13 CFR 121.201.  Apply the small business criteria for NAICS code 336111 for vehicle manufacturers and 811198 for companies performing fuel conversions with vehicles manufactured by a different company.  Qualifying manufacturers are not subject to the greenhouse gas standards of this section for vehicles built before January 1, 2019, as specified in 40 CFR 1037.150(c).  For manufacturers owned by a parent company, the employee and revenue limits apply to the total number employees and total revenue of the parent company and all its subsidiaries.  In addition, manufacturers producing vehicles that run on any fuel other than gasoline, E85, or diesel fuel may delay complying with every new standard under this part by one model year.  
(6) Alternate N2O standards.  Manufacturers may show compliance with the N2O standards using an engineering analysis.  This allowance also applies for model year 2015 and later test groups or emission families carried over from model 2014 consistent with the provisions of §86.1839.  You may not certify to an N2O FEL different than the standard without measuring N2O emissions. 
(7) Credits generated from hybrid vehicles with regenerative braking or from vehicles with other advanced technologies may be used to show compliance with any standards of this part or 40 CFR part 1036, subject to the service class restrictions in 40 CFR 1037.740.  You may multiply these credits by 1.50.  Include these vehicles in a separate fleet-average calculation (and exclude them from your conventional fleet-average calculation).  You must first apply these advanced technology vehicle credits to any deficits for other vehicles in the averaging set before applying them to other averaging sets. Credits you generate under this paragraph (k)(7) may be used to demonstrate compliance with the CO2 emission standards in 40 CFR part 1036 and part 1037.  Similarly, you may use advanced-technology credits generated under 40 CFR 1036.615 or 1037.615 to demonstrate compliance with the CO2 standards in this section.  You may generate advanced technology credits under this paragraph (k)(7) only with Phase 1 vehicles.  
(8)  Loose engine sales.  This paragraph (k)(8) applies for model year 2020 and earlier spark-ignition engines identical to engines used in vehicles certified to the standards of this section, where you sell such engines as loose engines or as engines installed in incomplete vehicles that are not cab-complete vehicles.  For purposes of this paragraph (k)(8), engines would not be considered to be identical if they used different engine hardware.  You may include such engines in a test group certified to the standards of this section, subject to the following provisions:
   (i) Engines certified under this paragraph (k)(8) are deemed to be certified to the standards of 40 CFR 1036.108 as specified in 40 CFR 1036.108(a)(4).
   (ii) The U.S.-directed production volume of engines you sell as loose engines or installed in incomplete heavy-duty vehicles that are not cab-complete vehicles in any given model year may not exceed ten percent of the total U.S-directed production volume of engines of that design that you produce for heavy-duty applications for that model year, including engines you produce for complete vehicles, cab-complete vehicles, and other incomplete vehicles.  The total number of engines you may certify under this paragraph (k)(8), of all engine designs, may not exceed 15,000 in any model year.  Engines produced in excess of either of these limits are not covered by your certificate.  For example, if you produce 80,000 complete model year 2017 Class 2b pickup trucks with a certain engine and 10,000 incomplete model year 2017 Class 3 vehicles with that same engine, and you do not apply the provisions of this paragraph (k)(8) to any other engine designs, you may produce up to 10,000 engines of that design for sale as loose engines under this paragraph (k)(8).  If you produced 11,000 engines of that design for sale as loose engines, the last 1,000 of them that you produced in that model year 2017 would be considered uncertified. 
   (iii) This paragraph (k)(8) does not apply for engines certified to the standards of 40 CFR 1036.108(a)(1).
   (iv) Label the engines as specified in 40 CFR 1036.135 including the following compliance statement: "THIS ENGINE WAS CERTIFIED TO THE ALTERNATE GREENHOUSE GAS EMISSION STANDARDS OF 40 CFR 1036.108(a)(4)."  List the test group name instead of an engine family name.
   (v) Vehicles using engines certified under this paragraph (k)(8) are subject to the emission standards of 40 CFR 1037.105.
   (vi) For certification purposes, your engines are deemed to have a CO2 target value and test result equal to the CO2 target value and test result for the complete vehicle in the applicable test group with the highest equivalent test weight, except as specified in paragraph (k)(8)(vi)(B) of this section.  Use these values to calculate your target value, fleet-average emission rate, and in-use emission standard.  Where there are multiple complete vehicles with the same highest equivalent test weight, select the CO2 target value and test result as follows:
      (A)  If one or more of the CO2 test results exceed the applicable target value, use the CO2 target value and test result of the vehicle that exceeds its target value by the greatest amount.
      (B)  If none of the CO2 test results exceed the applicable target value, select the highest target value and set the test result equal to it.  This means that you may not generate emission credits from vehicles certified under this paragraph (k)(8).
   (vii) State in your applications for certification that your test group and engine family will include engines certified under this paragraph (k)(8).  This applies for your greenhouse gas vehicle test group and your criteria pollutant engine family.  List in each application the name of the corresponding test group/engine family.
(9) Credit adjustment for useful life.  For credits that you calculate based on a useful life of 120,000 miles, multiply any banked credits that you carry forward for use in model year 2021 and later by 1.25.
(10) For model year 2014 and earlier vehicles, you may round measured and calculated emission levels to the nearest 0.1 g/mile, instead of the nearest whole g/mile as specified in paragraphs (a), (b), and (g) of this section.

1. Section 86.1823-08 is amended by revising the definition of "R" in paragraph (d)(3) to read as follows:
§86.1823-08   Durability demonstration procedures for exhaust emissions.
*	*	*	*	*
(d)	*	*	*
(3)	*	*	*
R = Catalyst thermal reactivity coefficient. You may use a default value of 17,500 for the SBC.
*	*	*	*	*

2. Section 86.1838-01 is amended by revising paragraph (b)(1)(i)(B), adding paragraph (b)(1)(i)(C), and revising paragraph (d)(3)(iii) to read as follows:
§86.1838-01   Small-volume manufacturer certification procedures.
(b)	*	*	* 
(1) 	*	*	*
(i) 	*	*	*
(B) No small-volume sales threshold applies for the heavy-duty greenhouse gas standards; see §86.1819(k)(4).
(C) 15,000 units for all other requirements. See §86.1845 for separate provisions that apply for in-use testing.
*	*	*	*	*
(d) * * *
(3) * * *  
(iii) Notwithstanding the requirements of paragraph (d)(3)(ii) of this section, an applicant may satisfy the requirements of this paragraph (d)(3) if the requirements of this paragraph (d)(3) are completed by an auditor who is an employee of the applicant, provided that such employee:
* * * * *

3. Section 86.1844-01 is amended by adding paragraph (d)(7)(iv) to read as follows:
§86.1844-01   Information requirements: Application for certification and submittal of information upon request.
*	*	*	*	*
(d) 	*	*	*
(7)	*	*	*
(iv) For heavy-duty vehicles subject to air conditioning standards under §86.1819, include the refrigerant leakage rates (leak scores), describe the type of refrigerant, and identify the refrigerant capacity of the air conditioning systems.  If another company will install the air conditioning system, also identify the corporate name of the final installer.
*	*	*	*	*


4. Section 86.1845-04 is amended by revising paragraph (c)(5)(iv) to read as follows:
§ 86.1845-04   Manufacturer in-use verification testing requirements.
* * * * *
(c) * * *
(5) * * *
(iv) For non-gaseous fueled vehicles, one test vehicle of each evaporative/refueling family shall be tested in accordance with the supplemental 2-diurnal-plus-hot-soak evaporative emission procedures described in subpart B of this part, when such test vehicle is tested for compliance with applicable evaporative emission and refueling standards under this subpart. For gaseous fueled vehicles, one test vehicle of each evaporative/refueling family shall be tested in accordance with the 3-diurnal-plus-hot-soak evaporative emission procedures and refueling emission proceduresdescribed in subpart B of this part, when such test vehicle is tested for compliance with applicable evaporative emission and refueling standards under this subpart. The test vehicles tested to fulfill the evaporative/refueling testing requirement of this paragraph (b)(5)(ii) will be counted when determining compliance with the minimum number of vehicles as specified in Table S04-06 and table S04-07 in paragraph (b)(3) of this section for testing under paragraph (b)(5)(i) of this section only if the vehicle is also tested for exhaust emissions under the requirements of paragraph (b)(5)(i) of this section.
* * * * *

5. Section 86.1846-01 is amended by revising paragraph (b)(1)(i) to read as follows:
§86.1846-01   Manufacturer in-use confirmatory testing requirements.
*   *   *   *   *
(b) *  *  *
(1) *  *  *
(i) Additional testing is not required under this paragraph (b)(1) based on evaporative/refueling testing or based on low-mileage Supplemental FTP testing conducted under §86.1845-04(b)(5)(i). Testing conducted at high altitude under the requirements of §86.1845-04(c) will be included in determining if a test group meets the criteria triggering the testing required under this section.
*	*	*	*	*

6. Section 86.1848-10 is amended by revising paragraph (c)(9) to read as follows:
§86.1848-10   Compliance with emission standards for the purpose of certification.
*   *   *   *   *
(c)	*	*	*
(9) For 2012 and later model year LDVs, LDTs, and MDPVs, all certificates of conformity issued are conditional upon compliance with all provisions of §§86.1818 and 86.1865 both during and after model year production. Similarly, for 2014 and later model year HDV, and other HDV subject to standards under §86.1819, all certificates of conformity issued are conditional upon compliance with all provisions of §§86.1819 and 86.1865 both during and after model year production.  The manufacturer bears the burden of establishing to the satisfaction of the Administrator that the terms and conditions upon which the certificate(s) was (were) issued were satisfied. For recall and warranty purposes, vehicles not covered by a certificate of conformity will continue to be held to the standards stated or referenced in the certificate that otherwise would have applied to the vehicles.
   (i) Failure to meet the fleet average CO2 requirements will be considered a failure to satisfy the terms and conditions upon which the certificate(s) was (were) issued and the vehicles sold in violation of the fleet average CO2 standard will not be covered by the certificate(s). The vehicles sold in violation will be determined according to §86.1865-12(k)(8).
   (ii) Failure to comply fully with the prohibition against selling credits that are not generated or that are not available, as specified in §86.1865-12, will be considered a failure to satisfy the terms and conditions upon which the certificate(s) was (were) issued and the vehicles sold in violation of this prohibition will not be covered by the certificate(s).
   (iii) For manufacturers using the conditional exemption under §86.1801-12(k), failure to fully comply with the fleet production thresholds that determine eligibility for the exemption will be considered a failure to satisfy the terms and conditions upon which the certificate(s) was (were) issued and the vehicles sold in violation of the stated sales and/or production thresholds will not be covered by the certificate(s).
   (iv) For manufacturers that are determined to be operationally independent under §86.1838-01(d), failure to report a material change in their status within 60 days as required by §86.1838-01(d)(2) will be considered a failure to satisfy the terms and conditions upon which the certificate(s) was (were) issued and the vehicles sold in violation of the operationally independent criteria will not be covered by the certificate(s).
   (v) For manufacturers subject to an alternative fleet average greenhouse gas emission standard approved under §86.1818-12(g), failure to comply with the annual sales thresholds that are required to maintain use of those standards, including the thresholds required for new entrants into the U.S. market, will be considered a failure to satisfy the terms and conditions upon which the certificate(s) was (were) issued and the vehicles sold in violation of stated sales and/or production thresholds will not be covered by the certificate(s).
*	*	*	*	*

7.    Section 86.1853-01 is revised to read as follows:
§ 86.1853-01   Certification hearings.
If a manufacturer's request for a hearing is approved, EPA will follow the hearing procedures specified in 40 CFR part 1068, subpart G.

8.    Section 86.1854-12 is amended by adding paragraph (b)(5) to read as follows:
§ 86.1854-12   Prohibited acts.
*	*	*	*	*
(b)	*	*	*
(5) Certified motor vehicles and motor vehicle engines and their emission control devices must remain in their certified configuration even if they are used solely for competition or if they become nonroad vehicles or engines; anyone modifying a certified motor vehicle or motor vehicle engine for any reason is subject to the tampering and defeat device prohibitions of paragraph (a)(3) of this section and 42 U.S.C. 7522(a)(3).

9.    Section 86.1862-04 is amended by revising paragraph (c) to read as follows:
§ 86.1862-04   Maintenance of records and submittal of information relevant to compliance with fleet average NOx standards.
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(c) Notice of opportunity for hearing. Any voiding of the certificate under paragraph (a)(6) of this section will be made only after EPA has offered the manufacturer concerned an opportunity for a hearing conducted in accordance with 40 CFR part 1068, subpart G and, if a manufacturer requests such a hearing, will be made only after an initial decision by the Presiding Officer. 

10.    Section 86.1864-10 is amended by revising paragraph (p)(3) to read as follows:
§ 86.1864-10   How to comply with the fleet average cold temperature NMHC standards.
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(p)	*	*	*
(3) Notice of opportunity for hearing. Any revoking of the certificate under paragraph (p)(1)(vi) of this section will be made only after EPA has offered the affected manufacturer an opportunity for a hearing conducted in accordance with 40 CFR part 1068, subpart G and, if a manufacturer requests such a hearing, will be made only after an initial decision by the Presiding Officer.

11.    Section 86.1865-12 is revised to read as follows:
§86.1865-12   How to comply with the fleet average CO2 standards.
   (a) Applicability. (1) Unless otherwise exempted under the provisions of paragraph (d) of this section, CO2 fleet average exhaust emission standards of this subpart apply to:
      (i) 2012 and later model year passenger automobiles and light trucks.
      (ii) Heavy-duty vehicles subject to standards under § 86.1819.
      (iii) Vehicles imported by ICIs as defined in 40 CFR 85.1502.
   (2) The terms "passenger automobile" and "light truck" as used in this section have the meanings as defined in §86.1818-12.
(b) Useful life requirements. Full useful life requirements for CO2 standards are defined in §§86.1818 and 86.1819. There is not an intermediate useful life standard for CO2 emissions.
(c) Altitude.  Greenhouse gas emission standards apply for testing at both low-altitude conditions and at high-altitude conditions, as described in §§ 86.1818 and 86.1819. 
   (d) Small volume manufacturer certification procedures. (1) Passenger automobiles and light trucks. Certification procedures for small volume manufacturers are provided in §86.1838. Small businesses meeting certain criteria may be exempted from the greenhouse gas emission standards in §86.1818 according to the provisions of §86.1801-12(j) or (k).
   (2) Heavy-duty vehicles. HDV manufacturers that qualify as small businesses are not subject to the Phase 1 greenhouse gas standards of this subpart as specified in §86.1819-14(k)(5).
(e) CO2 fleet average exhaust emission standards. The fleet average standards referred to in this section are the corporate fleet average CO2 standards for passenger automobiles and light trucks set forth in §86.1818-12(c) and (e), and for HDV in § 86.1819. Each manufacturer must comply with the applicable CO2 fleet average standard on a production-weighted average basis, for each separate averaging set, at the end of each model year, using the procedure described in paragraph (j) of this section.  The fleet average CO2 standards applicable in a given model year are calculated separately for passenger automobiles and light trucks for each manufacturer and each model year according to the provisions in §86.1818.  Calculate the HDV fleet average CO2 standard in a given model year as described in §86.1819-14(a).
(f) In-use CO2 standards. In-use CO2 exhaust emission standards are provided in §86.1818-12(d) for passenger automobiles and light trucks and in §86.1819-14(b) for HDV.
(g) Durability procedures and method of determining deterioration factors (DFs). Deterioration factors for CO2 exhaust emission standards are provided in §86.1823-08(m) for passenger automobiles and light trucks and in §86.1819-14(d)(5) for HDV.  
   (h) Vehicle test procedures. (1) The test procedures for demonstrating compliance with CO2 exhaust emission standards are contained in 40 CFR part 600, subpart B, and 40 CFR part 1066.
   (2) Testing to determine compliance with CO2 exhaust emission standards  must be on a loaded vehicle weight (LVW) basis for passenger automobiles and light trucks, and on an adjusted loaded vehicle weight (ALVW) basis for HDV (other than MDPV).
   (3) Testing for the purpose of providing certification data is required only at low-altitude conditions. If hardware and software emission control strategies used during low-altitude condition testing are not used similarly across all altitudes for in-use operation, the manufacturer must include a statement in the application for certification, in accordance with §86.1844-01(d)(11), stating what the different strategies are and why they are used.
   (i) Calculating fleet average carbon-related exhaust emissions for passenger automobiles and light trucks. (1) Manufacturers must compute separate production-weighted fleet average carbon-related exhaust emissions at the end of the model year for passenger automobiles and light trucks, using actual production, where production means vehicles produced and delivered for sale, and certifying model types to standards as defined in §86.1818-12. The model type carbon-related exhaust emission results determined according to 40 CFR part 600, subpart F (in units of grams per mile rounded to the nearest whole number) become the certification standard for each model type.
   (2) Manufacturers must separately calculate production-weighted fleet average carbon-related exhaust emissions levels for the following averaging sets according to the provisions of 40 CFR part 600, subpart F:
      (i) Passenger automobiles subject to the fleet average CO2 standards specified in §86.1818-12(c)(2);
      (ii) Light trucks subject to the fleet average CO2 standards specified in §86.1818-12(c)(3);
      (iii) Passenger automobiles subject to the Temporary Leadtime Allowance Alternative Standards specified in §86.1818-12(e), if applicable; and
      (iv) Light trucks subject to the Temporary Leadtime Allowance Alternative Standards specified in §86.1818-12(e), if applicable.
   (j) Certification compliance and enforcement requirements for CO2 exhaust emission standards. (1) Compliance and enforcement requirements are provided in this section and §86.1848-10(c)(9).
   (2) The certificate issued for each test group requires all model types within that test group to meet the in-use emission standards to which each model type is certified.  The in-use standards for passenger automobiles and light duty trucks are described in §86.1818-12(d).  The in-use standards for HDV (other than MDPV) are described in §86.1819-14(b).
   (3) Each manufacturer must comply with the applicable CO2 fleet average standard on a production-weighted average basis, at the end of each model year.  Use the procedure described in paragraph (i) of this section for passenger automobiles and light trucks.  Use the procedure described in §86.1819(d)(9)(iv) for HDV (other than MDPV).  
   (4) Each manufacturer must comply on an annual basis with the fleet average standards as follows:
      (i) Manufacturers must report in their annual reports to the Agency that they met the relevant corporate average standard by showing that the applicable production-weighted average CO2 emission levels 
      are at or below the applicable fleet average standards; or
      (ii) If the production-weighted average is above the applicable fleet average standard, manufacturers must obtain and apply sufficient CO2 credits as authorized under paragraph (k)(8) of this section. A manufacturer must show that they have offset any exceedance of the corporate average standard via the use of credits. Manufacturers must also include their credit balances or deficits in their annual report to the Agency.
      (iii) If a manufacturer fails to meet the corporate average CO2 standard for four consecutive years, the vehicles causing the corporate average exceedance will be considered not covered by the certificate of conformity (see paragraph (k)(8) of this section). A manufacturer will be subject to penalties on an individual-vehicle basis for sale of vehicles not covered by a certificate.
      (iv) EPA will review each manufacturer's production to designate the vehicles that caused the exceedance of the corporate average standard. EPA will designate as nonconforming those vehicles in test groups with the highest certification emission values first, continuing until reaching a number of vehicles equal to the calculated number of noncomplying vehicles as determined in paragraph (k)(8) of this section. In a group where only a portion of vehicles would be deemed nonconforming, EPA will determine the actual nonconforming vehicles by counting backwards from the last vehicle produced in that test group. Manufacturers will be liable for penalties for each vehicle sold that is not covered by a certificate.
   (k) Requirements for the CO2 averaging, banking and trading (ABT) program. (1) A manufacturer whose CO2 fleet average emissions exceed the applicable standard must complete the calculation in paragraph (k)(4) of this section to determine the size of its CO2 deficit. A manufacturer whose CO2 fleet average emissions are less than the applicable standard may complete the calculation in paragraph (k)(4) of this section to generate CO2 credits. In either case, the number of credits or debits must be rounded to the nearest whole number.
   (2) There are no property rights associated with CO2 credits generated under this subpart. Credits are a limited authorization to emit the designated amount of emissions. Nothing in this part or any other provision of law should be construed to limit EPA's authority to terminate or limit this authorization through a rulemaking.
   (3) Each manufacturer must comply with the reporting and recordkeeping requirements of paragraph (l) of this section for CO2 credits, including early credits. The averaging, banking and trading program is enforceable through the certificate of conformity that allows the manufacturer to introduce any regulated vehicles into U.S. commerce.
   (4) Credits are earned on the last day of the model year. Manufacturers must calculate, for a given model year and separately for passenger automobiles, light trucks, and heavy-duty vehicles, the number of credits or debits it has generated according to the following equation rounded to the nearest megagram:
      CO2 Credits or Debits (Mg) = [(CO2 Standard − Manufacturer's Production-Weighted Fleet Average CO2 Emissions) x (Total Number of Vehicles Produced) x (Mileage)] / 1,000,000
      Where:
      CO2 Standard = the applicable standard for the model year as determined by §86.1818 or §86.1819;
      Manufacturer's Production-Weighted Fleet Average CO2 Emissions = average calculated according to paragraph (i) of this section;
      Total Number of Vehicles Produced = The number of vehicles domestically produced plus those imported as defined in §600.511-08 of this chapter; and
      Mileage = useful life value (in miles) for HDV, and vehicle lifetime miles of 195,264 for passenger automobiles and 225,865 for light trucks.
   (5) Determine total HDV debits and credits for a model year as described in §86.1819-14(d)(6).  Determine total passenger car and light truck debits and credits for a model year as described in this paragraph (k)(5).  Total credits or debits generated in a model year, maintained and reported separately for passenger automobiles and light trucks, shall be the sum of the credits or debits calculated in paragraph (k)(4) of this section and any of the following credits, if applicable, minus any CO2-equivalent debits for N2O and/or CH4 calculated according to the provisions of §86.1818-12(f)(4):
      (i) Air conditioning leakage credits earned according to the provisions of §86.1867-12(b).
      (ii) Air conditioning efficiency credits earned according to the provisions of §86.1868-12(c).
      (iii) Off-cycle technology credits earned according to the provisions of §86.1869-12(d).
      (iv) Full size pickup truck credits earned according to the provisions of §86.1870-12(c).
      (v) N2O and/or CH4 CO2-equivalent debits accumulated according to the provisions of §86.1818-12(f)(4).
   (6) Unused CO2 credits generally retain their full value through five model years after the model year in which they were generated. Credits remaining at the end of the fifth model year after the model year in which they were generated may not be used to demonstrate compliance for later model years.  The following particular provisions apply for passenger cars and light trucks:
      (i) Unused CO2 credits from the 2009 model year shall retain their full value through the 2014 model year. Credits from the 2009 model year that remain at the end of the 2014 model year may not be used to demonstrate compliance for later model years.
      (ii) Unused CO2 credits from the 2010 through 2015 model years shall retain their full value through the 2021 model year. Credits remaining from these model years at the end of the 2021 model year may not be used to demonstrate compliance for later model years.
   (7) Credits may be used as follows:
      (i) Credits generated and calculated according to the method in paragraphs (k)(4) and (5) of this section may not be used to offset deficits other than those deficits accrued within the respective averaging set, except that credits may be transferred between the passenger automobile and light truck fleets of a given manufacturer.  Credits may be banked and used in a future model year in which a manufacturer's average CO2 level exceeds the applicable standard. Credits may also be traded to another manufacturer according to the provisions in paragraph (k)(8) of this section. Before trading or carrying over credits to the next model year, a manufacturer must apply available credits to offset any deficit, where the deadline to offset that credit deficit has not yet passed.  This paragraph (k)(7)(i) applies for MDPV, but not for other HDV.
      (ii) The use of credits shall not change Selective Enforcement Auditing or in-use testing failures from a failure to a non-failure. The enforcement of the averaging standard occurs through the vehicle's certificate of conformity as described in paragraph (k)(8) of this section. A manufacturer's certificate of conformity is conditioned upon compliance with the averaging provisions. The certificate will be void ab initio if a manufacturer fails to meet the corporate average standard and does not obtain appropriate credits to cover its shortfalls in that model year or subsequent model years (see deficit carry-forward provisions in paragraph (k)(8) of this section).
      (iii) Special provisions for manufacturers using the Temporary Leadtime Allowance Alternative Standards. The following provisions apply for passenger automobiles and light trucks: 
         (A) Credits generated by vehicles subject to the fleet average CO2 standards specified in §86.1818-12(c) may only be used to offset a deficit generated by vehicles subject to the Temporary Leadtime Allowance Alternative Standards specified in §86.1818-12(e).
         (B) Credits generated by a passenger automobile or light truck averaging set subject to the Temporary Leadtime Allowance Alternative Standards specified in §86.1818-12(e)(4)(i) or (ii) of this section may be used to offset a deficit generated by an averaging set subject to the Temporary Leadtime Allowance Alternative Standards through the 2015 model year, except that manufacturers qualifying under the provisions of §86.1818-12(e)(3) may use such credits to offset a deficit generated by an averaging set subject to the Temporary Leadtime Allowance Alternative Standards through the 2016 model year.
         (C) Credits generated by an averaging set subject to the Temporary Leadtime Allowance Alternative Standards specified in §86.1818-12(e)(4)(i) or (ii) of this section may not be used to offset a deficit generated by an averaging set subject to the fleet average CO2 standards specified in §86.1818-12(c)(2) or (3) or otherwise transferred to an averaging set subject to the fleet average CO2 standards specified in §86.1818-12(c)(2) or (3).
         (D) Credits generated by vehicles subject to the Temporary Leadtime Allowance Alternative Standards specified in §86.1818-12(e)(4)(i) or (ii) may be banked for use in a future model year (to offset a deficit generated by an averaging set subject to the Temporary Leadtime Allowance Alternative Standards). All such credits may not be used to demonstrate compliance for model year 2016 and later vehicles, except that manufacturers qualifying under the provisions of §86.1818-12(e)(3) may use such credits to offset a deficit generated by an averaging set subject to the Temporary Leadtime Allowance Alternative Standards through the 2016 model year.
         (E) A manufacturer with any vehicles subject to the Temporary Leadtime Allowance Alternative Standards specified in §86.1818-12(e)(4)(i) or (ii) of this section in a model year in which that manufacturer also generates credits with vehicles subject to the fleet average CO2 standards specified in §86.1818-12(c) may not trade or bank credits earned against the fleet average standards in §86.1818-12(c) for use in a future model year.
      (iv) Credits generated in the 2017 through 2020 model years under the provisions of §86.1818-12(e)(3)(ii) may not be traded or otherwise provided to another manufacturer.
      (v) Credits generated under any alternative fleet average standards approved under §86.1818-12(g) may not be traded or otherwise provided to another manufacturer.
   (8) The following provisions apply if a manufacturer calculates that it has negative credits (also called "debits" or a "credit deficit") for a given model year:
      (i) The manufacturer may carry the credit deficit forward into the next three model years. Such a carry-forward may only occur after the manufacturer exhausts any supply of banked credits. The deficit must be covered with an appropriate number of credits that the manufacturer generates or purchases by the end of the third model year. Any remaining deficit is subject to a voiding of the certificate ab initio, as described in this paragraph (k)(8). Manufacturers are not permitted to have a credit deficit for four consecutive years.
      (ii) If the credit deficit is not offset within the specified time period, the number of vehicles not meeting the fleet average CO2 standards (and therefore not covered by the certificate) must be calculated.
         (A) Determine the negative credits for the noncompliant vehicle category by multiplying the total megagram deficit by 1,000,000 and then dividing by the mileage specified in paragraph (k)(4) of this section.
         (B) Divide the result by the fleet average standard applicable to the model year in which the debits were first incurred and round to the nearest whole number to determine the number of vehicles not meeting the fleet average CO2 standards.
      (iii) EPA will determine the vehicles not covered by a certificate because the condition on the certificate was not satisfied by designating vehicles in those test groups with the highest carbon-related exhaust emission values first and continuing until reaching a number of vehicles equal to the calculated number of non-complying vehicles as determined in this paragraph (k)(8).  The same approach applies for HDV, except that EPA will make these designations by ranking test groups based on CO2 emission values.  If these calculations determines that only a portion of vehicles in a test group contribute to the debit situation, then EPA will designate actual vehicles in that test group as not covered by the certificate, starting with the last vehicle produced and counting backwards.
         (iv)(A) If a manufacturer ceases production of passenger automobiles, light trucks, or heavy-duty vehicles, the manufacturer continues to be responsible for offsetting any debits outstanding within the required time period. Any failure to offset the debits will be considered a violation of paragraph (k)(8)(i) of this section and may subject the manufacturer to an enforcement action for sale of vehicles not covered by a certificate, pursuant to paragraphs (k)(8)(ii) and (iii) of this section.
         (B) If a manufacturer is purchased by, merges with, or otherwise combines with another manufacturer, the controlling entity is responsible for offsetting any debits outstanding within the required time period. Any failure to offset the debits will be considered a violation of paragraph (k)(8)(i) of this section and may subject the manufacturer to an enforcement action for sale of vehicles not covered by a certificate, pursuant to paragraphs (k)(8)(ii) and (iii) of this section.
      (v) For purposes of calculating the statute of limitations, a violation of the requirements of paragraph (k)(8)(i) of this section, a failure to satisfy the conditions upon which a certificate(s) was issued and hence a sale of vehicles not covered by the certificate, all occur upon the expiration of the deadline for offsetting debits specified in paragraph (k)(8)(i) of this section.
   (9) The following provisions apply to CO2 credit trading:
      (i) EPA may reject CO2 credit trades if the involved manufacturers fail to submit the credit trade notification in the annual report.
      (ii) A manufacturer may not sell credits that are no longer valid for demonstrating compliance based on the model years of the subject vehicles, as specified in paragraph (k)(6) of this section.
      (iii) In the event of a negative credit balance resulting from a transaction, both the buyer and seller are liable for the credit shortfall. EPA may void ab initio the certificates of conformity of all test groups that generate or use credits in such a trade.
         (iv) (A) If a manufacturer trades a credit that it has not generated pursuant to paragraph (k) of this section or acquired from another party, the manufacturer will be considered to have generated a debit in the model year that the manufacturer traded the credit. The manufacturer must offset such debits by the deadline for the annual report for that same model year.
         (B) Failure to offset the debits within the required time period will be considered a failure to satisfy the conditions upon which the certificate(s) was issued and will be addressed pursuant to paragraph (k)(8) of this section.
      (v) A manufacturer may only trade credits that it has generated pursuant to paragraphs (k)(4) and (5) of this section or acquired from another party.
      (l) Maintenance of records and submittal of information relevant to compliance with fleet average CO2 standards -- (1) Maintenance of records. (i) Manufacturers producing any light-duty vehicles, light-duty trucks, medium-duty passenger vehicles, or other heavy-duty vehicles subject to the provisions in this subpart must establish, maintain, and retain all the following information in adequately organized records for each model year:
         (A) Model year.
         (B) Applicable fleet average CO2 standards for each averaging set as defined in paragraph (i) of this section.
         (C) The calculated fleet average CO2 value for each averaging set as defined in paragraph (i) of this section.
         (D) All values used in calculating the fleet average CO2 values.
      (ii) Manufacturers must establish, maintain, and retain all the following information in adequately organized records for each vehicle produced that is subject to the provisions in this subpart:
         (A) Model year.
         (B) Applicable fleet average CO2 standard.
         (C) EPA test group.
         (D) Assembly plant.
         (E) Vehicle identification number.
         (F) Carbon-related exhaust emission standard (automobile and light truck only), N2O emission standard, and CH4 emission standard to which the vehicle is certified.
         (G) In-use carbon-related exhaust emission standard for passenger automobiles and light truck, and in-use CO2 standard for HDV.
         (H) Information on the point of first sale, including the purchaser, city, and state.
      (iii) Manufacturers must retain all required records for a period of eight years from the due date for the annual report. Records may be stored in any format and on any media, as long as manufacturers can promptly send EPA organized written records in English if requested by the Administrator. Manufacturers must keep records readily available as EPA may review them at any time.
      (iv) The Administrator may require the manufacturer to retain additional records or submit information not specifically required by this section.
      (v) Pursuant to a request made by the Administrator, the manufacturer must submit to the Administrator the information that the manufacturer is required to retain.
      (vi) EPA may void ab initio a certificate of conformity for vehicles certified to emission standards as set forth or otherwise referenced in this subpart for which the manufacturer fails to retain the records required in this section or to provide such information to the Administrator upon request, or to submit the reports required in this section in the specified time period.
      (2) Reporting. (i) Each manufacturer must submit an annual report. The annual report must contain for each applicable CO2 standard, the calculated fleet average CO2 value, all values required to calculate the CO2 emissions value, the number of credits generated or debits incurred, all the values required to calculate the credits or debits, and the resulting balance of credits or debits. For each applicable alternative N2O and/or CH4 standard selected under the provisions of §86.1818-12(f)(3) for passenger automobiles and light trucks (or §86.1819-14(c) for HDV), the report must contain the CO2-equivalent debits for N2O and/or CH4 calculated according to §86.1818-12(f)(4) (or §86.1819-14(c) for HDV) for each test group and all values required to calculate the number of debits incurred.
      (ii) For each applicable fleet average CO2 standard, the annual report must also include documentation on all credit transactions the manufacturer has engaged in since those included in the last report. Information for each transaction must include all of the following:
         (A) Name of credit provider.
         (B) Name of credit recipient.
         (C) Date the trade occurred.
         (D) Quantity of credits traded in megagrams.
         (E) Model year in which the credits were earned.
      (iii) Manufacturers calculating air conditioning leakage and/or efficiency credits under paragraph §86.1871-12(b) shall include the following information for each model year and separately for passenger automobiles and light trucks and for each air conditioning system used to generate credits:
         (A) A description of the air conditioning system.
         (B) The leakage credit value and all the information required to determine this value.
         (C) The total credits earned for each averaging set, model year, and region, as applicable.
      (iv) Manufacturers calculating advanced technology vehicle credits under paragraph §86.1871-12(c) shall include the following information for each model year and separately for passenger automobiles and light trucks:
         (A) The number of each model type of eligible vehicle sold.
         (B) The cumulative model year production of eligible vehicles starting with the 2009 model year.
         (C) The carbon-related exhaust emission value by model type and model year.
      (v) Manufacturers calculating off-cycle technology credits under paragraph §86.1871-12(d) shall include, for each model year and separately for passenger automobiles and light trucks, all test results and data required for calculating such credits.
      (vi) Unless a manufacturer reports the data required by this section in the annual production report required under §86.1844-01(e) or the annual report required under §600.512-12 of this chapter, a manufacturer must submit an annual report for each model year after production ends for all affected vehicles produced by the manufacturer subject to the provisions of this subpart and no later than May 1 of the calendar year following the given model year. Annual reports must be submitted to: Director, Compliance Division, U.S. Environmental Protection Agency, 2000 Traverwood Dr., Ann Arbor, Michigan 48105.
      (vii) Failure by a manufacturer to submit the annual report in the specified time period for all vehicles subject to the provisions in this section is a violation of section 203(a)(1) of the Clean Air Act (42 U.S.C. 7522 (a)(1)) for each applicable vehicle produced by that manufacturer.
      (viii) If EPA or the manufacturer determines that a reporting error occurred on an annual report previously submitted to EPA, the manufacturer's credit or debit calculations will be recalculated. EPA may void erroneous credits, unless traded, and will adjust erroneous debits. In the case of traded erroneous credits, EPA must adjust the selling manufacturer's credit balance to reflect the sale of such credits and any resulting credit deficit.
   (3) Notice of opportunity for hearing. Any voiding of the certificate under paragraph (l)(1)(vi) of this section will be made only after EPA has offered the affected manufacturer an opportunity for a hearing conducted in accordance with 40 CFR part 1068, subpart Gand, if a manufacturer requests such a hearing, will be made only after an initial decision by the Presiding Officer.

12.    Section 86.1866-12 is amended by adding introductory text and revising paragraph (b) introductory text to read as follows:
§86.1866-12   CO2 credits for advanced technology vehicles.
This section describes how to apply CO2 credits for advanced technology passenger automobiles and light trucks.  This section does not apply for heavy-duty vehicles (except MDPVs).
*	*	*	*	*
(b) For electric vehicles, plug-in hybrid electric vehicles, fuel cell vehicles, dedicated natural gas vehicles, and dual-fuel natural gas vehicles as those terms are defined in §86.1803 - 01, that are certified and produced for U.S. sale in the 2017 through 2021 model years and that meet the additional specifications in this section, the manufacturer may use the production multipliers in this paragraph (b) when determining the manufacturer's fleet average carbon-related exhaust emissions under §600.510-12 of this chapter.  Full size pickup trucks eligible for and using a production multiplier are not eligible for the performance-based credits described in §86.1870-12(b).  
* * * * *   

13.    Section 86.1867-12 is amended by revising the introductory text to read as follows:
§86.1867-12   CO2 credits for reducing leakage of air conditioning refrigerant.
Manufacturers may generate credits applicable to the CO2 fleet average program described in §86.1865-12 by implementing specific air conditioning system technologies designed to reduce air conditioning refrigerant leakage over the useful life of their passenger automobiles and/or light trucks; only the provisions of paragraph (a) this section apply for heavy-duty vehicles (other than MDPVs). Credits shall be calculated according to this section for each air conditioning system that the manufacturer is using to generate CO2 credits. Manufacturers may also generate early air conditioning refrigerant leakage credits under this section for the 2009 through 2011 model years according to the provisions of §86.1871-12(b).
(a) The manufacturer shall calculate an annual rate of refrigerant leakage from an air conditioning system in grams per year according to the procedures specified in SAE J2727 (incorporated by reference in §86.1). In doing so, the refrigerant permeation rates for hoses shall be determined using the procedures specified in SAE J2064 (incorporated by reference in §86.1) The annual rate of refrigerant leakage from an air conditioning system shall be rounded to the nearest tenth of a gram per year. The procedures of SAE J2727 may be used to determine leakage rates for HFC-134a and HFO-1234yf; manufacturers should contact EPA regarding procedures for other refrigerants. The annual rate of refrigerant leakage from an air conditioning system shall be rounded to the nearest tenth of a gram per year.
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14.    Section 86.1868-12 is amended by revising the introductory text and paragraphs (e)(5), (f)(1), (g)(1), and (g)(3) introductory text to read as follows:
§86.1868-12   CO2 credits for improving the efficiency of air conditioning systems.
Manufacturers may generate credits applicable to the CO2 fleet average program described in §86.1865-12 by implementing specific air conditioning system technologies designed to reduce air conditioning-related CO2 emissions over the useful life of their passenger automobiles and/or light trucks.  The provisions of this section do not apply for heavy-duty vehicles (except MDPVs). Credits shall be calculated according to this section for each air conditioning system that the manufacturer is using to generate CO2 credits. Manufacturers may also generate early air conditioning efficiency credits under this section for the 2009 through 2011 model years according to the provisions of §86.1871-12(b). For model years 2012 and 2013 the manufacturer may determine air conditioning efficiency credits using the requirements in paragraphs (a) through (d) of this section. For model years 2014 through 2016 the eligibility requirements specified in either paragraph (e) or (f) of this section must be met before an air conditioning system is allowed to generate credits. For model years 2017 through 2019 the eligibility requirements specified in paragraph (f) of this section must be met before an air conditioning system is allowed to generate credits. For model years 2020 and later the eligibility requirements specified in paragraph (g) of this section must be met before an air conditioning system is allowed to generate credits.
*	*	*	*	*
(e) * * *
(5) Air conditioning systems with compressors that are solely powered by electricity shall submit Air Conditioning Idle Test Procedure data to be eligible to generate credits in the 2014 and later model years, but such systems are not required to meet a specific threshold to be eligible to generate such credits, as long as the engine remains off for a period of at least 2 cumulative minutes during the air conditioning on portion of the Idle Test Procedure in §86.165 - 12(d). 
(f) * * *  
(1) The manufacturer shall perform the AC17 test specified in §86.167-17 of this part on each air conditioning system design and vehicle platform combination (as those terms are defined in §86.1803-01) for which the manufacturer intends to accrue air conditioning efficiency credits. The manufacturer must test at least one unique air conditioning system within each vehicle platform in a model year, unless all unique air conditioning systems within a vehicle platform have been previously tested.  A unique air conditioning system design is a system with unique or substantially different component designs or types and/or system control strategies (e.g., fixed-displacement vs. variable displacement compressors, orifice tube vs. thermostatic expansion valve, single vs. dual evaporator, etc.). In the first year of such testing, the tested vehicle configuration shall be the highest production vehicle configuration within each platform. In subsequent model years the manufacturer must test other unique air conditioning systems within the vehicle platform, proceeding from the highest production untested system until all unique air conditioning systems within the platform have been tested, or until the vehicle platform experiences a major redesign. Whenever a new unique air conditioning system is tested, the highest production configuration using that system shall be the vehicle selected for testing.  Air conditioning system designs which have similar cooling capacity, component types, and control strategies, yet differ in terms of compressor pulley ratios or condenser or evaporator surface areas will not be considered to be unique system designs. The test results from one unique system design may represent all variants of that design. Manufacturers must use good engineering judgment to identify the unique air conditioning system designs which will require AC17 testing in subsequent model years. Results must be reported separately for all four phases (two phases with air conditioning off and two phases with air conditioning on) of the test to the Environmental Protection Agency, and the results of the calculations required in §86.167 paragraphs (m) and (n) must also be reported. In each subsequent model year additional air conditioning system designs, if such systems exist, within a vehicle platform that is generating air conditioning credits must be tested using the AC17 procedure.  When all unique air conditioning system designs within a platform have been tested, no additional testing is required within that platform, and credits may be carried over to subsequent model years until there is a significant change in the platform design, at which point a new sequence of testing must be initiated. No more than one vehicle from each credit-generating platform is required to be tested in each model year. 
* * * * *
 (g) * * *
(1) For each air conditioning system (as defined in §86.1803-01) selected by the manufacturer to generate air conditioning efficiency credits, the manufacturer shall perform the AC17 Air Conditioning Efficiency Test Procedure specified in §86.167-17 of this part, according to the requirements of this paragraph (g).  
* * * * *
(3) For the first model year for which an air conditioning system is expected to generate credits, the manufacturer must select for testing the projected highest-selling configuration within each combination of vehicle platform and air conditioning system (as those terms are defined in §86.1803-01).  The manufacturer must test at least one unique air conditioning system within each vehicle platform in a model year, unless all unique air conditioning systems within a vehicle platform have been previously tested.  A unique air conditioning system design is a system with unique or substantially different component designs or types and/or system control strategies (e.g., fixed-displacement vs. variable displacement compressors, orifice tube vs. thermostatic expansion valve, single vs. dual evaporator, etc.). In the first year of such testing, the tested vehicle configuration shall be the highest production vehicle configuration within each platform. In subsequent model years the manufacturer must test other unique air conditioning systems within the vehicle platform, proceeding from the highest production untested system until all unique air conditioning systems within the platform have been tested, or until the vehicle platform experiences a major redesign. Whenever a new unique air conditioning system is tested, the highest production configuration using that system shall be the vehicle selected for testing.  Credits may continue to be generated by the air conditioning system installed in a vehicle platform provided that:
* * * * *


15.    Section 86.1869-12 is amended by adding introductory text and revising paragraphs (b)(2) introductory text, (b)(4)(ii), and (f) to read as follows:
§86.1869-12   CO2 credits for off-cycle CO2-reducing technologies.
This section describes how manufacturers may generate credits for off-cycle CO2-reducing technologies.  The provisions of this section do not apply for heavy-duty vehicles (except MDPVs), except that §86.1819-14(d)(13) describes how to apply paragraphs (c) and (d) this section for those vehicles.
*	*	*	*	*
(b) * * *
(2) The maximum allowable decrease in the manufacturer's combined passenger automobile and light truck fleet average CO2 emissions attributable to use of the default credit values in paragraph (b)(1) of this section is 10 grams per mile.  If the total of the CO2 g/mi credit values from paragraph (b)(1) of this section does not exceed 10 g/mi for any passenger automobile or light truck in a manufacturer's fleet, then the total off-cycle credits may be calculated according to paragraph (f) of this section.  If the total of the CO2 g/mi credit values from paragraph (b)(1) of this section exceeds 10 g/mi for any passenger automobile or light truck in a manufacturer's fleet, then the gram per mile decrease for the combined passenger automobile and light truck fleet must be determined according to paragraph (b)(2)(i) of this section to determine whether the 10 g/mi limitation has been exceeded. 
* * * * *
(4) * * *
(ii) High efficiency exterior lighting means a lighting technology that, when installed on the vehicle, is expected to reduce the total electrical demand of the exterior lighting system when compared to conventional lighting systems.  To be eligible for this credit, the high efficiency lighting must be installed in one or more of the following lighting components: low beam, high beam, parking/position, front and rear turn signals, front and rear side markers, taillights, and/or license plate lighting.
* * * * *
(f) Calculation of total off-cycle credits. Total off-cycle credits in Megagrams of CO2 (rounded to the nearest whole number) shall be calculated separately for passenger automobiles and light trucks according to the following formula:
   Total Credits (Megagrams) = (Credit x Production x VLM) / 1,000,000
   Where:
   Credit = the credit value in grams per mile determined in paragraph (b), (c) or (d) of this section.
   Production = The total number of passenger automobiles or light trucks, whichever is applicable, produced with the off-cycle technology to which to the credit value determined in paragraph (b), (c), or (d) of this section applies.
   VLM = vehicle lifetime miles, which for passenger automobiles shall be 195,264 and for light trucks shall be 225,865.

16.    Section 86.1870-12 is amended by revising the introductory text and adding paragraph (a)(3) to read as follows:
§86.1870-12   CO2 credits for qualifying full-size pickup trucks.
Full-size pickup trucks may be eligible for additional credits based on the implementation of hybrid technologies or on exhaust emission performance, as described in this section. Credits may be generated under either paragraph (a) or (b) of this section for a qualifying pickup truck, but not both.  The provisions of this section do not apply for heavy-duty vehicles.
(a) * * *
(3) If you produce both mild and strong hybrid electric full size pickup trucks but do not qualify for credits under paragraph (a)(1) or (2) of this section, your hybrid electric full size pickup trucks may be eligible for a credit of 10 grams/mile. To receive this credit in a given model year, you must produce a quantity of hybrid electric full size pickup trucks such that the proportion of combined mild and strong full size hybrid electric pickup trucks produced in a model year, when compared to your total production of full size pickup trucks, is not less than the required minimum percentages specified in paragraph (a)(1) of this section.
*	*	*	*	*

17.    Section 86.1866-12 is amended by revising the introductory text and paragraphs (a) introductory text, (b)(1), and (d) to read as follows:
§86.1871-12   Optional early CO2 credit programs.
Manufacturers may optionally generate CO2 credits in the 2009 through 2011 model years for use in the 2012 and later model years subject to EPA approval and to the provisions of this section. The provisions of §86.1819-14(j)(1) apply instead of the provisions of this section for heavy-duty vehicles (other than MDPVs). Manufacturers may generate early fleet average credits, air conditioning leakage credits, air conditioning efficiency credits, early advanced technology credits, and early off-cycle technology credits. Manufacturers generating any credits under this section must submit an early credits report to the Administrator as required in this section. The terms "sales" and "sold" as used in this section shall mean vehicles produced for U.S. sale, where "U.S." means the states and territories of the United States. The expiration date of unused CO2 credits is based on the model year in which the credits are earned, as described in 86.1865-12(k)(6). 
(a) Early fleet average CO2 reduction credits. Manufacturers may optionally generate credits for reductions in their fleet average CO2 emissions achieved in the 2009 through 2011 model years. To generate early fleet average CO2 reduction credits, manufacturers must select one of the four pathways described in paragraphs (a)(1) through (4) of this section. The manufacturer may select only one pathway, and that pathway must remain in effect for the 2009 through 2011 model years. Fleet average credits (or debits) must be calculated and reported to EPA for each model year under each selected pathway. 
* * * * * 
(b) Early air conditioning leakage and efficiency credits. (1) Manufacturers may optionally generate air conditioning refrigerant leakage credits according to the provisions of §86.1867 and/or air conditioning efficiency credits according to the provisions of §86.1868 in model years 2009 through 2011. Credits must be tracked by model type and model year.
* * * * *
(d) Early off-cycle technology credits. Manufacturers may optionally generate credits for the implementation of certain CO2-reducing technologies according to the provisions of §86.1869 in model years 2009 through 2011. Credits must be tracked by model type and model year.
*	*	*	*	*

Subpart E -- Emission Regulations for 1978 and Later New Motorcycles, General Provisions

18. Section 86.410-2006 is amended by revising paragraph (e) introductory text to read as follows:
§86.410-2006   Emission standards for 2006 and later model year motorcycles.
*	*	*	*	*
(e) Manufacturers with fewer than 500 employees worldwide and producing fewer than 3,000 motorcycles per year for the United States are considered small-volume manufacturers for the purposes of this section. The following provisions apply for these small-volume manufacturers:
*	*	*	*	*

Subpart T -- Manufacturer-Run In-Use Testing Program for Heavy-Duty Diesel Engines

19. Section 86.1910 is amended by revising paragraphs (g), (h), and (i) to read as follows:
§86.1910  How must I prepare and test my in-use engines?
*	*	*	*	*
(g) Once an engine is set up for testing, test the engine for at least one shift-day. To complete a shift-day's worth of testing, start sampling at the beginning of a shift and continue sampling for the whole shift, subject to the calibration requirements of the portable emissions measurement systems. A shift-day is the period of a normal workday for an individual employee.  If the first shift-day of testing involves at least two hours of accumulated non-idle operation with at least one valid NTE event, you may conclude testing at the end of the first shift-day.  If the first shift-day of testing does not involve at least two hours of accumulated non-idle operation with at least one valid NTE event, you may conclude testing only after repeating measurements for a second shift-day.  You may also continue testing longer than we require. 
(h) Evaluate all valid NTE samples as described in § 86.1912 and include the data in the reporting and record keeping requirements specified in §§ 86.1920 and 1925. Count the engine toward meeting your testing requirements under this subpart and use the data for deciding whether additional engines must be tested under the applicable Phase 1 or Phase 2 test plan.
(i) You may count a vehicle without a single valid NTE sampling event as meeting the vehicle-pass criteria described in §86.1912 if it had at least two hours of non-idle operation in a single shift-day and it is tested over two full shift-days.  Count the vehicle towards meeting your testing requirements under this subpart.
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------

20. Section 86.1910 is revised to read as follows:
--------------------------------------------------------------------------------
§86.1912  How do I determine whether an engine meets the vehicle-pass criteria?
--------------------------------------------------------------------------------
In general, the average emissions for each regulated pollutant must remain at or below the NTE threshold in paragraph (a) of this section for at least 90 percent of the valid NTE sampling events, as defined in paragraph (b) of this section.  For 2007 through 2009 model year engines, the average emissions from every NTE sampling event must also remain below the NTE thresholds in paragraph (g)(2) of this section.  Perform the following steps to determine whether an engine meets the vehicle-pass criteria:
--------------------------------------------------------------------------------
(a) Determine the NTE threshold for each pollutant subject to an NTE standard by adding all three of the following terms and rounding the result to the same number of decimal places as the applicable NTE standard:
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
   (1) The applicable NTE standard.
--------------------------------------------------------------------------------
   (2) The in-use compliance testing margin specified in §86.007-11(h), if any.
--------------------------------------------------------------------------------
   (3) An accuracy margin for portable in-use equipment when testing is performed under the special provisions of §86.1930, depending on the pollutant, as follows:
--------------------------------------------------------------------------------
      (i) NMHC: 0.17 g/hp·hr.
--------------------------------------------------------------------------------
      (ii) CO: 0.60 g/hp·hr.
--------------------------------------------------------------------------------
      (iii) NOx: 0.50 g/hp·hr.
--------------------------------------------------------------------------------
      (iv) PM: 0.10 g/hp·hr. 
      (v) NOx + NMHC: 0.67 g/hp·hr.
   (4) Accuracy margins for portable in-use equipment when testing is not performed under the special provisions of § 86.1930 for 2007 through 2009 model year engine families that are selected for testing in any calendar year as follows:
      (i) NMHC using the emission calculation method specified in 40 CFR 1065.650(a)(1): 0.02 g/hp·hr.
      (ii) NMHC using the emission calculation method specified in 40 CFR 1065.650(a)(3): 0.01 g/hp·hr.
      (iii) NMHC using an alternative emission calculation method we approve under 40 CFR 1065.915(d)(5)(iv): 0.01 g/hp·hr.
      (iv) CO using the emission calculation method specified in 40 CFR 1065.650(a)(1): 0.5 g/hp·hr.
      (v) CO using the emission calculation method specified in 40 CFR 1065.650(a)(3): 0.25 g/hp·hr.
      (vi) CO using an alternative emission calculation method we approve under 40 CFR 1065.915(d)(5)(iv): 0.25 g/hp·hr.
      (vii) NOx using the emission calculation method specified in 40 CFR 1065.650(a)(1): 0.45 g/hp·hr.
      (viii) NOx using the emission calculation method specified in 40 CFR 1065.650(a)(3): 0.15 g/hp·hr.
      (ix) NOx using an alternative emission calculation method we approve under 40 CFR 1065.915(d)(5)(iv): 0.15 g/hp·hr.
      (x) NOx + NMHC using the emission calculation method specified in 40 CFR 1065.650(a)(1): 0.47 g/hp·hr.
      (xi) NOx + NMHC using the emission calculation method specified in 40 CFR 1065.650(a)(3): 0.16 g/hp·hr.
      (xii) NOx + NMHC using an alternative emission calculation method we approve under 40 CFR 1065.915(d)(5)(iv): 0.16 g/hp·hr.
      (xiii) PM:  0.006 g/hp·hr.
   (5) Accuracy margins for portable in-use equipment when testing is not performed under the special provisions of § 86.1930 for 2010 or later model year engines families that are selected for testing in any calendar year as follows:
      (i) NMHC using any emission calculation method specified in 40 CFR 1065.650(a) or an alternative emission calculation method we approve under 40 CFR 1065.915(d)(5)(iv): 0.01 g/hp·hr.
      (ii) CO using any emission calculation method specified in 40 CFR 1065.650(a) or an alternative emission calculation method we approve under 40 CFR 1065.915(d)(5)(iv): 0.25 g/hp·hr.
      (iii) NOx using any emission calculation method specified in 40 CFR 1065.650(a) or an alternative emission calculation method we approve under 40 CFR 1065.915(d)(5)(iv): 0.15 g/hp·hr.
      (iv) PM: 0.006 g/hp·hr.
--------------------------------------------------------------------------------
   
--------------------------------------------------------------------------------
(b) For the purposes of this subpart, a valid NTE sampling event consists of at least 30 seconds of continuous operation in the NTE control area.  An NTE event begins when the engine starts to operate in the NTE control area and continues as long as engine operation remains in this area (see §86.1370).  When determining a valid NTE sampling event, exclude all engine operation in approved NTE limited testing regions under §86.1370-2007(b)(6) and any approved NTE deficiencies under §86.007-11(a)(4)(iv).  Engine operation in the NTE control area of less than 30 contiguous seconds does not count as a valid NTE sampling event; operating periods of less than 30 seconds in the NTE control area, but outside of any allowed deficiency area or limited testing region, will not be added together to make a 30 second or longer event. Exclude any portion of a sampling event that would otherwise exceed the 5.0 percent limit for the time-weighted carve-out defined in §86.1370-2007(b)(7).  For EGR-equipped engines, exclude any operation that occurs during the cold-temperature operation defined by the equations in §86.1370-2007(f)(1).
--------------------------------------------------------------------------------
(c) Calculate the average emission level for each pollutant over each valid NTE sampling event as specified in 40 CFR part 1065, subpart G, using each NTE event as an individual test interval. This should include valid NTE events from all days of testing.
--------------------------------------------------------------------------------
(d) If the engine has an open crankcase, account for these emissions by adding 0.00042 g/hp·hr to the PM emission result for every NTE event.
--------------------------------------------------------------------------------
(e) Calculate a time-weighted vehicle-pass ratio (Rpass) for each pollutant.  To do this, first sum the time from each valid NTE sampling event whose average emission level is at or below the NTE threshold for that pollutant, then divide this value by the sum of the engine operating time from all valid NTE events for that pollutant.  Round the resulting vehicle-pass ratio to two decimal places.  
--------------------------------------------------------------------------------
   (1) Calculate the time-weighted vehicle-pass ratio for each pollutant as follows:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

	\s \* MERGEFORMAT--------------------------------------------------------------------------------
   Where:
--------------------------------------------------------------------------------
   npass = the number of valid sampling events for which the average emission level is at or below the NTE threshold.
--------------------------------------------------------------------------------
   ntotal = the total number of valid NTE sampling events.
--------------------------------------------------------------------------------
   (2) For both the numerator and the denominator of the vehicle-pass ratio, use the smallest of the following values for determining the duration, t, of any NTE sampling event:
--------------------------------------------------------------------------------
      (i) The measured time in the NTE zone that is valid for an NTE sampling event.
--------------------------------------------------------------------------------
      (ii) 600 seconds.
--------------------------------------------------------------------------------
      (iii) 10 times the length of the shortest valid NTE sampling event for all testing with that engine.
--------------------------------------------------------------------------------
(f) The following example illustrates how to select the duration of NTE sampling events for calculations, as described in paragraph (e) of this section:
--------------------------------------------------------------------------------
NTE sample
--------------------------------------------------------------------------------
Duration of NTE sample (seconds)
--------------------------------------------------------------------------------
Duration Limit Applied?
--------------------------------------------------------------------------------
Duration used in calculations (seconds)
--------------------------------------------------------------------------------
1
--------------------------------------------------------------------------------
45
--------------------------------------------------------------------------------
No
--------------------------------------------------------------------------------
45
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
168
--------------------------------------------------------------------------------
No
--------------------------------------------------------------------------------
168
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
605
--------------------------------------------------------------------------------
Yes.  Use 10 times shortest valid NTE.
--------------------------------------------------------------------------------
450
--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
490
--------------------------------------------------------------------------------
Yes.  Use 10 times shortest valid NTE.
--------------------------------------------------------------------------------
450
--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
65
--------------------------------------------------------------------------------
No
--------------------------------------------------------------------------------
65
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
(g) Engines meet the vehicle-pass criteria under this section if they meet both of the following criteria:
--------------------------------------------------------------------------------
   (1) The vehicle-pass ratio calculated according to paragraph (e) of this section must be at least 0.90 for each pollutant.
--------------------------------------------------------------------------------
   (2) For model year 2007 through 2009 engines, emission levels from every valid NTE sampling event must be less than 2.0 times the NTE thresholds calculated according to paragraph (a) of this section for all pollutants, except that engines certified to a NOx FEL at or below 0.50 g/hp·hr may meet the vehicle-pass criteria for NOx if measured NOx emissions from every valid NTE sample are less than either 2.0 times the NTE threshold for NOx or 2.0 g/hp·hr, whichever is greater.
--------------------------------------------------------------------------------

21. Section 86.1920 is amended by revising paragraph (b) introductory text to read as follows:
--------------------------------------------------------------------------------
§86.1920  What in-use testing information must I report to EPA?
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------
(b) Within 45 days after the end of each calendar quarter, send us reports containing the test data from each engine for which testing was completed during the calendar quarter.  Alternatively, you may separately send us the test data within 30 days after you complete testing for an engine.  If you request it, we may allow additional time to send us this information.  Once you send us information under this section, you need not send that information again in later reports.  Prepare your test reports as follows:
*	*	*	*	*

Appendix I to Part 86 -- [Amended]
22. Appendix I to part 86 is amended by removing paragraph (f)(3).

PART 600 -- FUEL ECONOMY AND GREENHOUSE GAS EXHAUST EMISSIONS OF MOTOR VEHICLES
23. The authority citation for part 600 continues to read as follows:
Authority:   49 U.S.C. 32901 -- 23919q, Pub. L. 109 - 58.

Subpart A -- General Provisions

24. Section 600.002 is amended by revising the definitions for "Engine code". "Subconfiguration","Transmission class". and "Vehicle configuration" to read as follows:
§600.002   Definitions.
*	*	*	*	*
Engine code means one of the following:
(1) For LDV, LDT, and MDPV, engine code means a unique combination, within an engine-system combination (as defined in §86.1803 of this chapter), of displacement, fuel injection (or carburetion or other fuel delivery system), calibration, distributor calibration, choke calibration, auxiliary emission control devices, and other engine and emission control system components specified by the Administrator. For electric vehicles, engine code means a unique combination of manufacturer, electric traction motor, motor configuration, motor controller, and energy storage device.
(2) For HDV, engine code has the meaning given in §86.1819-14(d)(12).
*	*	*	*	*
Subconfiguration means one of the following:
(1) For LDV, LDT, and MDPV, subconfiguration means a unique combination within a vehicle configuration of equivalent test weight, road-load horsepower, and any other operational characteristics or parameters which the Administrator determines may significantly affect fuel economy or CO2 emissions within a vehicle configuration.
(2) For HDV, subconfiguration has the meaning given in §86.1819-14(d)(12).
*	*	*	*	*
Transmission class means a group of transmissions having the following common features: Basic transmission type (e.g., automatic, manual, automated manual, semi-automatic, or continuously variable); number of forward gears used in fuel economy testing (e.g., manual four-speed, three-speed automatic, two-speed semi-automatic); drive system (e.g., front wheel drive, rear wheel drive; four wheel drive), type of overdrive, if applicable (e.g., final gear ratio less than 1.00, separate overdrive unit); torque converter type, if applicable (e.g., non-lockup, lockup, variable ratio); and other transmission characteristics that may be determined to be significant by the Administrator.
*	*	*	*	*
Vehicle configuration means one of the following:
(1) For LDV, LDT, and MDPV, vehicle configuration means a unique combination of basic engine, engine code, inertia weight class, transmission configuration, and axle ratio within a base level.   Note that for heavy-duty vehicles, configuration is defined in the provisions of 86.1819-14(d)(12)(i). 
(2) For HDV, vehicle configuration has the meaning given for "configuration" in §86.1819-14(d)(12).

Subpart B -- Fuel Economy and Carbon-Related Exhaust Emission Test Procedures

25. Section 600.113-12 is amended by revising paragraphs (m), (n) introductory text, (n)(2), and (n)(3) and adding paragraph (o) to read as follows:
§ 600.113-12   Fuel economy, CO2 emissions, and carbon-related exhaust emission calculations for FTP, HFET, US06, SC03 and cold temperature FTP tests.
* * * * *
(m)(1) For automobiles fueled with liquefied petroleum gas and automobiles designed to operate on gasoline and liquefied petroleum gas, the fuel economy in miles per gallon of liquefied petroleum gas is to be calculated using the following equation:
mpge=CWFfuelxSGfuelx3781.8CWFHCxHC+0.429xCO+0.273xCO2
Where:
mpge = miles per gasoline gallon equivalent of liquefied petroleum gas.
CWFfuel = carbon weight fraction based on the hydrocarbon constituents in the liquefied petroleum gas fuel as obtained in paragraph (f)(5) of this section and rounded according to paragraph (g)(3) of this section.
SG = Specific gravity of the fuel as determined in paragraph (f)(5) of this section and rounded according to paragraph (g)(3) of this section.
3781.8 = Grams of H2O per gallon conversion factor.
CWFHC = Carbon weight fraction of exhaust hydrocarbons = CWFfuel as determined in paragraph (f)(4) of this section and rounded according to paragraph (f)(3) of this section.
HC = Grams/mile HC as obtained in paragraph (g)(2) of this section.
CO = Grams/mile CO as obtained in paragraph (g)(2) of this section.
CO2 = Grams/mile CO2 as obtained in paragraph (g)(2) of this section.
(2)(i) For automobiles fueled with liquefied petroleum gas and automobiles designed to operate on gasoline and liquefied petroleum gas, the carbon-related exhaust emissions in grams per mile while operating on liquefied petroleum gas is to be calculated for 2012 and later model year vehicles using the following equation and rounded to the nearest 1 gram per mile:
CREE = (CWFHC/0.273 x HC) + (1.571 x CO) + CO2
Where:
CREE means the carbon-related exhaust emission value as defined in §600.002.
CWFHC = Carbon weight fraction of exhaust hydrocarbons = CWFfuel as determined in paragraph (f)(5) of this section and rounded according to paragraph (g)(3) of this section.
HC = Grams/mile HC as obtained in paragraph (g)(2) of this section.
CO = Grams/mile CO as obtained in paragraph (g)(2) of this section.
CO2 = Grams/mile CO2 as obtained in paragraph (g)(2) of this section.
(ii) For manufacturers complying with the fleet averaging option for N2O and CH4 as allowed under §86.1818 of this chapter, the carbon-related exhaust emissions in grams per mile for 2012 and later model year automobiles fueled with liquefied petroleum gas and automobiles designed to operate on mixtures of gasoline and liquefied petroleum gas while operating on liquefied petroleum gas is to be calculated using the following equation and rounded to the nearest 1 gram per mile:
CREE = [(CWFexHC/0.273) x NMHC] + (1.571 x CO) + CO2 + (298 x N2O) + (25 x CH4)
Where:
CREE means the carbon-related exhaust emission value as defined in §600.002.
CWFHC = Carbon weight fraction of exhaust hydrocarbons = CWFfuel as determined in paragraph (f)(5) of this section and rounded according to paragraph (g)(3) of this section.
NMHC = Grams/mile HC as obtained in paragraph (g)(2) of this section.
CO = Grams/mile CO as obtained in paragraph (g)(2) of this section.
CO2 = Grams/mile CO2 as obtained in paragraph (g)(2) of this section.
N2O = Grams/mile N2O as obtained in paragraph (g)(2) of this section.
CH4 = Grams/mile CH4 as obtained in paragraph (g)(2) of this section.
(n) Manufacturers shall determine CO2 emissions and carbon-related exhaust emissions for electric vehicles, fuel cell vehicles, and plug-in hybrid electric vehicles according to the provisions of this paragraph (n). Subject to the limitations on the number of vehicles produced and delivered for sale as described in §86.1866 of this chapter, the manufacturer may be allowed to use a value of 0 grams/mile to represent the emissions of fuel cell vehicles and the proportion of electric operation of a electric vehicles and plug-in hybrid electric vehicles that is derived from electricity that is generated from sources that are not onboard the vehicle, as described in paragraphs (n)(1) through (3) of this section. For purposes of labeling under this part, the CO2 emissions for electric vehicles shall be 0 grams per mile. Similarly, for purposes of labeling under this part, the CO2 emissions for plug-in hybrid electric vehicles shall be 0 grams per mile for the proportion of electric operation that is derived from electricity that is generated from sources that are not onboard the vehicle. For manufacturers no longer eligible to use 0 grams per mile to represent electric operation, and for all 2026 and later model year electric vehicles, fuel cell vehicles, and plug-in hybrid electric vehicles, the provisions of this paragraph (n) shall be used to determine the non-zero value for CREE for purposes of meeting the greenhouse gas emission standards described in §86.1818 of this chapter. 
* * * * *
(2) For plug-in hybrid electric vehicles the carbon-related exhaust emissions in grams per mile is to be calculated according to the provisions of §600.116, except that the CREE for charge-depleting operation shall be the sum of the CREE associated with gasoline consumption and the net upstream CREE determined according to paragraph (n)(1) of this section, rounded to the nearest one gram per mile. 
(3) For 2012 and later model year fuel cell vehicles, the carbon-related exhaust emissions in grams per mile shall be calculated using the method specified in paragraph (n)(1) of this section, except that CREEUP shall be determined according to procedures established by the Administrator under §600.111 - 08(f). As described in §86.1866 of this chapter the value of CREE may be set equal to zero for a certain number of 2012 through 2025 model year fuel cell vehicles.
(o) Equations for fuels other than those specified in this section may be used with advance EPA approval. Alternate calculation methods for fuel economy and carbon-related exhaust emissions may be used in lieu of the methods described in this section if shown to yield equivalent or superior results and if approved in advance by the Administrator. 

Subpart C -- Procedures For Calculating Fuel Economy and Carbon-Related Exhaust Emission Values

26. Section 600.208-12 is amended by revising paragraph (a)(2)(iii) to read as follows:
§ 600.208-12   Calculation of FTP-based and HFET-based fuel economy, CO2 emissions, and carbon-related exhaust emissions for a model type.
* * * * *
(a) * * *
(2) * * *
(iii) All subconfigurations within the new base level are represented by test data in accordance with § 600.010(c)(1)(iii).
* * * * *

27. Section 600.210-12 is amended by revising paragraph (c)(2)(iv)(C) to read as follows:
§ 600.210-12   Calculation of fuel economy and CO2 emission values for labeling.
* * * * *
(c) * * *
(2) * * *
(iv) * * *
(C) Calculate a composite city CO2 emission rate and a composite highway CO2 emission rate by combining the separate results for battery and engine operation using the procedures described in §600.116. Use these values to calculate the vehicle's combined CO2 emissions as described in paragraph (c)(2)(i) of this section.
*	*	*	*	*

PART 1033 -- CONTROL OF EMISSIONS FROM LOCOMOTIVES 

28. The authority citation for part 1033 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.

Subpart A -- Overview and Applicability

29. Section 1033.1 is amended by revising paragraph (e) to read as follows:
§1033.1  Applicability.
*	*	*	*	*
(e)  The provisions of this part apply as specified for locomotives manufactured or remanufactured on or after July 7, 2008.  See §1033.102 to determine whether the standards of this part or the standards specified in Appendix I of this part apply for model years 2008 through 2012.  For example, for a locomotive that was originally manufactured in 2007 and remanufactured on April 10, 2014, the provisions of this part begin to apply on April 10, 2014.

30. Section 1033.30 is revised to read as follows:
§1033.30 Submission of information.
Send all reports and requests for approval to the Designated Compliance Officer (see §1033.901). See §1033.925 for additional reporting and recordkeeping provisions.
Subpart B -- Emission Standards and Related Requirements 

31. Section 1033.101 is amended by revising paragraph (f)(1)(ii) to read as follows:
§1033.101  Exhaust emission standards.
*	*	*	*	*
(f)	*	*	*
   (1)	*	*	*
      (ii) Gaseous-fueled locomotives: NMHC emissions.  This includes dual-fuel locomotives that use a combination of a gaseous fuel and a nongaseous fuel.
*	*	*	*	*

32. Section 1033.102 is amended by revising paragraphs (a) and (b) to read as follows:
§1033.102 Transition to the standards of this part.
(a)  Except as specified in §1033.150(a), the Tier 0 and Tier 1 standards of §1033.101 apply for new locomotives beginning January 1, 2010, except as specified in §1033.150(a).  The Tier 0 and Tier 1 standards specified in Appendix I of this part apply for earlier model years.
(b) Except as specified in §1033.150(a), the Tier 2 standards of §1033.101 apply for new locomotives beginning January 1, 2013.  The Tier 2 standards specified in Appendix I of this part apply for earlier model years.
*	*	*	*	*

33. Section 1033.120 is amended by revising paragraph (b) to read as follows:
§1033.120 Emission-related warranty requirements.
*	*	*	*	*
(b) Warranty period. Except as specified in this paragraph, the minimum warranty period is one-third of the useful life. Your emission-related warranty must be valid for at least as long as the minimum warranty periods listed in this paragraph (b) in MW-hrs of operation (or miles for Tier 0 locomotives not equipped with MW-hr meters) and years, whichever comes first.  You may offer an emission-related warranty more generous than we require.  The emission-related warranty for the locomotive may not be shorter than any basic mechanical warranty you provide without charge for the locomotive.  Similarly, the emission-related warranty for any component may not be shorter than any warranty you provide without charge for that component.  This means that your warranty may not treat emission-related and nonemission-related defects differently for any component.  If you provide an extended warranty to individual owners for any components covered in paragraph (c) of this section for an additional charge, your emission-related warranty must cover those components for those owners to the same degree.  If the locomotive does not record MW-hrs, we base the warranty periods in this paragraph (b) only on years.  The warranty period begins when the locomotive is placed into service, or back into service after remanufacture.
*	*	*	*	*

Subpart C -- Certifying Engine Families

34. Section 1033.201 is amended by revising paragraphs (a) and (g) to read as follows:
§1033.201  General requirements for obtaining a certificate of conformity.
*	*	*	*	*
(a) You must send us a separate application for a certificate of conformity for each engine family.  A certificate of conformity is valid for new production from the indicated effective date, until the end of the model year for which it is issued, which may not extend beyond December 31 of that year.  No certificate will be issued after December 31 of the model year. You may amend your application for certification after the end of the model year in certain circumstances as described in §§ 1033.220 and 1033.225.  You must renew your certification annually for any locomotives you continue to produce.
*	*	*	*	*
(g) We may require you to deliver your test engines or locomotives to a facility we designate for our testing (see §1033.235(c)).  Alternatively, you may choose to deliver another engine/locomotive that is identical in all material respects to the test locomotive, or another engine/locomotive that we determine can appropriately serve as an emission-data locomotive for the engine family.
*	*	*	*	*

35. Section 1033.225 is amended by revising the introductory text and paragraph (b)(4) to read as follows:
§1033.225 Amending applications for certification.
Before we issue you a certificate of conformity, you may amend your application to include new or modified locomotive configurations, subject to the provisions of this section. After we have issued your certificate of conformity, but before the end of the model year, you may send us an amended application requesting that we include new or modified locomotive configurations within the scope of the certificate, subject to the provisions of this section. Before the end of the model year, you must also amend your application if any changes occur with respect to any information that is included or should be included in your application. For example, you must amend your application if you determine that your actual production variation for an adjustable parameter exceeds the tolerances specified in your application. After the end of the model year, you may amend your application only to update maintenance instructions as described in §1033.220 or to modify an FEL as described in paragraph (f) of this section.
*	*	*	*	*
(b) 	*	*	*
(4) Include any other information needed to make your application correct and complete.
*	*	*	*	*

36. Section 1033.235 is amended by revising paragraphs (b) and (c)(4) to read as follows:
§1033.235 Emission testing required for certification.
*	*	*	*	*
(b) Test your emission-data locomotives using the procedures and equipment specified in subpart F of this part. In the case of dual-fuel locomotives, measure emissions when operating with each type of fuel for which you intend to certify the locomotive. In the case of flexible-fuel locomotives, measure emissions when operating with the fuel mixture that is most likely to cause the locomotive to exceed the applicable NOX emission standard, though you may ask us to instead perform tests with both fuels separately if you can show that intermediate mixtures are not likely to occur in use.
(c)	*	*	*
(4) Before we test one of your locomotives, we may calibrate it within normal production tolerances for anything we do not consider an adjustable parameter.  For example, this would apply for a parameter that is subject to production variability because it is adjustable during production, but is not considered an adjustable parameter (as defined in §1033.901) because it is permanently sealed.
*	*	*	*	*

37. Section 1033.245 is amended by revising the introductory text and paragraphs (b) introductory text and (b)(3) to read as follows:
§1033.245 Deterioration factors. 
Establish deterioration factors for each pollutant to determine, as described in §1033.240, whether your locomotives will meet emission standards for each pollutant throughout the useful life.  Determine deterioration factors as described in this section, either with an engineering analysis, with pre-existing test data, or with new emission measurements.  The deterioration factors are intended to reflect the deterioration expected to result during the useful life of a locomotive maintained as specified in §1033.125.  If you perform durability testing, the maintenance that you may perform on your emission-data locomotive is limited to the maintenance described in §1033.125.  You may carry across a deterioration factor from one engine family to another consistent with good engineering judgment. 
*	*	*	*	*
(b) Apply deterioration factors as follows:
   *	*	*	*	*
   (3) Sawtooth deterioration patterns. The deterioration factors described in paragraphs (b)(1) and (2) of this section assume that the highest useful life emissions occur either at the end of useful life or at the low-hour test point. The provisions of this paragraph (b)(3) apply where good engineering judgment indicates that the highest emissions over the useful life will occur between these two points. For example, emissions may increase with service accumulation until a certain maintenance step is performed, then return to the low-hour emission levels and begin increasing again. Base deterioration factors for locomotives with such emission patterns on the difference between (or ratio of) the point at which the highest emissions occur and the low-hour test point. Note that this applies for maintenance-related deterioration only where we allow such critical emission-related maintenance.
   (4) Dual-fuel engines. In the case of dual-fuel locomotives, apply deterioration factors separately for each fuel type.
*	*	*	*	*

38. Section 1033.250 is amended by revising paragraphs (b)(3)(iv) and (c) to read as follows:
§1033.250 Reporting and recordkeeping.
*	*	*	*	*
(b) 	*	*	*
(3)	*	*	*
(iv) All your emission tests (valid and invalid), including the date and purpose of each test and documentation of test parameters as specified in part 40 CFR part 1065, and the date and purpose of each test.
*	*	*	*	*
(c) Keep required data from emission tests and all other information specified in this section for eight years after we issue your certificate. If you use the same emission data or other information for a later model year, the eight-year period restarts with each year that you continue to rely on the information.
*	*	*	*	*

39. Section 1033.255 is amended by revising paragraphs (c)(2), (c)(4), (d), and (e) to read as follows:
§1033.255  EPA decisions.
*	*	*	*	*
(c) 	*	*	*
   (2) Submit false or incomplete information (paragraph (e) of this section applies if this is fraudulent). This includes doing anything after submission of your application to render any of the submitted information false or incomplete.
*	*	*	*	*
   (4) Deny us from completing authorized activities (see 40 CFR 1068.20). This includes a failure to provide reasonable assistance.
*	*	*	*	*
(d) We may void the certificate of conformity for an engine family if you fail to keep records, send reports, or give us information as required under this part or the Act.  Note that these are also violations of 40 CFR 1068.101(a)(2).
(e) We may void your certificate if we find that you intentionally submitted false or incomplete information. This includes rendering submitted information false or incomplete after submission.
*	*	*	*	*


Subpart F -- Test Procedures

40.   Section 1033.501 is amended by revising paragraph (a)(3) and adding paragraph (j) to read as follows:
§1033.501   General provisions.
(a)	*	*	*
(3) The following provisions apply for engine mapping, duty cycle generation, and cycle validation to account for the fact that locomotive operation and locomotive duty cycles are based on operator demand from locomotive notch settings, not on target values for engine speed and load:
   (i) The provisions related to engine mapping, duty cycle generation, and cycle validation in 40 CFR 1065.510,1065.512, and 1065.514 do not apply for testing complete locomotives. 
   (ii) The provisions related to engine mapping and duty cycle generation in 40 CFR 1065.510 and 1065.512 are not required for testing with an engine dynamometer; however, the cycle validation criteria of 40 CFR 1065.514 apply for such testing.  Demonstrate compliance with cycle validation criteria based on manufacturer-declared values for maximum torque, maximum power, and maximum test speed, or determine these values from an engine map generated according to 40 CFR 1065.510.  If you test using a ramped-modal cycle, you may perform cycle validation over all the test intervals together.
*	*	*	*	* 
(j) The following provisions apply for locomotives using aftertreatment technology with infrequent regeneration events that may occur during testing:
   (1) Adjust measured emissions to account for aftertreatment technology with infrequent regeneration as described in §1033.535.
   (2) Invalidate a smoke test if active regeneration starts to occur during the test.

41. Section 1033.515 is amended by revising paragraphs (c)(2)(ii) and (c)(5)(ii) to read as follows:
§1033.515  Discrete-mode steady-state emission tests of locomotives and locomotive engines.
*	*	*	*	*
(c)	*	*	*
(2)	*	*	*
(ii) The sample period is 300 seconds for all test modes except mode 8.  The sample period for test mode 8 is 600 seconds.
*	*	*	*	*
(5) 	*	*	*
(ii) Group the modes in the same manner as the test intervals of the ramped modal cycle and use three different dilution settings for the groups.  Use one setting for both idle modes, one for dynamic brake through Notch 5, and one for Notches 6 through 8.  For each group, ensure that the mode with the highest exhaust flow (typically normal idle, Notch 5, and Notch 8) meets the criteria for minimum dilution ratio in 40 CFR part 1065.
*	*	*	*	*
  
42. Section 1033.520 is revised to read as follows:
§1033.520   Alternative ramped modal cycles.
--------------------------------------------------------------------------------
(a) Locomotive testing over a ramped modal cycle is intended to improve measurement accuracy at low emission levels by allowing the use of batch sampling of PM and gaseous emissions over multiple locomotive notch settings.  Ramped modal cycles combine multiple test modes of a discrete-mode steady-state into a single sample period.  Time in notch is varied to be proportional to weighting factors.  The ramped modal cycle for line-haul locomotives is shown in Table 1 to this section.  The ramped modal cycle for switch locomotives is shown in Table 2 to this section.  Both ramped modal cycles consist of a warm-up followed by three test intervals that are each weighted in a manner that maintains the duty cycle weighting of the line-haul and switch locomotive duty cycles in §1033.530. You may use ramped modal cycle testing for any locomotives certified under this part.
--------------------------------------------------------------------------------
(b) Ramped modal testing requires continuous gaseous analyzers and three separate PM filters (one for each test interval).  You may collect a single batch sample for each test interval, but you must also measure gaseous emissions continuously to allow calculation of notch caps as required under §1033.101. 
--------------------------------------------------------------------------------
(c) You may operate the engine in any way you choose to warm it up.  Then follow the provisions of 40 CFR part 1065, subpart F for general pre-test procedures (including engine and sampling system pre-conditioning).  
--------------------------------------------------------------------------------
(d) Begin the test by operating the locomotive over the pre-test portion of the cycle.  For locomotives not equipped with catalysts, you may begin the test as soon as the engine reaches its lowest idle setting.  For catalyst-equipped locomotives, you may begin the test in normal idle mode if the engine does not reach its lowest idle setting within 15 minutes.  If you do start in normal idle, run the low idle mode after normal idle, then resume the specified mode sequence (without repeating the normal idle mode).
--------------------------------------------------------------------------------
(e) Start the test according to 40 CFR 1065.530.
--------------------------------------------------------------------------------
   (1) Each test interval begins when operator demand is set to the first operator demand setting of each test interval of the ramped modal cycle.  Each test interval ends when the time in mode is reached for the last mode in the test interval.
--------------------------------------------------------------------------------
   (2) For PM emissions (and other batch sampling), the sample period over which emissions for the test interval are averaged generally begins within 10 seconds after the operator demand is changed to start the test interval and ends within 5 seconds of the sampling time for the test mode is reached (see Table 1 to this section).  You may ask to delay the start of the sample period to account for sample system residence times longer than 10 seconds.
--------------------------------------------------------------------------------
   (3) Use good engineering judgment when transitioning between test intervals. 
--------------------------------------------------------------------------------
      (i) You should come as close as possible to simultaneously:
--------------------------------------------------------------------------------
         (A) Ending batch sampling of the previous test interval.
--------------------------------------------------------------------------------
         (B) Starting batch sampling of the next test interval.
--------------------------------------------------------------------------------
         (C) Changing the operator demand to the notch setting for the first mode in the next test interval.
--------------------------------------------------------------------------------
      (ii)  Avoid the following:
--------------------------------------------------------------------------------
         (A)  Overlapping batch sampling of the two test intervals.
--------------------------------------------------------------------------------
         (B)  An unnecessarily long delay before starting the next test interval.
--------------------------------------------------------------------------------
      (iii) For example, the following sequence would generally be appropriate:
--------------------------------------------------------------------------------
         (A) End batch sampling for Interval 2 after 304 seconds in Notch 5.
--------------------------------------------------------------------------------
         (B)  Switch the operator demand to Notch 6 one second later.
--------------------------------------------------------------------------------
         (C)  Begin batch sampling for Interval 3 one second after switching to Notch 6.
--------------------------------------------------------------------------------
   (4) If applicable, begin the smoke test at the start of the first test test interval of the applicable ramped modal cycle.  Continue collecting smoke data until the completion of final test interval.  Refer to §1033.101 to determine applicability of the smoke standards and §1033.525 for details on how to conduct a smoke test.
--------------------------------------------------------------------------------
   (5) Proceed through each test interval of the applicable ramped modal cycle in the order specified until the test is completed.
--------------------------------------------------------------------------------
   (6) If you must void a test interval you may repeat it.  To do so, begin with a warm engine operating at the notch setting for the last mode in the previous test interval. You do not need to repeat later test intervals if they were valid.  (Note: you must report test results for all voided tests and test intervals.)
--------------------------------------------------------------------------------
    (7) Following the completion of the third test interval of the applicable ramped modal cycle, conduct the post-test sampling procedures specified in 40 CFR 1065.530.  
--------------------------------------------------------------------------------
(f) Calculate your cycle-weighted brake-specific emission rates as follows:
--------------------------------------------------------------------------------
   (1) For each test interval j:
--------------------------------------------------------------------------------
      (i) Calculate emission rates (Eij) for each pollutant i as the total mass emissions divided by the total time in the test interval.
--------------------------------------------------------------------------------
      (ii) Calculate average power (Pj) as the total work divided by the total time in the test interval.
--------------------------------------------------------------------------------
   (2) For each pollutant, calculate your cycle-weighted brake-specific emission rate using the following equation, where wj is the weighting factor for test interval j:
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
(g) The following tables define applicable ramped modal cycles for line-haul and switch locomotives:
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Table 1 to §1033.520: Line-haul locomotive ramped modal cycle
--------------------------------------------------------------------------------
RMC Test 
--------------------------------------------------------------------------------
Interval
--------------------------------------------------------------------------------
Weighting Factor
--------------------------------------------------------------------------------
RMC Mode
--------------------------------------------------------------------------------
Time in mode (seconds)
--------------------------------------------------------------------------------
Notch Setting
--------------------------------------------------------------------------------
Pre-test idle
--------------------------------------------------------------------------------
NA
--------------------------------------------------------------------------------
NA
--------------------------------------------------------------------------------
600 to 900
--------------------------------------------------------------------------------
Lowest idle setting[1]
--------------------------------------------------------------------------------
Interval 1 
--------------------------------------------------------------------------------
(Idle test)
--------------------------------------------------------------------------------
0.380
--------------------------------------------------------------------------------
A
--------------------------------------------------------------------------------
600
--------------------------------------------------------------------------------
Low Idle[2]
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
B
--------------------------------------------------------------------------------
600
--------------------------------------------------------------------------------
Normal Idle
--------------------------------------------------------------------------------
Interval Transition
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Interval 2
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
0.389
--------------------------------------------------------------------------------
C
--------------------------------------------------------------------------------
1000
--------------------------------------------------------------------------------
Dynamic Brake[3]
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1
--------------------------------------------------------------------------------
520
--------------------------------------------------------------------------------
Notch 1
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
520
--------------------------------------------------------------------------------
Notch 2
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
416
--------------------------------------------------------------------------------
Notch 3
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
352
--------------------------------------------------------------------------------
Notch 4
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
304
--------------------------------------------------------------------------------
Notch 5
--------------------------------------------------------------------------------
Interval Transition
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Interval 3
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
0.231
--------------------------------------------------------------------------------
6
--------------------------------------------------------------------------------
144
--------------------------------------------------------------------------------
Notch 6
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
7
--------------------------------------------------------------------------------
111
--------------------------------------------------------------------------------
Notch 7
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
8
--------------------------------------------------------------------------------
600
--------------------------------------------------------------------------------
Notch 8
--------------------------------------------------------------------------------
[1] See paragraph (d) of this section for alternate pre-test provisions. 
--------------------------------------------------------------------------------
[2] Operate at normal idle for modes A and B if not equipped with multiple idle settings.
--------------------------------------------------------------------------------
3 Operate at normal idle if not equipped with a dynamic brake.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Table 2 to §1033.520 -- Switch Locomotive Ramped Modal Cycle
--------------------------------------------------------------------------------
RMC test interval
--------------------------------------------------------------------------------
Weighting factor
--------------------------------------------------------------------------------
RMC mode
--------------------------------------------------------------------------------
Time in mode
(seconds)
--------------------------------------------------------------------------------
Notch setting
--------------------------------------------------------------------------------
Pre-test idle
--------------------------------------------------------------------------------
NA
--------------------------------------------------------------------------------
NA
--------------------------------------------------------------------------------
600 to 900
--------------------------------------------------------------------------------
Lowest idle setting[1]
--------------------------------------------------------------------------------
Interval 1
--------------------------------------------------------------------------------
  
--------------------------------------------------------------------------------
A
--------------------------------------------------------------------------------
600
--------------------------------------------------------------------------------
Low Idle.[2]
--------------------------------------------------------------------------------
(Idle test)
--------------------------------------------------------------------------------
0.598
--------------------------------------------------------------------------------
B
--------------------------------------------------------------------------------
600
--------------------------------------------------------------------------------
Normal Idle.
--------------------------------------------------------------------------------
Interval Transition
--------------------------------------------------------------------------------
  
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
1
--------------------------------------------------------------------------------
868
--------------------------------------------------------------------------------
Notch 1.
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
  
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
861
--------------------------------------------------------------------------------
Notch 2.
--------------------------------------------------------------------------------
Interval 2
--------------------------------------------------------------------------------
0.377
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
406
--------------------------------------------------------------------------------
Notch 3.
--------------------------------------------------------------------------------
  
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
4
--------------------------------------------------------------------------------
252
--------------------------------------------------------------------------------
Notch 4.
--------------------------------------------------------------------------------
  
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
5
--------------------------------------------------------------------------------
252
--------------------------------------------------------------------------------
Notch 5.
--------------------------------------------------------------------------------
Interval Transition
--------------------------------------------------------------------------------
  
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
6
--------------------------------------------------------------------------------
1080
--------------------------------------------------------------------------------
Notch 6.
--------------------------------------------------------------------------------
Interval 3
--------------------------------------------------------------------------------
0.025
--------------------------------------------------------------------------------
7
--------------------------------------------------------------------------------
144
--------------------------------------------------------------------------------
Notch 7.
--------------------------------------------------------------------------------
  
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
8
--------------------------------------------------------------------------------
576
--------------------------------------------------------------------------------
Notch 8.
--------------------------------------------------------------------------------
[1]See paragraph (d) of this section for alternate pre-test provisions.
--------------------------------------------------------------------------------
[2]Operate at normal idle for modes A and B if not equipped with multiple idle settings.
*	*	*	*	*

43. Section 1033.535 is revised to read as follows:
§1033.535  Adjusting emission levels to account for infrequently regenerating aftertreatment devices.
For locomotives using aftertreatment technology with infrequent regeneration events that may occur during testing, take one of the following approaches to account for the emission impact of regeneration:
(a) You may use the calculation methodology described in 40 CFR 1065.680 to adjust measured emission results.  Do this by developing an upward adjustment factor and a downward adjustment factor for each pollutant based on measured emission data and observed regeneration frequency as follows:
   (1) Adjustment factors should generally apply to an entire engine family, but you may develop separate adjustment factors for different configurations within an engine family.  Use the adjustment factors from this section for all testing for the engine family.
   (2) You may use carryover or carry-across data to establish adjustment factors for an engine family as described in the §1033.235, consistent with good engineering judgment.
   (3) Determine the frequency of regeneration, F, as described in 40 CFR 1065.680 from in-use operating data or from running repetitive tests in a laboratory.  If the engine is designed for regeneration at fixed time intervals, you may apply good engineering judgment to determine F based on those design parameters.  All adjustment factors for regeneration are additive.
   (4) Identify the value of F in each application for the certification for which it applies. 
   (5) Apply the provisions for ramped-modal testing based on measurements for each test interval rather than the whole ramped-modal test.
(b) You may ask us to approve an alternate methodology to account for regeneration events.  We will generally limit approval to cases where your engines use aftertreatment technology with extremely infrequent regeneration and you are unable to apply the provisions of this section.
(c) You may choose to make no adjustments to measured emission results if you determine that regeneration does not significantly affect emission levels for an engine family (or configuration) or if it is not practical to identify when regeneration occurs. If you choose not to make adjustments under paragraph (a) or (b) of this section, your engines must meet emission standards for all testing, without regard to regeneration.

--------------------------------------------------------------------------------
Subpart G -- Special Compliance Provisions
--------------------------------------------------------------------------------

44. Section 1033.601 is amended by adding paragraph (f) to read as follows:
--------------------------------------------------------------------------------
§ 1033.601 General compliance provisions.
*	*	*	*	*
(f) Multi-fuel locomotives. Subpart C of this part describes how to test and certify dual-fuel and flexible-fuel locomotives. Some multi-fuel locomotives may not fit either of those defined terms.  For such locomotives, we will determine whether it is most appropriate to treat them as single-fuel locomotives, dual-fuel locomotives, or flexible-fuel locomotives based on the range of possible and expected fuel mixtures.  For example, a locomotive might burn natural gas but initiate combustion with a pilot injection of diesel fuel.  If the locomotive is designed to operate with a single fueling algorithm (i.e., fueling rates are fixed at a given engine speed and load condition), we would generally treat it as a single-fuel locomotive,  In this context, the combination of diesel fuel and natural gas would be its own fuel type.  If the locomotive is designed to also operate on diesel fuel alone, we would generally treat it as a dual-fueled locomotive.  If the locomotive is designed to operate on varying mixtures of the two fuels, we would generally treat it as a flexible-fueled locomotive. To the extent that requirements vary for the different fuels or fuel mixtures, we may apply the more stringent requirements.

--------------------------------------------------------------------------------
Subpart H -- Averaging, Banking, and Trading for Certification
--------------------------------------------------------------------------------

45. Section 1033.701 is amended by revising paragraph (k) to read as follows:
--------------------------------------------------------------------------------
§ 1033.701 General provisions.
--------------------------------------------------------------------------------
*	*	*	*	*
(k) You may use either of the following approaches to retire or forego emission credits:
   (1) You may trade emission credits generated from any number of your locomotives to the locomotive purchasers or other parties to retire the credits.  Identify any such credits in the reports described in §1033.730.  Locomotives must comply with the applicable FELs even if you donate or sell the corresponding emission credits under this paragraph (e).  Those credits may no longer be used by anyone to demonstrate compliance with any EPA emission standards.
   (2) You may certify a family using an FEL below the emission standard as described in this part and choose not to generate emission credits for that family.  If you do this, you do not need to calculate emission credits for those families and you do not need to submit or keep the associated records described in this subpart for that family.
46. Section 1033.710 is amended by revising paragraph (c) to read as follows:
--------------------------------------------------------------------------------
§ 1033.710 Averaging emission credits.
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------
(c) If you certify an engine family to an FEL that exceeds the otherwise applicable emission standard, you must obtain enough emission credits to offset the engine family's deficit by the due date for the final report required in §1033.730. The emission credits used to address the deficit may come from your other engine families that generate emission credits in the same model year, from emission credits you have banked from previous model years, or from emission credits generated in the same or previous model years that you obtained through trading or by transfer.
--------------------------------------------------------------------------------

47. Section 1033.720 is amended by revising paragraph (a) to read as follows:
--------------------------------------------------------------------------------
§1033.720   Trading emission credits.
--------------------------------------------------------------------------------
(a) Trading is the exchange of emission credits between certificate holders, or the transfer of credits to another party to retire them. You may use traded emission credits for averaging, banking, or further trading transactions. Traded emission credits may be used only as allowed by §1033.740.
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------

48. Section 1033.725 is amended by revising paragraph (b)(2) to read as follows:
--------------------------------------------------------------------------------
§ 1033.725 Requirements for your application for certification.
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------
(b)	*	*	*
--------------------------------------------------------------------------------
(2) Detailed calculations of projected emission credits (positive or negative) based on projected production volumes. We may require you to include similar calculations from your other engine families to demonstrate that you will be able to avoid negative credit balances for the model year. If you project negative emission credits for a family, state the source of positive emission credits you expect to use to offset the negative emission credits.
--------------------------------------------------------------------------------

49. Section 1033.730 is amended by revising paragraphs (b)(1), (b)(4), and (c)(2) to read as follows:
--------------------------------------------------------------------------------
§ 1033.730 ABT reports.
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------
(b)	*	*	*
--------------------------------------------------------------------------------
(1) Engine family designation and averaging sets (whether switch, line-haul, or both).
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------
(4) The projected and actual U.S.-directed production volumes for the model year as described in §1033.705. If you changed an FEL during the model year, identify the actual U.S.-directed production volume associated with each FEL.
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------
(c)	*	*	*
--------------------------------------------------------------------------------
(2) State whether you will retain any emission credits for banking. If you choose to retire emission credits that would otherwise be eligible for banking, identify the engine families that generated the emission credits, including the number of emission credits from each family.
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------

50. Section 1033.735 is amended by revising paragraphs (a) and (b) to read as follows:
--------------------------------------------------------------------------------
§ 1033.735 Required records.
--------------------------------------------------------------------------------
(a) You must organize and maintain your records as described in this section. 
--------------------------------------------------------------------------------
(b) Keep the records required by this section for at least eight years after the due date for the end-of-year report. You may not use emission credits for any engines if you do not keep all the records required under this section. You must therefore keep these records to continue to bank valid credits. 
*	*	*	*	*

Subpart I -- Requirements for Owners and Operators

51. Section 1033.815 is amended by revising paragraphs (b) and (e) introductory text to read as follows:
--------------------------------------------------------------------------------
§ 1033.815 Maintenance, operation, and repair.
--------------------------------------------------------------------------------
*	*	*	*	*
(b) Perform unscheduled maintenance in a timely manner. This includes malfunctions identified through the locomotive's emission control diagnostics system and malfunctions discovered in components of the diagnostics system itself. For most repairs, this paragraph (b) requires that the maintenance be performed no later than the locomotive's next periodic (92-day or 184-day) inspection. See paragraph (e) of this section, for reductant replenishment requirements in a locomotive equipped with an SCR system.
*	*	*	*	*
(e) For locomotives equipped with emission controls requiring the use of specific fuels, lubricants, or other fluids, proper maintenance includes complying with the manufacturer/remanufacturer's specifications for such fluids when operating the locomotives. This requirement applies without regard to whether misfueling permanently disables the emission controls.  For locomotives certified on ultra-low sulfur diesel fuel, but that do not include sulfur sensitive emission controls, you may use low sulfur diesel fuel instead of ultra-low sulfur diesel fuel, consistent with good engineering judgment. The following additional provisions apply for locomotives equipped with SCR systems requiring the use of urea or other reductants:

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Subpart J -- Definitions and Other Reference Information
--------------------------------------------------------------------------------

52. --------------------------------------------------------------------------------
Section 1033.901 is amended by revising the definitions for "Designated Compliance Officer", "Remanufacture system or remanufacturing system", and "Total hydrocarbon equivalent" and adding definitions for "Dual-fuel" and "Flexible-fuel" to read as follows:
--------------------------------------------------------------------------------
§ 1033.901 Definitions.
--------------------------------------------------------------------------------
*	*	*	*	*
--------------------------------------------------------------------------------
Designated Compliance Officer means the Director, Diesel Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov.
--------------------------------------------------------------------------------
*	*	*	*	*
Dual-fuel means relating to a locomotive designed for operation on two different fuels but not on a continuous mixture of those fuels.  For purposes of this part, such a locomotive remains a dual-fuel locomotive even if it is designed for operation on three or more different fuels.
--------------------------------------------------------------------------------
*	*	*	*	*
Flexible-fuel means relating to a locomotive designed for operation on any mixture of two or more different fuels.
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*	*	*	*	*
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Remanufacture system or remanufacturing system means all components (or specifications for components) and instructions necessary to remanufacture a locomotive or locomotive engine in accordance with applicable requirements of this part.
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*	*	*	*	*
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Total hydrocarbon equivalent has the meaning given in 40 CFR 1065.1001. This generally means the sum of the carbon mass contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, or other organic compounds that are measured separately as contained in a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled locomotives. The atomic hydrogen-to-carbon ratio of the equivalent hydrocarbon is 1.85:1.
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*	*	*	*	*
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53. Section 1033.915 is revised to read as follows:
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§ 1033.915 Confidential information.
--------------------------------------------------------------------------------
The provisions of 40 CFR 1068.10 apply for information you consider confidential.
--------------------------------------------------------------------------------

54. Section 1033.925 is revised to read as follows:
--------------------------------------------------------------------------------
§ 1033.925 Reporting and recordkeeping requirements.
(a) This part includes various requirements to submit and record data or other information. Unless we specify otherwise, store required records in any format and on any media and keep them readily available for eight years after you send an associated application for certification, or eight years after you generate the data if they do not support an application for certification.  You are expected to keep your own copy of required records rather than relying on someone else to keep records on your behalf.  We may review these records at any time.  You must promptly send us organized, written records in English if we ask for them.  We may require you to submit written records in an electronic format.  
(b) The regulations in §1033.255, 40 CFR 1068.25, and 40 CFR 1068.101 describe your obligation to report truthful and complete information.  This includes information not related to certification. Failing to properly report information and keep the records we specify violates 40 CFR 1068.101(a)(2), which may involve civil or criminal penalties.
(c) Send all reports and requests for approval to the Designated Compliance Officer (see §1033.801).
(d) Any written information we require you to send to or receive from another company is deemed to be a required record under this section.  Such records are also deemed to be submissions to EPA.  We may require you to send us these records whether or not you are a certificate holder.
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(e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq. ), the Office of Management and Budget approves the reporting and recordkeeping specified in the applicable regulations. Failing to properly report information and keep the records we specify violates 40 CFR 1068.101(a)(2), which may involve civil or criminal penalties. The following items illustrate the kind of reporting and recordkeeping we require for locomotives regulated under this part:
--------------------------------------------------------------------------------
(1) We specify the following requirements related to locomotive certification in this part 1033:
--------------------------------------------------------------------------------
   (i) In §1033.150 we state the requirements for interim provisions.
--------------------------------------------------------------------------------
   (ii) In subpart C of this part we identify a wide range of information required to certify engines.
--------------------------------------------------------------------------------
   (iii) In §1033.325 we specify certain records related to production-line testing.
--------------------------------------------------------------------------------
   (iv) In subpart G of this part we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various special compliance provisions.
--------------------------------------------------------------------------------
   (v) In §§1033.725, 1033.730, and 1033.735 we specify certain records related to averaging, banking, and trading.
--------------------------------------------------------------------------------
   (vi) In subpart I of this part we specify certain records related to meeting requirements for remanufactured engines.
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(2) We specify the following requirements related to testing in 40 CFR part 1065:
--------------------------------------------------------------------------------
   (i) In 40 CFR 1065.2 we give an overview of principles for reporting information.
--------------------------------------------------------------------------------
   (ii) In 40 CFR 1065.10 and 1065.12 we specify information needs for establishing various changes to published test procedures.
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   (iii) In 40 CFR 1065.25 we establish basic guidelines for storing test information.
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   (iv) In 40 CFR 1065.695 we identify the specific information and data items to record when measuring emissions.
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(3) We specify the following requirements related to the general compliance provisions in 40 CFR part 1068:
--------------------------------------------------------------------------------
   (i) In 40 CFR 1068.5 we establish a process for evaluating good engineering judgment related to testing and certification.
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   (ii) In 40 CFR 1068.25 we describe general provisions related to sending and keeping information.
--------------------------------------------------------------------------------
   (iii) In 40 CFR 1068.27 we require manufacturers to make locomotives available for our testing or inspection if we make such a request.
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   (iv) In 40 CFR part 1068, subpart C, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various exemptions.
--------------------------------------------------------------------------------
   (v) In 40 CFR part 1068, subpart D, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to importing locomotives and engines.
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   (vi) In 40 CFR 1068.450 and 1068.455 we specify certain records related to testing production-line locomotives in a selective enforcement audit.
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   (vii) In 40 CFR 1068.501 we specify certain records related to investigating and reporting emission-related defects.
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   (viii) In 40 CFR 1068.525 and 1068.530 we specify certain records related to recalling nonconforming locomotives.

55. A new Appendix I is added to part 1033 to read as follows:
Appendix I to Part 1033 -- Original Standards for Tier 0, Tier 1 and Tier 2 Locomotives
(a) The following emission standards applied for new locomotives not yet subject to this part 1033:
                               Type of standard
                         Year of original manufacture
                                     Tier
                             Standards (g/bhp-hr)


                                       
                                      NOx
                                 PM - primary
                               PM - alternate[a]
                                   Line-haul
                                   1973-1992
                                    Tier 0
                                      9.5
                                     0.60
                                     0.30
                                       
                                  1993 -2004
                                    Tier 1
                                      7.4
                                     0.45
                                     0.22
                                       
                                   2005-2011
                                    Tier 2
                                      5.5
                                     0.20
                                     0.10
                                    Switch
                                   1973-1992
                                    Tier 0
                                     14.0
                                     0.72
                                     0.36
                                       
                                  1993 -2004
                                    Tier 1
                                     11.0
                                     0.54
                                     0.27
                                       
                                   2005-2011
                                    Tier 2
                                      8.1
                                     0.24
                                     0.12
[a] Locomotives certified to the alternate PM standards are also subject to alternate CO standards of 10.0 for the line-haul cycle and 12.0 for the switch cycle.

(b) The original Tier 0, Tier 1, and Tier 2 standards for HC and CO emissions and smoke are the same standards identified in §1033.101.

56. Part 1036 is revised to read as follows:

PART 1036--CONTROL OF EMISSIONS FROM NEW AND IN-USE HEAVY-DUTY HIGHWAY ENGINES

Subpart A -- Overview and Applicability
1036.1  Does this part apply for my engines?
1036.2  Who is responsible for compliance?
1036.5  Which engines are excluded from this part's requirements?
1036.10  How is this part organized?
1036.15  Do any other regulation parts apply to me?
1036.30 Submission of information.

Subpart B -- Emission Standards and Related Requirements 
1036.100  Overview of exhaust emission standards.
1036.108  Greenhouse gas emission standards.
1036.115  Other requirements.
1036.130  Installation instructions for vehicle manufacturers.
1036.135  Labeling.
1036.140  Primary intended service class.
1036.150  Interim provisions. 

Subpart C -- Certifying Engine Families
1036.205  What must I include in my application?
1036.210  Preliminary approval before certification.
1036.225  Amending my application for certification.
1036.230  Selecting engine families.
1036.235  Testing requirements for certification.
1036.241  Demonstrating compliance with greenhouse gas standards.
1036.250  Reporting and recordkeeping for certification. 
1036.255  What decisions may EPA make regarding my certificate of conformity?

Subpart D -- [Reserved]

Subpart E -- In-use Testing
1036.401  In-use testing. 

Subpart F -- Test Procedures
1036.501  How do I run a valid emission test?
1036.525  Hybrid engines. 
1036.530  Calculating greenhouse gas emission rates.
1036.535  Engine fuel mapping and idle emission determination.

Subpart G -- Special Compliance Provisions
1036.601  What compliance provisions apply to these engines?
1036.610  Innovative technology credits and adjustments for reducing greenhouse gas emissions.
1036.615  Engines with Rankine cycle waste heat recovery and hybrid powertrains.
1036.620  Alternate CO2 standards based on model year 2011 compression-ignition engines.
1036.625  In-use compliance with family emission limits (FELs).

Subpart H -- Averaging, Banking, and Trading for Certification
1036.701  General provisions.
1036.705  Generating and calculating emission credits.
1036.710  Averaging.
1036.715  Banking.
1036.720  Trading.
1036.725  What must I include in my application for certification?
1036.730  ABT reports.
1036.735  Recordkeeping.
1036.740  Restrictions for using emission credits.
1036.745  End-of-year CO2 credit deficits.
1036.750  What can happen if I do not comply with the provisions of this subpart?
1036.755  Information provided to the Department of Transportation.

Subpart I -- Definitions and Other Reference Information
1036.801  Definitions.
1036.805  Symbols, acronyms, and abbreviations.
1036.810  Incorporation by reference.
1036.815  Confidential information.
1036.820  Requesting a hearing.
1036.825  Reporting and recordkeeping requirements.

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


Subpart A -- Overview and Applicability
§ 1036.1  Does this part apply for my engines?
(a) Except as specified in §1036.5, the provisions of this part apply  for engines that will be installed in heavy-duty vehicles above 14,000 pounds GVWR.  These provisions also apply for engines that will be installed in incomplete heavy-duty vehicles at or below 14,000 pounds GVWR unless the engine is installed in a vehicle that is covered by a certificate of conformity under 40 CFR part 86, subpart S.  
(b) This part does not apply with respect to exhaust emission standards for HC, CO, NOX, or PM except that the provisions of §1036.601 apply. 
(c) The provisions of this part also apply for fuel conversions of all engines described in paragraph (a) of this section as described in 40 CFR 85.502.
(d) Gas turbine engines and other engines not meeting the definition compression-ignition or spark-ignition are deemed to be compression-ignition engines for purposes of this part.

§ 1036.2  Who is responsible for compliance?
The regulations in this part 1036 contain provisions that affect both engine manufacturers and others. However, the requirements of this part are generally addressed to the engine manufacturer(s). The term "you" generally means the engine manufacturer(s), especially for issues related to certification.  Additional requirements and prohibitions apply to other persons as specified in §1036.601 and 40 CFR part 1068.

§ 1036.5  Which engines are excluded from this part's requirements? 
(a) The provisions of this part do not apply to engines used in medium-duty passenger vehicles  or other heavy-duty vehicles that are subject to regulation under 40 CFR part 86, subpart S, except as specified in 40 CFR part 86, subpart S, and §1036.108(a)(4).  For example, this exclusion applies for engines used in vehicles certified to the standards of 40 CFR 86.1819.
(b) An engine installed in a heavy-duty vehicle that is not used to propel the vehicle is not a heavy-duty engine.  The provisions of this part therefore do not apply to these engines.  See 40 CFR part 1039, 1048, or 1054 for other requirements that apply for these auxiliary engines.  See 40 CFR part 1037 for requirements that may apply for vehicles using these engines, such as the evaporative emission requirements of 40 CFR 1037.103.
(c) The provisions of this part do not apply to aircraft or aircraft engines.  Standards apply separately to certain aircraft engines, as described in 40 CFR part 87.
(d) The provisions of this part do not apply to engines that are not internal combustion engines.  For example, the provisions of this part do not apply to fuel cells.
(e) The provisions of this part do not apply for model year 2013 and earlier heavy-duty engines.

§ 1036.10  How is this part organized? 
This part 1036 is divided into the following subparts:
(a) Subpart A of this part defines the applicability of this part 1036 and gives an overview of regulatory requirements.
(b) Subpart B of this part describes the emission standards and other requirements that must be met to certify engines under this part.  Note that §1036.150 describes certain interim requirements and compliance provisions that apply only for a limited time.
(c) Subpart C of this part describes how to apply for a certificate of conformity.
(d) [Reserved]
(e) Subpart E of this part describes provisions for testing in-use engines.
(f) Subpart F of this part describes how to test your engines (including references to other parts of the Code of Federal Regulations). 
(g) Subpart G of this part describes requirements, prohibitions, and other provisions that apply to engine manufacturers, vehicle manufacturers, owners, operators, rebuilders, and all others.
(h) Subpart H of this part describes how you may generate and use emission credits to certify your engines.
(i) Subpart I of this part contains definitions and other reference information.

§ 1036.15  Do any other regulation parts apply to me? 
(a) Part 86 of this chapter describes additional requirements that apply to engines that are subject to this part 1036.  This part extensively references portions of 40 CFR part 86. For example, the regulations of part 86 specify emission standards and certification procedures related to criteria pollutants.
(b) Part 1037 of this chapter describes requirements for controlling evaporative emissions and greenhouse gas emissions from heavy-duty vehicles, whether or not they use engines certified under this part.  It also includes standards and requirements that apply instead of the standards and requirements of this part in some cases.
(c) Part 1065 of this chapter describes procedures and equipment specifications for testing engines to measure exhaust emissions.  Subpart F of this part 1036 describes how to apply the provisions of part 1065 of this chapter to determine whether engines meet the exhaust emission standards in this part.
(d) Certain provisions of part 1068 of this chapter apply as specified in §1036.601 to everyone, including anyone who manufactures, imports, installs, owns, operates, or rebuilds any of the engines subject to this part 1036, or vehicles containing these engines.  Part 1068 of this chapter describes general provisions that apply broadly, but do not necessarily apply for all engines or all persons.  See §1036.601 to determine how to apply the part 1068 regulations for heavy-duty engines.  The issues addressed by these provisions include these seven areas:
   (1) Prohibited acts and penalties for engine manufacturers, vehicle manufacturers, and others.
	(2) Rebuilding and other aftermarket changes.
	(3) Exclusions and exemptions for certain engines.
	(4) Importing engines.
	(5) Selective enforcement audits of your production.
	(6) Recall.
	(7) Procedures for hearings.
(e) Other parts of this chapter apply if referenced in this part. 

§ 1036.30  Submission of information.
Send all reports and requests for approval to the Designated Compliance Officer (see §1036.801). See §1036.825 for additional reporting and recordkeeping provisions.

Subpart B -- Emission Standards and Related Requirements 
§ 1036.100  Overview of exhaust emission standards.
Engines used in vehicles certified to the applicable chassis standards for greenhouse gasesdescribed in 40 CFR 86.1819 are not subject to the standards specified in this part. All other engines subject to this part must meet the greenhouse gas standards in §1036.108 in addition to the criteria pollutant standards of 40 CFR part 86.

§ 1036.108  Greenhouse gas emission standards. 
This section contains standards and other regulations applicable to the emission of the air pollutant defined as the aggregate group of six greenhouse gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perfluorocarbons, and sulfur hexafluoride.  This section describes the applicable CO2, N2O, and CH4 standards for engines.  Except as specified in paragraph (a)(4) of this section, these standards do not apply for engines used in vehicles subject to (or voluntarily certified to) the CO2, N2O, and CH4 standards for vehicles specified in 40 CFR 86.1819.
(a) Emission standards. Emission standards apply for engines measured using the test procedures specified in subpart F of this part as follows:  
   (1) CO2 emission standards apply as specified in this paragraph (a)(1).  The applicable test cycle for measuring CO2 emissions differs depending on the engine family's primary intended service class and the extent to which the engines will be (or were designed to be) used in tractors.  For medium and heavy heavy-duty engines certified as tractor engines, measure CO2 emissions using the steady-state duty cycle specified in 40 CFR 86.1362 (referred to as the ramped-modal cycle, or RMC).  This is intended for engines designed to be used primarily in tractors and other line-haul applications.  Note that the use of some RMC-certified tractor engines in vocational applications does not affect your certification obligation under this paragraph (a)(1); see other provisions of this part and 40 CFR part 1037 for limits on using engines certified to only one cycle.  For medium and heavy heavy-duty engines certified as both tractor and vocational engines, measure CO2 emissions using the steady-state duty cycle and the transient duty cycle (sometimes referred to as the FTP engine cycle), both of which are specified in 40 CFR part 86, subpart N.  This is intended for engines that are designed for use in both tractor and vocational applications.  For all other engines (including all spark-ignition engines), measure CO2 emissions using the appropriate transient duty cycle specified in 40 CFR part 86, subpart N.
      (i) The CO2 standard for model year 2016 and later spark-ignition engines is 627 g/hp-hr.
      (ii) The following CO2 standards apply for compression-ignition engines, including engines that are deemed to be compression-ignition engines under §1036.1 (in g/hp-hr):
                                  Model Years
                               Light Heavy-Duty
                        Medium Heavy-Duty  - Vocational
                        Heavy Heavy-Duty  - Vocational
                         Medium Heavy-Duty  - Tractor
                         Heavy Heavy-Duty  -  Tractor
2014-2016
                                      600
                                      600
                                      567
                                      502
                                      475
2017-2020
                                      576
                                      576
                                      555
                                      487
                                      460
2021-2023
                                      565
                                      565
                                      544
                                      479
                                      453
2024-2026
                                      556
                                      556
                                      536
                                      469
                                      443
2027 and later
                                      553
                                      553
                                      533
                                      466
                                      441

   (2) The CH4 emission standard is 0.10 g/hp-hr when measured over the appropriate transient duty cycle specified in 40 CFR part 86, subpart N.  This standard begins in model year 2014 for compression-ignition engines and in model year 2016 for spark-ignition engines.  Note that this standard applies for all fuel types just as the other standards of this section do. 
   (3) N2O emission standards applies as follows for engines when measured over the appropriate transient duty cycle specified in 40 CFR part 86, subpart N:
      (i) An emission standard of 0.05 g/hp-hr applies for model year 2021 and later engines.
      (ii) An emission standard of 0.10 g/hp-hr applies for compression-ignition engines for model years 2014 though 2020.
      (iii) An emission standard of 0.10 g/hp-hr applies for spark-ignition engines for model years 2016 though 2020.
   (4) This paragraph (a)(4) describes alternate emission standards for engines certified under 40 CFR 86.1819(k)(8).  The standards of paragraphs (a)(1) through (3) of this section do not apply for these engines.  The standards in this paragraph (a)(4) apply for emissions measured with the engine installed in a complete vehicle consistent with the provisions of 40 CFR 86.1819(k)(8)(vi).  The CO2 standard for the engines equals the test result specified in 40 CFR 86.1819(k)(8)(vi) multiplied by 1.10 and rounded to the nearest 0.1 g/mile.  The N2O and CH4 standards are both 0.05 g/mile (or any alternate standards that apply to the corresponding vehicle test group).  The only requirements of this part that apply to these engines are those in this paragraph (a)(4) and those in §§1036.115 through 1036.135.
(b) Family certification levels.  You must specify a CO2 Family Certification Level (FCL) for each engine family.  The FCL may not be less than the certified emission level for the engine family.  The CO2 Family Emission Limit (FEL) for the engine family is equal to the FCL multiplied by 1.03.  
(c) Averaging, banking, and trading.  You may generate or use emission credits under the averaging, banking, and trading (ABT) program described in subpart H of this part for demonstrating compliance with CO2 emission standards.  Credits (positive and negative) are calculated from the difference between the FCL and the applicable emission standard.  As described in §1036.705, you may use CO2 credits to certify your engine families to FELs for N2O and/or CH4, instead of the N2O/CH4 standards of this section that otherwise apply.  Except as specified in §§1036.150 and 1036.705, you may not generate or use credits for N2O or CH4 emissions. 
(d) Useful life. Your engines must meet the exhaust emission standards of this section throughout their full useful life, expressed in service miles, operating hours, or calendar years, whichever comes first.  The useful life values applicable to the criteria pollutant standards of 40 CFR part 86 apply for the standards of this section, except that model year 2021 and later spark-ignition engines and light heavy-duty compression-ignition engines are subject to the standards of this section over a useful life of 15 years or 150,000 miles, whichever comes first.
(e) Applicability for testing. The emission standards in this subpart apply as specified in this paragraph (e) to all duty-cycle testing (according to the applicable test cycles) of testable configurations, including certification, selective enforcement audits, and in-use testing.  The CO2 FCLs serve as the CO2 emission standards for the engine family with respect to certification and confirmatory testing instead of the standards specified in paragraph (a)(1) of this section.  The FELs serve as the emission standards for the engine family with respect to all other testing.  See §§1036.235 and 1036.241 to determine which engine configurations within the engine family are subject to testing. 
(f) Multi-fuel engines.  For dual-fuel, multi-fuel, and flexible-fuel engines, perform exhaust testing on each fuel type (for example, gasoline and E85).  
   (1) This paragraph (f)(1) applies where you demonstrate the relative amount of each fuel type that your engines consume in actual use.  Based on your demonstration, we will specify a weighting factor and allow you to submit the weighted average of your emission results.  For example, if you certify an E85 flexible-fuel engine and we determine the engine will produce one-half of its work from E85 and one-half of its work from gasoline, you may apply a 50 % weighting factor to each of your E85 and gasoline emission results.
   (2) If you certify your engine family to N2O and/or CH4 FELs the FELs apply for testing on all fuel types for which your engine is designed, to the same extent as criteria emission standards apply.

§ 1036.115  Other requirements. 
(a) The warranty and maintenance requirements, adjustable parameter provisions, and defeat device prohibition of 40 CFR part 86 apply with respect to the standards of this part. 
(b) You must create a fuel map and establish idle-specific fuel-consumption values for your engine as described in §1036.535.  You may alternatively perform powertrain testing as specified in 40 CFR 1037.550 for some or all of your configurations within the engine family.
(c) You must design and produce your engines to comply with evaporative emission standards as follows:
   (1) For complete heavy-duty vehicles you produce, you must certify the vehicles to emission standards as specified in 40 CFR 1037.103.
   (2) For incomplete heavy-duty vehicles, and for engines used in vehicles you do not produce, you do not need to certify your engines to evaporative emission standards or otherwise meet those standards.  However, vehicle manufacturers certifying their vehicles with your engines may depend on you to produce your engines according to their specifications.  Also, your engines must meet applicable exhaust emission standards in the installed configuration.

§ 1036.130  Installation instructions for vehicle manufacturers. 
(a) If you sell an engine for someone else to install in a vehicle, give the engine installer instructions for installing it consistent with the requirements of this part.  Include all information necessary to ensure that an engine will be installed in its certified configuration.
(b) Make sure these instructions have the following information:
	(1) Include the heading: "Emission-related installation instructions".
   (2) State: "Failing to follow these instructions when installing a certified engine in a heavy-duty motor vehicle violates federal law, subject to fines or other penalties as described in the Clean Air Act."
   (3) Provide all instructions needed to properly install the exhaust system and any other components.
   (4) Describe any necessary steps for installing any diagnostic system required under 40 CFR part 86.
   (5) Describe how your certification is limited for any type of application.  For example, if you certify heavy heavy-duty engines to the CO2 standards using only steady-state testing, you must make clear that the engine may be installed only in tractors.  
   (6) Describe any other instructions to make sure the installed engine will operate according to design specifications in your application for certification.  This may include, for example, instructions for installing aftertreatment devices when installing the engines.
   (7) State: "If you install the engine in a way that makes the engine's emission control information label hard to read during normal engine maintenance, you must place a duplicate label on the vehicle, as described in 40 CFR 1068.105."
(c) Give the vehicle manufacturer fuel map results as described in §1036.535 or powertrain results as described in 40 CFR 1037.550 for each engine configuration, as appropriate.
(d) You do not need installation instructions for engines that you install in your own vehicles. 
(e) Provide instructions in writing or in an equivalent format.  For example, you may post instructions on a publicly available website for downloading or printing.  If you do not provide the instructions in writing, explain in your application for certification how you will ensure that each installer is informed of the installation requirements. 

§ 1036.135  Labeling. 
Label your engines as described in 40 CFR 86.007-35(a)(3), with the following additional information:
(a) [Reserved]
(b) Identify the emission control system. Use terms and abbreviations as described in 40 CFR 1068.45 or other applicable conventions.
(c) Identify any limitations on your certification. For example, if you certify heavy heavy-duty engines to the CO2 standards using only transient cycle testing, include the statement "VOCATIONAL VEHICLES ONLY".

(d) You may ask us to approve modified labeling requirements in this part 1036 if you show that it is necessary or appropriate. We will approve your request if your alternate label is consistent with the requirements of this part. We may also specify modified labeling requirement to be consistent with the intent of 40 CFR part 1037.
   
§ 1036.140  Primary intended service class and engine cycle. 
(a) You must identify a single primary intended service class for each engine family.  Select the class that best describes vehicles for which you design and market the engine.  There are three primary intended service classes for vehicles with engines that are not gasoline-fueled: light heavy-duty, medium heavy-duty, and heavy heavy-duty.    Unless otherwise specified, engines that qualify as medium heavy-duty or heavy heavy-duty engines and do not operate on gasoline must meet all the emission standards and other requirements of this part that apply for compression-ignition engines, even if they qualify under the definitions as spark-ignition engines.  Also, spark-ignition engines that qualify as light heavy-duty engines must meet all the emission standards and other requirements of this part that apply for spark-ignition engines, regardless of fuel.  These spark-ignition light-heavy-duty engines and all sizes of gasoline-fueled heavy-duty engines together form a separate primary intended service class.
(b) Divide engines operating on any fuel other than gasoline into primary intended service classes based on the following engine and vehicle characteristics:
   (1) Light heavy-duty engines usually are not designed for rebuild and do not have cylinder liners. Vehicle body types in this group might include any heavy-duty vehicle built from a light-duty truck chassis, van trucks, multi-stop vans, motor homes and other recreational vehicles, and some straight trucks with a single rear axle. Typical applications would include personal transportation, light-load commercial delivery, passenger service, agriculture, and construction. The GVWR of these vehicles is normally below 19,500 pounds.
   (2) Medium heavy-duty engines may be designed for rebuild and may have cylinder liners. Vehicle body types in this group would typically include school buses, straight trucks with dual rear axles, city tractors, and a variety of special purpose vehicles such as small dump trucks, and refuse trucks. Typical applications would include commercial short haul and intra-city delivery and pickup. Engines in this group are normally used in vehicles whose GVWR ranges from 19,500 to 33,000 pounds.
   (3) Heavy heavy-duty engines are designed for multiple rebuilds and have cylinder liners. Vehicles in this group are normally tractors, trucks, and buses used in inter-city, long-haul applications. These vehicles normally exceed 33,000 pounds GVWR.

§ 1036.150  Interim provisions. 
The provisions in this section apply instead of other provisions in this part.  
(a) Early banking of greenhouse gas emissions. You may generate CO2 emission credits for engines you certify in model year 2013 (2015 for spark-ignition engines) to the standards of §1036.108.  
   (1) Except as specified in paragraph (a)(2) of this section, to generate early credits, you must certify your entire U.S.-directed production volume within that averaging set to these standards.  This means that you may not generate early credits while you produce engines in the averaging set that are certified to the criteria pollutant standards but not to the greenhouse gas standards. Calculate emission credits as described in subpart H of this part relative to the standard that would apply for model year 2014 (2016 for spark-ignition engines).  
   (2) You may generate early credits for an individual compression-ignition engine family where you demonstrate that you have improved a model year 2013 engine model's CO2 emissions relative to its 2012 baseline level and certify it to an FCL below the applicable standard.  Calculate emission credits as described in subpart H of this part relative to the lesser of the standard that would apply for model year 2014 engines or the baseline engine's CO2 emission rate.  Use the smaller U.S.-directed production volume of the 2013 engine family or the 2012 baseline engine family.  We will not allow you to generate emission credits under this paragraph (a)(2) unless we determine that your 2013 engine is the same engine as the 2012 baseline or that it replaces it.
   (3) You may bank credits equal to the surplus credits you generate under this paragraph (a) multiplied by 1.50.  For example, if you have 10 Mg of surplus credits for model year 2013, you may bank 15 Mg of credits.  Credit deficits for an averaging set prior to model year 2014 (2016 for spark-ignition engines) do not carry over to model year 2014 (2016 for spark-ignition engines).  We recommend that you notify us of your intent to use this provision before submitting your applications.
(b) Model year 2014 N2O standards.  In model year 2014 and earlier, manufacturers may show compliance with the N2O standards using an engineering analysis.  This allowance also applies for later families certified using carryover CO2 data from model 2014 consistent with §1036.235(d).
(c) Engine cycle classification.  Through model year 2020, engines meeting the definition of spark-ignition, but regulated as diesel engines under 40 CFR part 86, must be certified to the requirements applicable to compression-ignition engines under this part.  Such engines are deemed to be compression-ignition engines for purposes of this part.  Similarly, engines meeting the definition of compression-ignition, but regulated as Otto-cycle under 40 CFR part 86 must be certified to the requirements applicable to spark-ignition engines under this part.  Such engines are deemed to be spark-ignition engines for purposes of this part. See §1036.140 for provisions that apply for model year 2021 and later.  
(d) Small manufacturers. Standards apply on a delayed schedule for manufacturers meeting the small business criteria specified in 13 CFR 121.201.  Apply the small business criteria for NAICS code 336310 for engine manufacturers and 811198 for companies performing fuel conversions with engines manufactured by a different company.  Qualifying manufacturers are not subject to the greenhouse gas emission standards in § 1036.108 for engines built before January 1, 2022.  In addition, qualifying manufacturers producing engines that run on any fuel other than gasoline, E85, or diesel fuel may delay complying with every new standard under this part by one model year.
(e) Alternate phase-in standards.  Where a manufacturer certifies all of its model year 2013 compression-ignition engines within a given primary intended service class to the applicable alternate standards of this paragraph (e), its compression-ignition engines within that primary intended service class are subject to the standards of this paragraph (e) for model years 2013 through 2016.  This means that once a manufacturer chooses to certify a primary intended service class to the standards of this paragraph (e), it is not allowed to opt out of these standards.  Engines certified to these standards are not eligible for early credits under paragraph (a) of this section.
Tractors
LHD Engines
MHD Engines
HHD Engines
Model Years 2013-2015
NA
512 g/hp-hr
485 g/hp-hr
Model Years 2016 and later[a]
NA
487 g/hp-hr
460 g/hp-hr
Vocational 
LHD Engines
MHD Engines
HHD Engines
Model Years 2013-2015
618 g/hp-hr
618 g/hp-hr
577 g/hp-hr
Model Years 2016 and later[a]
576 g/hp-hr
576 g/hp-hr
 555 g/hp-hr
a Note: these alternate standards for 2016 and later are the same as the otherwise applicable standards for 2017 and later.

(f) Separate OBD families.  This paragraph (f) applies where you separately certify engines for the purpose of applying OBD requirements (for engines used in vehicles under 14,000 pounds GVWR) from non-OBD engines that could be certified as a single engine family.  You may treat the two engine families as a single engine family in certain respects for the purpose of this part, as follows:
   (1) This paragraph (f) applies only where the two families are identical in all respects except for the engine ratings offered and the inclusion of OBD.
   (2) For purposes of this part and 40 CFR part 86, the two families remain two separate families except for the following:
      (i) Specify the testable configurations of the non-OBD engine family as the testable configurations for the OBD family.
      (ii) Submit the same CO2, N2O, and CH4 emission data for both engine families. 
(g)  Assigned deterioration factors.  You may use assigned deterioration factors (DFs) without performing your own durability emission tests or engineering analysis as follows:
   (1) You may use an assigned additive DF of 0.0 g/hp-hr for CO2 emissions from engines that do not use advanced or innovative technologies.  If we determine it to be consistent with good engineering judgment, we may allow you to use an assigned additive DF of 0.0 g/hp-hr for CO2 emissions from your engines with advanced or innovative technologies.  
   (2) You may use an assigned additive DF of 0.020 g/hp-hr for N2O emissions from any engine through model year 2020, and 0.010 g/hp-hr for later model years.  
   (3) You may use an assigned additive DF of 0.020 g/hp-hr for CH4 emissions from any engine.
(h) Advanced technology credits.  If you generate credits from model year 2020 and earlier engines certified for advanced technology you may multiply these credits by 1.5, except that you may not apply this multiplier and the early-credit multiplier of paragraph (a) of this section.
(i) CO2 credits for low N2O emissions.  If you certify your model year 2014, 2015, or 2016 engines to an N2O FEL less than 0.04 g/hp-hr (provided you measure N2O emissions from your emission-data engines), you may generate additional CO2 credits under this paragraph (i).  Calculate the additional CO2 credits from the following equation instead of the equation in §1036.705:
   CO2 Credits (Mg) = (0.04  -  FELN2O) · (CF) · (Volume) · (UL) · (10[-6]) · (298)
(j) ABT reports. Through model year 2017, you may submit a final report under §1036.730 up to 270 days after the end of the model year, as long as you send a draft report with the same information within 90 days after the end of the model year.
(k) Credit adjustment for spark-ignition engines and light heavy-duty compression-ignition engines.  For emission credits generated from model year 2020 and earlier spark-ignition engines and light heavy-duty compression-ignition engines, multiply any banked credits that you carry forward to demonstrate compliance with later standards by 1.36.
(l) Assigned deterioration factor. You may use an assigned additive DF of 0.020 g/hp-hr for N2O emissions for any engine from model year 2020 or earlier.  
(m) Infrequent regeneration. For model year 2020 and earlier, you may invalidate any test interval with respect to CO2 measurements if an infrequent regeneration event occurs during the test interval.
(n) You must supply vehicle manufacturers with fuel maps as described in §1036.130 for model year 2020 engines.

Subpart C -- Certifying Engine Families

§ 1036.205  What must I include in my application? 
Submit an application for certification as described in 40 CFR 86.007-21, with the following additional information:
(a) Describe the engine family's specifications and other basic parameters of the engine's design and emission controls with respect to compliance with the requirements of this part. Describe in detail all system components for controlling greenhouse gas emissions, including all auxiliary emission control devices (AECDs) and all fuel-system components you will install on any production or test engine. Identify the part number of each component you describe. For this paragraph (a), treat as separate AECDs any devices that modulate or activate differently from each other.
(b) Describe any test equipment and procedures that you used if you performed any tests that did not also involve measurement of criteria pollutants. Describe any special or alternate test procedures you used (see 40 CFR 1065.10(c)).
(c) Include the emission-related installation instructions you will provide if someone else installs your engines in their vehicles (see §1036.130).
(d) Describe the label information specified in §1036.135. We may require you to include a copy of the label.
(e) Identify the CO2 FCLs with which you are certifying engines in the engine family; also identify any FELs that apply for CH4 and N2O. The actual U.S.-directed production volume of configurations that have CO2 emission rates at or below the FCL and CH4 and N2O emission rates at or below the applicable standards or FELs must be at least one percent of your actual (not projected) U.S.-directed production volume for the engine family. Identify configurations within the family that have emission rates at or below the FCL and meet the one percent requirement. For example, if your U.S.-directed production volume for the engine family is 10,583 and the U.S.-directed production volume for the tested rating is 75 engines, then you can comply with this provision by setting your FCL so that one more rating with a U.S.-directed production volume of at least 31 engines meets the FCL. Where applicable, also identify other testable configurations required under §1036.230(b)(2).
(f) Identify the engine family's deterioration factors and describe how you developed them (see §1036.241). Present any test data you used for this.
(g) Present emission data to show that you meet emission standards, as follows:
    (1) Present exhaust emission data for CO2, CH4, and N2O on an emission-data engine to show that your engines meet the applicable emission standards we specify in §1036.108. Show emission figures before and after applying deterioration factors for each engine. In addition to the composite results, show individual measurements for cold-start testing and hot-start testing over the transient test cycle.
    (2) Note that §1036.235 allows you to submit an application in certain cases without new emission data.
(h) State whether your certification is limited for certain engines. For example, if you certify heavy heavy-duty engines to the CO2 standards using only transient testing, the engines may be installed only in vocational vehicles.
(i) Unconditionally certify that all the engines in the engine family comply with the requirements of this part, other referenced parts of the CFR, and the Clean Air Act. Note that §1036.235 specifies which engines to test to show that engines in the entire family comply with the requirements of this part.
(j) Include the information required by other subparts of this part. For example, include the information required by §1036.725 if you participate in the ABT program.
(k) Include the warranty statement and maintenance instructions if we request them.
(l) Include other applicable information, such as information specified in this part or 40 CFR part 1068 related to requests for exemptions.  
(m) For imported engines or equipment, identify the following:
    (1) Describe your normal practice for importing engines. For example, this may include identifying the names and addresses of any agents you have authorized to import your engines. Engines imported by nonauthorized agents are not covered by your certificate.
    (2) The location of a test facility in the United States where you can test your engines if we select them for testing under a selective enforcement audit, as specified in 40 CFR part 1068, subpart E. 
(n) Include information needed to certify vehicles to GHG standards under 40 CFR part 1037, as follows:
    (1) Identify the the engine parameters used for GEM modeling as described in §1037.520.  
    (2) Report measured NOx emission levels corresponding to each point of the fuel map and at each measured idle point as described in §1036.535.
    (3) State whether your application is intended to cover engine emissions measured during powertrain testing under 40 CFR 1037.550 and include any associated test results and powertrain information. 

§ 1036.210  Preliminary approval before certification. 
If you send us information before you finish the application, we may review it and make any appropriate determinations, especially for questions related to engine family definitions, auxiliary emission control devices, adjustable parameters, deterioration factors, testing for service accumulation, and maintenance. Decisions made under this section are considered to be preliminary approval, subject to final review and approval. We will generally not reverse a decision where we have given you preliminary approval, unless we find new information supporting a different decision. If you request preliminary approval related to the upcoming model year or the model year after that, we will make best-efforts to make the appropriate determinations as soon as practicable. We will generally not provide preliminary approval related to a future model year more than two years ahead of time.

§ 1036.225  Amending my application for certification. 
Before we issue you a certificate of conformity, you may amend your application to include new or modified engine configurations, subject to the provisions of this section. After we have issued your certificate of conformity, but before the end of the model year, you may send us an amended application requesting that we include new or modified engine configurations within the scope of the certificate, subject to the provisions of this section. You must amend your application if any changes occur with respect to any information that is included or should be included in your application.
 (a) You must amend your application before you take any of the following actions:
   (1) Add an engine configuration to an engine family.  In this case, the engine configuration added must be consistent with other engine configurations in the engine family with respect to the criteria listed in §1036.230.
   (2) Change an engine configuration already included in an engine family in a way that may affect emissions, or change any of the components you described in your application for certification.  This includes production and design changes that may affect emissions any time during the engine's lifetime.
   (3) Modify an FEL and FCL for an engine family as described in paragraph (f) of this section.  
(b) To amend your application for certification, send the relevant information to the Designated Compliance Officer.
   (1) Describe in detail the addition or change in the engine model or configuration you intend to make.
   (2) Include engineering evaluations or data showing that the amended engine family complies with all applicable requirements.  You may do this by showing that the original emission-data engine is still appropriate for showing that the amended family complies with all applicable requirements.
   (3) If the original emission-data engine for the engine family is not appropriate to show compliance for the new or modified engine configuration, include new test data showing that the new or modified engine configuration meets the requirements of this part. 
   (4) Include any other information needed to make your application correct and complete.
(c) We may ask for more test data or engineering evaluations.  You must give us these within 30 days after we request them. 
(d) For engine families already covered by a certificate of conformity, we will determine whether the existing certificate of conformity covers your newly added or modified engine.  You may ask for a hearing if we deny your request (see §1036.820).
(e) For engine families already covered by a certificate of conformity, you may start producing the new or modified engine configuration anytime after you send us your amended application and before we make a decision under paragraph (d) of this section.  However, if we determine that the affected engines do not meet applicable requirements, we will notify you to cease production of the engines and may require you to recall the engines at no expense to the owner.  Choosing to produce engines under this paragraph (e) is deemed to be consent to recall all engines that we determine do not meet applicable emission standards or other requirements and to remedy the nonconformity at no expense to the owner.  If you do not provide information required under paragraph (c) of this section within 30 days after we request it, you must stop producing the new or modified engines.
(f)  You may ask us to approve a change to your FEL in certain cases after the start of production, but before the end of the model year.  If you change an FEL for CO2, your FCL for CO2 is automatically set to your new FEL divided by 1.03.  The changed FEL may not apply to engines you have already introduced into U.S. commerce, except as described in this paragraph (f).  You may ask us to approve a change to your FEL in the following cases:
   (1) You may ask to raise your FEL for your engine family at any time.  In your request, you must show that you will still be able to meet the emission standards as specified in subparts B and H of this part.  Use the appropriate FELs/FCLs with corresponding production volumes to calculate emission credits for the model year, as described in subpart H of this part. 
   (2) You may ask to lower the FEL for your engine family only if you have test data from production engines showing that emissions are below the proposed lower FEL (or below the proposed FCL for CO2).  The lower FEL/FCL applies only to engines you produce after we approve the new FEL/FCL.  Use the appropriate FELs/FCLs with corresponding production volumes to calculate emission credits for the model year, as described in subpart H of this part.
   
§ 1036.230  Selecting engine families. 
See 40 CFR 86.001-24 for instructions on how to divide your product line into families of engines that are expected to have similar emission characteristics throughout the useful life. You must certify your engines to the standards of §1036.108 using the same engine families you use for criteria pollutants under 40 CFR part 86. The following provisions also apply:
(a) Engines certified as hybrid engines may not be included in an engine family with engines with conventional powertrains. Note that this does not prevent you from including engines in a conventional family if they are used in hybrid vehicles, as long as you certify them conventionally.
(b) If you certify engines in the family for use as both vocational and tractor engines, you must split your family into two separate subfamilies. Indicate in the application for certification that the engine family is to be split.
   (1) Calculate emission credits relative to the vocational engine standard for the number of engines sold into vocational applications and relative to the tractor engine standard for the number of engines sold into non-vocational tractor applications. You may assign the numbers and configurations of engines within the respective subfamilies at any time before submitting the final report required by §1036.730. If the family participates in averaging, banking, or trading, you must identify the type of vehicle in which each engine is installed; we may alternatively allow you to use statistical methods to determine this for a fraction of your engines. Keep records to document this determination.
   (2) If you restrict use of the test configuration for your split family to only tractors, or only vocational vehicles, you must identify a second testable configuration for the other type of vehicle (or an unrestricted configuration). Identify this configuration in your application for certification. The FCL for the engine family applies for this configuration as well as the primary test configuration.
(c) If you certify in separate engine families engines that could have been certified in vocational and tractor engine subfamilies in the same engine family, count the two families as one family for purposes of determining your obligations with respect to the OBD requirements and in-use testing requirements of 40 CFR part 86. Indicate in the applications for certification that the two engine families are covered by this paragraph (c).
(d) Engine configurations within an engine family must use equivalent greenhouse gas emission controls. Unless we approve it, you may not produce nontested configurations without the same emission control hardware included on the tested configuration. We will only approve it if you demonstrate that the exclusion of the hardware does not increase greenhouse gas emissions.

§ 1036.235  Testing requirements for certification. 
This section describes the emission testing you must perform to show compliance with the greenhouse gas emission standards in §1036.108.
(a) Select a single emission-data engine from each engine family as specified in 40 CFR part 86. The standards of this part apply only with respect to emissions measured from this tested configuration and other configurations identified in §1036.205(e). Note that configurations identified in §1036.205(e) are considered to be "tested configurations" whether or not you actually tested them for certification. However, you must apply the same (or equivalent) emission controls to all other engine configurations in the engine family.
(b) Test your emission-data engines using the procedures and equipment specified in subpart F of this part.  In the case of dual-fuel and flexible-fuel engines, measure emissions when operating with each type of fuel for which you intend to certify the engine. Measure CO2, CH4, and N2O emissions using the specified duty cycle(s), including cold-start and hot-start testing as specified in 40 CFR part 86, subpart N.  The following provisions apply regarding test cycles for demonstrating compliance with tractor and vocational standards:
   (1) If you are certifying the engine for use in tractors, you must measure CO2 emissions using the ramped-modal cycle and measure CH4, and N2O emissions using the transient cycle.  
   (2) If you are certifying the engine for use in vocational applications, you must measure CO2, CH4, and N2O emissions using the specified transient duty cycle, including cold-start and hot-start testing as specified in 40 CFR part 86, subpart N.  
   (3) You may certify your engine family for both tractor and vocational use by submitting CO2 emission data from both ramped-modal and transient cycle testing and specifying FCLs for both.
   (4) Engines certified for use in tractors may also be used in vocational vehicles; however, you may not knowingly circumvent the intent of this part (to reduce in-use emissions of CO2) by certifying engines designed for vocational vehicles (and rarely used in tractors) to the ramped-modal cycle and not the transient cycle.  For example, we would generally not allow you to certify all your engines to the ramped-modal cycle without certifying any to the transient cycle.  
(c) We may measure emissions from any of your emission-data engines.
   (1) We may decide to do the testing at your plant or any other facility.  If we do this, you must deliver the engine to a test facility we designate.  The engine you provide must include appropriate manifolds, aftertreatment devices, electronic control units, and other emission-related components not normally attached directly to the engine block.  If we do the testing at your plant, you must schedule it as soon as possible and make available the instruments, personnel, and equipment we need.
   (2) If we measure emissions on your engine, the results of that testing become the official emission results for the engine.  Unless we later invalidate these data, we may decide not to consider your data in determining if your engine family meets applicable requirements. This also applies equally to testing for fuel maps under §1036.535 and to engine-based powertrain testing under 40 CFR 1037.550, except that the results of our testing at each test point do not become the official emission result if they are lower than your declared values.  
   (3) Before we test one of your engines, we may set its adjustable parameters to any point within the physically adjustable ranges.
   (4) Before we test one of your engines, we may calibrate it within normal production tolerances for anything we do not consider an adjustable parameter.  For example, this would apply for an engine parameter that is subject to production variability because it is adjustable during production, but is not considered an adjustable parameter (as defined in §1036.801) because it is permanently sealed.
(d) You may ask to use carryover emission data from a previous model year instead of doing new tests, but only if all the following are true:
   (1) The engine family from the previous model year differs from the current engine family only with respect to model year or other characteristics unrelated to emissions.  We may waive this criterion for differences we determine not to be relevant.
   (2) The emission-data engine from the previous model year remains the appropriate emission-data engine under paragraph (b) of this section.
   (3) The data show that the emission-data engine would meet all the requirements that apply to the engine family covered by the application for certification.
(e) We may require you to test a second engine of the same configuration in addition to the engine tested under paragraph (a) of this section.
(f) If you use an alternate test procedure under 40 CFR 1065.10 and later testing shows that such testing does not produce results that are equivalent to the procedures specified in subpart F of this part, we may reject data you generated using the alternate procedure.

§ 1036.241  Demonstrating compliance with greenhouse gas emission standards. 
(a) For purposes of certification, your engine family is considered in compliance with the emission standards in §1036.108 if all emission-data engines representing the tested configuration of that engine family have test results showing official emission results and deteriorated emission levels at or below the standards.  Note that your FCLs are considered to be the applicable emission standards with which you must comply for certification.
(b) Your engine family is deemed not to comply if any emission-data engine representing the tested configuration of that engine family has test results showing an official emission result or a deteriorated emission level for any pollutant that is above an applicable emission standard (generally the FCL).  Note that you may increase your FCL if any certification test results exceed your initial FCL.
(c) Apply deterioration factors to the measured emission levels for each pollutant to show compliance with the applicable emission standards.  Your deterioration factors must take into account any available data from in-use testing with similar engines.  Apply deterioration factors as follows:
   (1) Additive deterioration factor for greenhouse gas emissions. Except as specified in paragraphs (c)(2) and (3) of this section, use an additive deterioration factor for exhaust emissions.  An additive deterioration factor is the difference between the highest exhaust emissions (typically at the end of the useful life) and exhaust emissions at the low-hour test point.  In these cases, adjust the official emission results for each tested engine at the selected test point by adding the factor to the measured emissions.  If the factor is less than zero, use zero.  Additive deterioration factors must be specified to one more decimal place than the applicable standard. 
   (2) Multiplicative deterioration factor for greenhouse gas emissions. Use a multiplicative deterioration factor for a pollutant if good engineering judgment calls for the deterioration factor for that pollutant to be the ratio of the highest exhaust emissions (typically at the end of the useful life) to exhaust emissions at the low-hour test point.  Adjust the official emission results for each tested engine at the selected test point by multiplying the measured emissions by the deterioration factor.  If the factor is less than one, use one.  A multiplicative deterioration factor may not be appropriate in cases where testing variability is significantly greater than engine-to-engine variability.  Multiplicative deterioration factors must be specified to one more significant figure than the applicable standard. 
   (3) Sawtooth deterioration patterns.  The deterioration factors described in paragraphs (c)(1) and (2) of this section assume that the highest useful life emissions occur either at the end of useful life or at the low-hour test point.  The provisions of this paragraph (c)(3) apply where good engineering judgment indicates that the highest useful life emissions will occur between these two points.  For example, emissions may increase with service accumulation until a certain maintenance step is performed, then return to the low-hour emission levels and begin increasing again.  Such a pattern may occur with battery-based electric hybrid engines.  Base deterioration factors for engines with such emission patterns on the difference between (or ratio of) the point at which the highest emissions occur and the low-hour test point.  Note that this applies for maintenance-related deterioration only where we allow such critical emission-related maintenance.  
   (4) [Reserved]
   (5) Dual-fuel and flexible-fuel engines.  In the case of dual-fuel and flexible-fuel engines, apply deterioration factors separately for each fuel type.  Perform service accumulation with the worst-case fuel for deterioration, consistent with good engineering judgment; if you expect no difference between the fuels, use the fuel that is likely to be more commonly used.
(d) Calculate emission data using measurements to at least one more decimal place than the applicable standard.  Apply the deterioration factor to the official emission result, as described in paragraph (c) of this section, then round the adjusted figure to the same number of decimal places as the emission standard.  Compare the rounded emission levels to the emission standard for each emission-data engine.
(e) If you identify more than one configuration in §1036.205(e), we may test (or require you to test) any of the identified configurations.  We may also require you to provide an engineering analysis that demonstrates that untested configurations listed in §1036.205(e) comply with their FCL. 

§ 1036.250  Reporting and recordkeeping for certification. 
(a) Within 90 days after the end of the model year, send the Designated Compliance Officer a report including the total U.S.-directed production volume of engines you produced in each engine family during the model year (based on information available at the time of the report).  Report the production by serial number and engine configuration.  Small manufacturers may omit this requirement.  You may combine this report with reports required under subpart H of this part.
(b) Organize and maintain the following records:
   (1) A copy of all applications and any summary information you send us.
   (2) Any of the information we specify in §1036.205 that you were not required to include in your application. 
(c) Keep routine data from emission tests required by this part (such as test cell temperatures and relative humidity readings) for one year after we issue the associated certificate of conformity.  Keep all other information specified in this section for eight years after we issue your certificate.
(d) Store these records in any format and on any media, as long as you can promptly send us organized, written records in English if we ask for them.  You must keep these records readily available.  We may review them at any time.  

§ 1036.255  What decisions may EPA make regarding my certificate of conformity? 
(a) If we determine your application is complete and shows that the engine family meets all the requirements of this part and the Act, we will issue a certificate of conformity for your engine family for that model year.  We may make the approval subject to additional conditions.  
(b) We may deny your application for certification if we determine that your engine family fails to comply with emission standards or other requirements of this part or the Clean Air Act.  We will base our decision on all available information.  If we deny your application, we will explain why in writing.
(c) In addition, we may deny your application or suspend or revoke your certificate if you do any of the following:
   (1) Refuse to comply with any testing or reporting requirements.
   (2) Submit false or incomplete information (paragraph (e) of this section applies if this is fraudulent).  This includes doing anything after submission of your application to render any of the submitted information false or incomplete.
   (3) Render inaccurate any test data.
   (4) Deny us from completing authorized activities (see 40 CFR 1068.20).  This includes a failure to provide reasonable assistance.  
   (5) Produce engines for importation into the United States at a location where local law prohibits us from carrying out authorized activities.
   (6) Fail to supply requested information or amend your application to include all engines being produced.
   (7) Take any action that otherwise circumvents the intent of the Act or this part, with respect to your engine family.
(d) We may void the certificate of conformity for an engine family if you fail to keep records, send reports, or give us information as required under this part or the Act.  Note that these are also violations of 40 CFR 1068.101(a)(2).
(e) We may void your certificate if we find that you intentionally submitted false or incomplete information.  This includes rendering submitted information false or incomplete after submission. 
(f) If we deny your application or suspend, revoke, or void your certificate, you may ask for a hearing (see §1036.820).

Subpart D --  Testing Production Engines [Reserved] 

§1036.301  Measurements related to GEM inputs in a selective enforcement audit.
(a) Selective enforcement audits apply as specified in 40 CFR part 1068, subpart E.  This section describes how this applies uniquely in certain circumstances.
(b) Selective enforcement audit provisions apply with respect to your fuel maps as follows: 
   (1) A selective enforcement audit for fuel maps would consist of performing measurements with production engines to determine the fuel-consumption rates at each of the specified points under the engine map as declared for GEM simulations, and running GEM over one or more applicable duty cycles based on those measured values, using GEM inputs that represent any applicable vehicle configuration for which the engine is being used.  The engine is considered passing for a given configuration if the new modeled emission result for every applicable duty cycle is at or below the modeled emission result corresponding to the declared GEM inputs.  
   (2) We may specify up to ten unique vehicle configurations for an audit to verify that an engine's fuel map is part of a complying certified engine configuration.  If the audit includes fuel-map testing in conjunction with engine testing relative to exhaust emission standards, the fuel-map simulations for the whole set of vehicles and duty cycles counts as a single test result for purposes of evaluating whether the engine family meets the pass-fail criteria under 40 CFR 1068.420.  If the audit includes only fuel-map testing, the fuel-map simulation for each vehicle configuration counts as a separate test for the engine.  
(c) Selective enforcement audit provisions apply with respect to powertrain test results as specified in 40 CFR 1037.301. 
(d) We may suspend or revoke certificates, based on the outcome of a selective enforcement audit, for any appropriate configurations within one or more engine families. 

Subpart E -- In-use Testing

§ 1036.401  In-use testing. 
We may perform in-use testing of any engine family subject to the standards of this part, consistent with the Clean Air Act and the provisions of §1036.235.  Note that this provision does not affect your obligation to test your in-use engines as described in 40 CFR part 86, subpart T.

Subpart F -- Test Procedures

§ 1036.501  How do I run a valid emission test?
(a) Use the equipment and procedures specified in 40 CFR 86.1305 to determine whether engines meet the emission standards in §1036.108.  These same procedures apply for determining engine fuel maps and fuel consumption at idle as specified in §1036.535.  These procedures also apply for engine-based measurement procedures to simulate powertrain testing as specified in 40 CFR 1037.550.
(b) You may use special or alternate procedures to the extent we allow them under 40 CFR 1065.10.
(c) This subpart is addressed to you as a manufacturer, but it applies equally to anyone who does testing for you, and to us when we perform testing to determine if your engines meet emission standards.
(d) For engines that use aftertreatment technology with infrequent regeneration events, apply infrequent regeneration adjustment factors as described in §1037.530.
(e) Test hybrid engines as described in §1036.525 and 40 CFR part 1065.
(f) Determine engine fuel maps and fuel consumption at idle as described in §1036.535.
(g) The following additional provisions apply for testing to demonstrate compliance with the emission standards in §1036.108 for model year 2021 and later engines:
   (1) When calculating total engine work, exclude work during any portion of the duty cycle that has a zero reference value for normalized torque. 
   (2) If your engine is intended for installation in a vehicle equipped with stop-start technology, you may use good engineering judgment to turn the engine off during the idle portions of the duty cycle to represent in-use operation, consistent with good engineering judgment.  
   (3) Use continuous sampling (not batch sampling) to measure CO2 emissions over the ramped-modal cycle specified in 40 CFR 86.1362.  Integrate the test results by mode to establish separate emission rates for each mode (including the transition following each mode, as applicable).  Apply the weighting factors specified in 40 CFR 86.1362 to calculate a composite emission result.   
   
§ 1036.525  Hybrid engines. 
(a) If your engine system includes features that recover and store energy during engine motoring operation, test the engine as described in paragraph (d) of this section.  For purposes of this section, features that recover energy between the engine and transmission are considered related to engine motoring.
(b) If you produce a hybrid engine designed with power take-off capability and sell the engine coupled with a transmission, you may calculate a reduction in CO2 emissions resulting from the power take-off operation as described in 40 CFR 1037.525.  Use good engineering judgment to use the vehicle-based procedures to quantify the CO2 reduction for your engines.
(c) The hardware that must be included in these tests is the engine, the hybrid electric motor, the rechargeable energy storage system (RESS) and the power electronics between the hybrid electric motor and the RESS.  You may ask us to modify the provisions of this section to allow testing non-electric hybrid vehicles, consistent with good engineering judgment.
(d) Measure emissions using the same procedures that apply for testing non-hybrid engines under this part, except as specified otherwise in this part and/or 40 CFR part 1065.  If you test hybrid engines using the ramped-modal cycle, deactivate the hybrid features unless we have specified otherwise.  The five differences that apply under this section are related to engine mapping, engine shutdown during the test cycle, calculating work, limits on braking energy, and state of charge constraints.
   (1) Map the engine as specified in 40 CFR 1065.510.  This requires separate torque maps for the engine with and without the hybrid features active.  For transient testing, denormalize the test cycle using the map generated with the hybrid feature active.  For steady-state testing, denormalize the test cycle using the map generated with the hybrid feature inactive.
   (2) If the engine will be configured in actual use to shut down automatically during idle operation, you may let the engine shut down during the idle portions of the test cycle.
   (3) Follow 40 CFR 1065.650(d) to calculate the work done over the cycle except as specified in this paragraph (d)(3).  For the positive work over the cycle set negative power from hybrid to zero.  For the negative work over the cycle set the positive power to zero and the set the non-hybrid power to zero. 
      (4)(i) Calculate brake energy fraction, xb, as the integrated negative work over the cycle divided by the integrated positive work over the cycle according to Equation 1036.525-1.  Calculate the brake energy limit for the engine, xbl, according to Equation 1036.525-2.  If xb is less than xbl, use the integrated positive work for your emission calculations.  If xb is greater than xbl use Equation 1036.525-3 to calculate the positive work done over the cycle.  Use Wcycle as the integrated positive work when calculating brake-specific emissions.  To avoid the need to delete extra brake work from positive work you may set an instantaneous brake target that will prevent xb from being larger than xbl.
         	
         Eq. 1036.525-1
          
          Eq. 1036.525-2
          
         Eq. 1036.525-3
      
      (ii) The following definitions apply for this paragraph (d)(4):
         xb = the brake energy fraction.
         Wneg = the negative work over the cycle.
         Wpos = the positive work over the cycle.
         xbl = the brake energy fraction limit.
         Pmax = the maximum power of the engine with the hybrid system engaged (kW).
         Wcycle = the work over the cycle when xb is greater than xbl.
      (iii) Note that these calculations are specified with SI units (such as kW), consistent with 40 CFR part 1065.  Emission results are converted to g/hp-hr at the end of the calculations.
   (5) Correct for the net energy change of the energy storage device as described in 40 CFR 1066.501.

§ 1036.530  Calculating greenhouse gas emission rates. 
This section describes how to calculate official emission results for CO2, CH4, and N2O.
(a) Calculate brake-specific emission rates for each applicable duty cycle as specified in 40 CFR 1065.650.  Apply infrequent regeneration adjustment factors to your cycle-average results as described in 40 CFR 86.004-28 for CO2 starting in model year 2021.  You may optionally apply infrequent regeneration adjustment factors for CH4 and N2O.  
(b) Adjust CO2 emission rates calculated under paragraph (a) of this section for measured test fuel properties as specified in this paragraph (b) to obtain the official emission results.  You are not required to apply this adjustment for fuels containing at least 75 percent pure alcohol, such as E85.  The purpose of this adjustment is to make official emission results independent of differences in test fuels within a fuel type.  Use good engineering judgment to develop and apply testing protocols to minimize the impact of variations in test fuels.  
   (1) Determine mass-specific net energy content, Emfuelmeas, also known as lower heating value, in MJ/kg, expressed to at least three decimal places, as follows:
      (i) For liquid fuels, determine Emfuelmeas according to ASTM D4809 (recommended) or ASTM D240 (both incorporated by reference in §1036.810). 
      (ii) For gaseous fuels, determine Emfuelmeas using good engineering judgment. 
   (2) Determine your test fuel's carbon mass fraction, wC as described in 40 CFR 1065.655(d), expressed to at least three decimal places; however, for liquid fuels you must measure fuel properties rather than using the default values specified in Table 1 of 40 CFR 1065.655. 
   (3) Correct measured CO2 emission rates as follows: 
         
            Eq. 1036.530-1
         Where:
      eCO2 = the calculated CO2 emission result.
      Emfuelmeas = the mass-specific net energy content of the test fuel as determined by paragraph (b)(1) of this section.
      EmfuelCref = the reference value of carbon-specific net energy content for the appropriate fuel, as determined in Table 1 of this section.
      wCmeas = carbon mass fraction of the test fuel as determined by paragraph (b)(2) of this section.
      
      Example:
      eCO2 = 630.0 g/hp∙hr
      Emfuelmeas = 42.528 MJ/kg 
      EmfuelCref = 49.3112 MJ/kgC 
      wCmeas = 0.870
      
      eCO2cor = 624.5 g/hp∙hr
   
   Table 1 of § 1036.530 -- Reference fuel properties
Fuel Type[a]
 Reference fuel carbon-mass-specific net energy content, EmfuelCref,  (MJ/kgC)
                  Reference fuel carbon mass fraction, wCref 

                                       
                                       
Diesel fuel
                                    49.3112
                                     0.874
Gasoline
                                    50.4742
                                     0.846
Natural Gas
                                    66.2910
                                     0.750
LPG
                                    56.5218
                                     0.820
Dimethyl Ether
                                    55.3886
                                     0.521
[a] For fuels that are not listed, you must ask us to approve a reference fuel and its properties.
   
   
(c) Your official CO2 emission result equals your calculated brake-specific emission rate multiplied by all applicable adjustment factors, other than the deterioration factor. 

§ 1036.535  Determining engine fuel maps and fuel consumption at idle. 
This section describes procedures for determining an engine's fuel-consumption rate for model year 2021 and later vehicles.  Vehicle manufacturers will generally use these values to demonstrate compliance with vehicle-based Phase 2 emission standards that rely on emission modeling using the GEM simulation tool, as described in 40 CFR 1037.510.  
(a) General test provisions. Perform fuel mapping using the procedure described in paragraph (c) of this section to establish measured values for fuel-consumption rates at a range of engine speed and load settings.  Measure fuel consumption at idle using the procedure described in paragraph (d) of this section.  Also measure NOx emissions (in g/s) during each of the specified sampling periods.  Perform all emission measurements according to 40 CFR 1065.530(b) and (d).  Control engine speed and torque to within +-20 rpm and +-20 N∙m, or 20 percent of the speed and torque setpoint, whichever is greater.  This section uses engine parameters and variables that are consistent with 40 CFR part 1065.  For molar mass values, see 40 CFR 1065.1005(f)(2).
(b) Measured vs. declared fuel-consumption rates. Select numerical values to characterize the engine's fuel map and fuel-consumption rate at idle.  The selected values may not be lower than any corresponding measured values determined in paragraphs (c) and (d) of this section.  You may select any value that is at or above the corresponding measured value.  These selected fuel-consumption rates serve as worst-case values that vehicle manufacturers will use for certification.  Your declared fuel-consumption rates are analogous to Family Emission Limits; these values serve as standards (or limit values), which means that an engine exceeding its declared fuel-consumption rate at any point is considered noncompliant.  
(c) Steady-state fuel mapping.  Determine fuel-consumption rates for each engine configuration over a series of steady-state engine operating points as described in this paragraph (c).  You may use shared data across an engine platform to the extent that the fuel-consumption rates remain valid.  For example, if you test a high-output configuration and create a different configuration that uses the same fueling strategy but limits the engine operation to be a subset of that from the high-output configuration, you may use the fuel-consumption rates for the reduced number of mapped points for the low-output configuration.  Perform fuel mapping as follows:
    (1) Select 13 speed points that include warm idle speed, fnidle, maximum test speed, fntest, and 11 equally spaced points between fnidle and fntest.
    (2) Select 11 normalized torque values at each of the speed points determined in paragraph (c)(1) of this section, including T = 0, maximum mapped torque, Tmax mapped, and 9 equally spaced points between T = 0 and Tmax mapped.  Normalized torque values are expressed as a percentage of Tmax mapped at a given engine speed.
    (3) Warm up the engine as described in 40 CFR 1065.510(b)(2).
    (4) Within 60 seconds after concluding the warm-up procedure, operate the engine at fntest and the highest torque value, Tmax, at that speed.
    (5) After the engine operates at the set speed and torque for 60 seconds, start recording measurements using one of the following methods:
      (i) Record speed and torque and measure emissions of CO2, CO, NMHC, and CH4 for (29 to 31) seconds and determine the corresponding mean values for the sampling period.  
      (ii) Record speed and torque and measure fuel consumption with a fuel flow meter for (29 to 31) seconds and determine the corresponding mean values for the sampling period.  
    (6) Within 15 seconds after completing the sampling period described in paragraph (c)(5) of this section, set the engine to operate at the next lowest torque value while holding speed constant.  Perform the measurements described at the new torque setting and repeat this sequence for all remaining torque values down to T = 0.  
    (7) Continue testing to complete fuel mapping as follows:
      (i) Within 15 seconds after sampling at T = 0, set the engine to operate at the next lowest speed value and increase torque to Tmax.  Perform measurements for all the torque values at the selected speed as described in paragraphs (c)(5) and (6) of this section.  Repeat this sequence for all remaining speed values down to fnidle to complete the fuel-mapping procedure.  You may interrupt the mapping sequence to calibrate emission-measurement instrumentation only during stabilization at Tmax for a given speed.
      (ii) If an infrequent regeneration event occurs during fuel mapping, invalidate all the measurements made at that engine speed.  Allow the regeneration event to finish, then restart engine stabilization at Tmax at the same engine speed and continue with measurements from that point in the fuel-mapping sequence.  
    (8) If you determine fuel-consumption rates using emission measurements from the raw or diluted exhaust, calculate the mean fuel mass flow rate, , for each point in the fuel map using the following equation:
      
      	Eq. 1036.535-1
      
      Where:
      = mean fuel mass flow rate for a given fuel map setpoint, expressed to at least the nearest 0.001 g/s.
      MC = molar mass of carbon.
      wCmeas = carbon mass fraction of fuel as determined by 40 CFR 1065.655(d), except that you may not use the default properties in Table 1 of 40 CFR 1065.655 to determine α, , and wC for liquid fuels.
      = the mean raw exhaust molar flow rate from which you measured emissions according to 40 CFR 1065.655.
      = the mean concentration of carbon from fuel in the exhaust per mole of dry exhaust.
      = the mean concentration of H2O in exhaust per mole of dry exhaust.
      = the mean CO2 mass emission rate from urea decomposition as described in paragraph (c)(9) of this section.  If your engine does not utilize urea SCR for emission control, or if you choose not to perform this correction, set equal to 0.
      MCO2 = molar mass of carbon dioxide.
      
      Example: 
      MC = 12.0107 g/mol
      wCmeas = 0.869
      = 25.534 mol/s
      = 0.002805 mol/mol
       = 0.0353 mol/mol
      = 0.0726 g/s
      MCO2 = 44.0095 g/mol
      
    (9) If you determine fuel-consumption rates using emission measurements with engines that have urea SCR for NOx control, you may correct for the mean CO2 emissions coming from urea decomposition, , at each fuel map setpoint using the following equation:
      
      	Eq. 1036.535-2
      Where:
      = the mean mass flow rate of injected urea solution for a given sampling period.
      MCO2 = molar mass of carbon dioxide.
      VFCH4N2O = volume fraction of urea in aqueous solution.
      CH4N2O = density of urea = 1.32 kg/L.
      MCH4N2O = molar mass of urea.
      H2O = density of water = 1.00 kg/L.
      
      Example:
      = 0.255 g/s 
      MCO2 = 44.0095 g/mol
      VFCH4N2O = 32.5 % = 0.325
      CH4N2O = 1.32 kg/L
      MCH4N2O = 60.05526 g/mol
      H2O = 1.00 kg/L
      
   (10) For all fuels except those that have at least 75 % pure alcohol, correct the measured or calculated mean fuel mass flow rate,  at each engine operating condition to a mass-specific net energy content of a reference fuel using the following equation and the values specified in Table 1 of §1036.530:
      
         Eq. 1036.535-3
      
      Example:
      = 0.933 g/s
      Emfuelmeas = 42.7984 MJ/kgC
      wCref = 0.874
      EmfuelCref = 49.3112 MJ/kgC
      
(d) Fuel consumption at idle.  Determine values for fuel-consumption rate at idle for each engine configuration as described in this paragraph (d).  You may use shared data across engine configurations, consistent with good engineering judgment.  Perform measurements as follows:
    (1) Warm up the engine as described in 40 CFR 1065.510(b)(2).
    (2) Within 60 seconds after concluding the warm-up procedure, operate the engine at its minimum declared warm idle speed, fnidlemin, as described in 40 CFR 1065.510(b)(3), set zero torque, and start the sampling period.  Continue sampling for (595 to 605) seconds.  Perform measurements using one of the following methods during the sampling period:
      (i) Record speed and torque and measure emissions of CO2, CO, NMHC, and CH4 and determine the corresponding mean values for the sampling period.  Calculate the mean fuel mass flow rate, , during the sampling period as described in paragraph (c)(8) of this section.
      (ii) Record speed and torque and measure fuel consumption with a fuel flow meter and determine the corresponding mean values for the sampling period.  
    (3) Repeat the steps in paragraphs (d)(1) and (2) of this section with the engine set to operate at idle torque, Tidle.  Determine Tidle using the following equation:
    
      
      Where:
      Tfnstall = the maximum engine torque at fnstall.
      fnidle = the applicable engine idle speed as described in this paragraph (d).
      fnstall = the stall speed of the torque converter; use fntest or 2250 rpm, whichever is lower.
      Pacc = accessory power for the vehicle class; use 1300 W.
      
      Example:
      fntest = 1740.8 rpm = 182.30 rad/s
      fnstall = 1740.8 rpm = 182.30 rad/s
      Tfnstall = 1870 N∙m
      Pacc = 1300 W
      fnidle = 600 rpm = 62.83 rad/s
      
    (4) Repeat the steps in paragraphs (d)(1) through (3) of this section with the engine operated at its declared maximum warm idle speed, fnidlemax.
    (5) If an infrequent regeneration event occurs during this procedure, invalidate any measurements made at that idle condition.  Allow the regeneration event to finish, then repeat the measurement and continue with the test sequence. 
    (6) Correct the measured or calculated mean fuel mass flow rate,  at each of the four idle settings to account for mass-specific net energy content as described in paragraph (c)(10) of this section.
    
    
Subpart G -- Special Compliance Provisions
§ 1036.601  What compliance provisions apply? 
(a) Engine and vehicle manufacturers, as well as owners, operators, and rebuilders of engines subject to the requirements of this part, and all other persons, must observe the provisions of this part, the provisions of 40 CFR part 1068, and the provisions of the Clean Air Act.  The provisions of 40 CFR part 1068 apply for heavy-duty highway engines as specified in that part, subject to the following provisions:
   (1) The hardship exemption provisions of 40 CFR 1068.245, 1068.250, and 1068.255 do not apply for motor vehicle engines.
   (2)  The provisions of 40 CFR 1068.235 that allow for modifying certified engines for competition do not apply for heavy-duty vehicles or heavy-duty engines.  Certified motor vehicles and motor vehicle engines and their emission control devices must remain in their certified configuration even if they are used solely for competition or if they become nonroad vehicles or engines; anyone modifying a certified motor vehicle or motor vehicle engine for any reason is subject to the tampering and defeat device prohibitions of 40 CFR 1068.101(b) and 42 U.S.C. 7522(a)(3).
   (3) The tampering prohibition in 40 CFR 1068.101(b)(1) applies for alternative fuel conversions as specified in 40 CFR part 85, subpart F.
   (4) The warranty-related prohibitions in section 203(a)(4) of the Act (42 U.S.C. 7522(a)(4)) apply to manufacturers of new heavy-duty highway engines in addition to the prohibitions described in 40 CFR 1068.101(b)(6).  We may assess a civil penalty up to $37,500 for each engine or vehicle in violation.
(b) Engines exempted from the applicable standards of 40 CFR part 86 are exempt from the standards of this part without request.
(c) The provisions of 40 CFR 85.1716 allow for approval of emergency vehicle field modifications.
(d) Subpart C of this part describes how to test and certify dual-fuel and flexible-fuel engines. Some multi-fuel engines may not fit either of those defined terms.  For such engines, we will determine whether it is most appropriate to treat them as single-fuel engines, dual-fuel engines, or flexible-fuel engines based on the range of possible and expected fuel mixtures.  For example, an engine might burn natural gas but initiate combustion with a pilot injection of diesel fuel.  If the engine is designed to operate with a single fueling algorithm (i.e., fueling rates are fixed at a given engine speed and load condition), we would generally treat it as a single-fuel engine,  In this context, the combination of diesel fuel and natural gas would be its own fuel type.  If the engine is designed to also operate on diesel fuel alone, we would generally treat it as a dual-fueled engine.  If the engine is designed to operate on varying mixtures of the two fuels, we would generally treat it as a flexible-fueled engine. To the extent that requirements vary for the different fuels or fuel mixtures, we may apply the more stringent requirements.

§ 1036.610  Innovative technology credits and adjustments for reducing greenhouse gas emissions.
(a) You may ask us to apply the provisions of this section for CO2 emission reductions resulting from powertrain technologies that were not in common use with heavy-duty vehicles before model year 2010 that are not reflected in the specified test procedure.  We will apply these provisions only for technologies that will result in a measurable, demonstrable, and verifiable real-world CO2 reduction.  
(b) The provisions of this section may be applied as either an improvement factor (used to adjust emission results) or as a separate credit within the engine family, consistent with good engineering judgment.  (Note that the term "credit" is not equivalent to an emission credit in the ABT program of subpart H of this part; it used in this section for additive adjustments to emission rates.)  We recommend that you base your credit/adjustment on A to B testing of pairs of engines/vehicles differing only with respect to the technology in question. 
   (1) Calculate improvement factors as the ratio of in-use emissions with the technology divided by the in-use emissions without the technology.  Adjust the emission results by multiplying by the improvement factor.  Use the improvement-factor approach where good engineering judgment indicates that the actual benefit will be proportional to emissions measured over the test procedures specified in this part.  For example, the benefits from technologies that reduce engine operation would generally be proportional to the engine's emission rate.
   (2) Calculate separate credits based on the difference between the in-use emission rate (g/ton-mile) with the technology and the in-use emission rate without the technology.  Subtract this value from your measured emission result and use this adjusted value to determine your FEL.  We may also allow you to calculate the credits based on g/hp-hr emission rates.  Use the separate-credit approach where good engineering judgment indicates that the actual benefit will not be proportional to emissions measured over the test procedures specified in this part.
   (3) We may require you to discount or otherwise adjust your improvement factor or credit to account for uncertainty or other relevant factors.
(c) Send your request to the Designated Compliance Officer.  We recommend that you do not begin collecting test data (for submission to EPA) before contacting us.  For technologies for which the vehicle manufacturer could also claim credits (such as transmissions in certain circumstances), we may require you to include a letter from the vehicle manufacturer stating that it will not seek credits for the same technology.  Your request must contain the following items:
   (1) A detailed description of the off-cycle technology and how it functions to reduce CO2 emissions under conditions not represented on the duty cycles required for certification.
   (2) A list of the engine configurations that will be equipped with the technology.
   (3) A detailed description and justification of the selected test engines.
   (4) All testing and simulation data required under this section, plus any other data you have considered in your analysis.  You may ask for our preliminary approval of your test plan under §1037.210.
   (5) A complete description of the methodology used to estimate the off-cycle benefit of the technology and all supporting data, including engine testing and in-use activity data.  Also include a statement regarding your recommendation for applying the provisions of this section for the given technology as an improvement factor or a credit.
   (6) An estimate of the off-cycle benefit by engine model, and the fleetwide benefit based on projected sales of engine models equipped with the technology.
   (7) A demonstration of the in-use durability of the off-cycle technology, based on any available engineering analysis or durability testing data (either by testing components or whole engines).
(d) We may seek public comment on your request, consistent with the provisions of 40 CFR 86.1869-12(d).  However, we will generally not seek public comment on credits/adjustments based on A to B engine dynamometer testing, chassis testing, or in-use testing.
(e) We may approve an improvement factor or credit for any engine family that is properly represented by your testing.  You may similarly continue to use an approved improvement factor or credit for any appropriate engine families in future model years through 2020.  Starting in model year 2021, you must request our approval before applying an improvement factor or credit under this section for any kind of technology, even if we approved an improvement factor or credit for similar engine models before model year 2021.

§ 1036.615  Engines with Rankine cycle waste heat recovery and hybrid powertrains.
This section applies to Phase 1 and specifies how to generate advanced technology-specific emission credits for hybrid powertrains that include energy storage systems and regenerative braking (including regenerative engine braking) and for engines that include Rankine-cycle (or other bottoming cycle) exhaust energy recovery systems.  
(a) Pre-transmission hybrid powertrains.  Test pre-transmission hybrid powertrains with the hybrid engine test procedures of 40 CFR part 1065 or with the post-transmission test procedures in 40 CFR 1037.550.  Pre-transmission hybrid powertrains are those engine systems that include features to recover and store energy during engine motoring operation but not from the vehicle's wheels.
(b) Rankine engines.  Test engines that include Rankine-cycle exhaust energy recovery systems according to the test procedures specified in subpart F of this part unless we approve alternate procedures.
(c) Calculating credits.  Calculate credits as specified in subpart H of this part.  Credits generated from engines and powertrains certified under this section may be used in other averaging sets as described in § 1036.740(c). 
(d) Innovative technologies.  You may certify using both the provisions of this section and the innovative technology provisions of §1036.610, provided you do not double-count emission benefits.

§ 1036.620  Alternate CO2 standards based on model year 2011 compression-ignition engines.
For model years 2014 through 2016, you may certify your compression-ignition engines to the CO2 standards of this section instead of the CO2 standards in §1036.108.  However, you may not certify engines to these alternate standards if they are part of an averaging set in which you carry a balance of banked credits.  You may submit applications for certifications before using up banked credits in the averaging set, but such certificates will not become effective until you have used up (or retired) your banked credits in the averaging set.  For purposes of this section, you are deemed to carry credits in an averaging set if you carry credits from advanced technology that are allowed to be used in that averaging set.
(a) The standards of this section are determined from the measured emission rate of the test engine of the applicable baseline 2011 engine family(ies) as described in paragraphs (b) and (c) of this section.  Calculate the CO2 emission rate of the baseline test engine using the same equations used for showing compliance with the otherwise applicable standard.  The alternate CO2 standard for light and medium heavy-duty vocational-certified engines (certified for CO2 using the transient cycle) is equal to the baseline emission rate multiplied by 0.975.  The alternate CO2 standard for tractor-certified engines (certified for CO2 using the ramped-modal cycle) and all other heavy heavy-duty engines is equal to the baseline emission rate multiplied by 0.970.  The in-use FEL for these engines is equal to the alternate standard multiplied by 1.03. 
(b) This paragraph (b) applies if you do not certify all your engine families in the averaging set to the alternate standards of this section.  Identify separate baseline engine families for each engine family that you are certifying to the alternate standards of this section.  For an engine family to be considered the baseline engine family, it must meet the following criteria:
   (1) It must have been certified to all applicable emission standards in model year 2011.  If the baseline engine was certified to a NOx FEL above the standard and incorporated the same emission control technologies as the new engine family, you may adjust the baseline CO2 emission rate to be equivalent to an engine meeting the 0.20 g/hp-hr NOx standard (or your higher FEL as specified in this paragraph (b)(1)), using certification results from model years 2009 through 2011, consistent with good engineering judgment.  
      (i) Use the following equation to relate model year 2009-2011 NOx and CO2 emission rates (g/hp-hr): CO2 = a x log(NOx)+b. 
      (ii) For model year 2014-2016 engines certified to NOx FELs above 0.20 g/hp-hr, correct the baseline CO2 emissions to the actual NOx FELs of the 2014-2016 engines.  
      (iii) Calculate separate adjustments for emissions over the ramped-modal cycle and the transient cycle.
   (2) The baseline configuration tested for certification must have the same engine displacement as the engines in the engine family being certified to the alternate standards, and its rated power must be within five percent of the highest rated power in the engine family being certified to the alternate standards.
   (3) The model year 2011 U.S.-directed production volume of the configuration tested must be at least one percent of the total 2011 U.S.-directed production volume for the engine family.
   (4) The tested configuration must have cycle-weighted BSFC equivalent to or better than all other configurations in the engine family.
(c) This paragraph (c) applies if you certify all your engine families in the primary intended service class to the alternate standards of this section.  For purposes of this section, you may combine light heavy-duty and medium heavy-duty engines into a single averaging set.  Determine your baseline CO2 emission rate as the production-weighted emission rate of the certified engine families you produced in the 2011 model year.  If you produce engines for both tractors and vocational vehicles, treat them as separate averaging sets.  Adjust the CO2 emission rates to be equivalent to an engine meeting the average NOx FEL of new engines (assuming engines certified to the 0.20 g/hp-hr NOx standard have a NOx FEL equal to 0.20 g/hp-hr), as described in paragraph (b)(1) of this section.
(d) Include the following statement on the emission control information label: "THIS ENGINE WAS CERTIFIED TO AN ALTERNATE CO2 STANDARD UNDER §1036.620." 
(e) You may not bank CO2 emission credits for any engine family in the same averaging set and model year in which you certify engines to the standards of this section.  You may not bank any advanced technology credits in any averaging set for the model year you certify under this section (since such credits would be available for use in this averaging set).  Note that the provisions of §1036.745 apply for deficits generated with respect to the standards of this section.
(f) You need our approval before you may certify engines under this section, especially with respect to the numerical value of the alternate standards.  We will not approve your request if we determine that you manipulated your engine families or test engine configurations to certify to less stringent standards, or that you otherwise have not acted in good faith.  You must keep and provide to us any information we need to determine that your engine families meet the requirements of this section.  Keep these records for at least five years after you stop producing engines certified under this section.

§ 1036.625 In-use compliance with family emission limits (FELs).
You may ask us to apply a higher in-use FEL for certain in-use engines (after the end of the model year), subject to the provisions of this section.  Note that §1036.225 contains provisions related to changing FELs during a model year.
(a) Purpose.  This section is intended to address circumstances in which it is in the public interest to apply a higher in-use FEL based on forfeiting an appropriate number of emission credits.  
(b) FELs.  When applying higher in-use FELs to your engines, we would intend to accurately reflect the actual in-use performance of your engines, consistent with the specified testing provisions of this part.
(c) Equivalent families.  We may apply the higher FELs to other families in other model years if they used equivalent emission controls.
(d) Credit forfeiture.  Where we specify higher in-use FELs under this section, you must forfeit CO2 emission credits based on the difference between the in-use FEL and the otherwise applicable FEL.  Calculate the amount of credits to be forfeited using the applicable equation in §1036.705, by substituting the otherwise applicable FEL for the standard and the in-use FEL for the otherwise applicable FEL.
(e) Requests.  Submit your request to the Designated Compliance Officer.  Include the following in your request:
   (1) The engine family name and model year of the engines affected.
   (2) A list of other engine families/model years that may be affected.
   (3) The otherwise applicable FEL for the engine families along with your recommendations for higher in-use FELs.
   (4) Your source of credits for forfeiture. 
(f) Relation to recall.  You may not request higher in-use FELs for any engine families for which we have made a determination of nonconformance and ordered a recall.  You may, however, make such requests for engine families for which you are performing a voluntary emission recall.
(g) Approval.  We may approve your request if we determine that you meet the requirements of this section and such approval is in the public interest.  We may include appropriate conditions with our approval or we may approve your request with modifications. 

§ 1036.630 Certification of engine GHG emissions for powertrain testing.
For engines included in powertrain families under 40 CFR part 1037, you may choose to include the corresponding engine emissions in your engine families under this part 1036.  
(a) If you choose to include engine emissions in an engine family, the certified powertrain emission levels become standards that apply for selective enforcement audits and in-use testing.  We may that you provide the engine test cycle (not normalized) corresponding to a given powertrain for each of the specified duty cycles.  In the case of the idle test, this consists of single target values for speed and torque.
(b) Where a manufacturer chooses not to include engine emissions in the engine family, we will not presume that you are responsible for emissions over the powertrain cycles.  However, in such cases, where we determine that you are responsible in whole or in part for the emission exceedance, we may require that you participate in any recall of the affected vehicles.

Subpart H -- Averaging, Banking, and Trading for Certification
§ 1036.701  General provisions.
(a) You may average, bank, and trade (ABT) emission credits for purposes of certification as described in this subpart and in subpart B of this part to show compliance with the standards of §1036.108.  Participation in this program is voluntary.  (Note: As described in subpart B of this part, you must assign an FCL to all engine families, whether or not they participate in the ABT provisions of this subpart.)
(b) The definitions of subpart I of this part apply to this subpart.  The following definitions also apply: 
   (1) Actual emission credits means emission credits you have generated that we have verified by reviewing your final report.
   (2) Averaging set means a set of engines in which emission credits may be exchanged.  Credits generated by one engine may only be used by other engines in the same averaging set.  See §1036.740.
   (3) Broker means any entity that facilitates a trade of emission credits between a buyer and seller.
   (4) Buyer means the entity that receives emission credits as a result of a trade.
   (5) Reserved emission credits means emission credits you have generated that we have not yet verified by reviewing your final report.
   (6) Seller means the entity that provides emission credits during a trade.
   (7) Standard means the emission standard that applies under subpart B of this part for engines not participating in the ABT program of this subpart. 
   (8) Trade means to exchange emission credits, either as a buyer or seller.
(c) Emission credits may be exchanged only within an averaging set as specified in §1036.740.
(d) You may not use emission credits generated under this subpart to offset any emissions that exceed an FCL or standard.  This applies for all testing, including certification testing, in-use testing, selective enforcement audits, and other production-line testing.  However, if emissions from an engine exceed an FCL or standard (for example, during a selective enforcement audit), you may use emission credits to recertify the engine family with a higher FCL that applies only to future production.
(e) You may use either of the following approaches to retire or forego emission credits:
   (1) You may trade emission credits generated from any number of your engines to the engine purchasers or other parties to retire the credits.  Identify any such credits in the reports described in §1036.730.  Engines must comply with the applicable FELs even if you donate or sell the corresponding emission credits under this paragraph (h).  Those credits may no longer be used by anyone to demonstrate compliance with any EPA emission standards.
   (2) You may certify an engine family using an FEL (FCL for CO2) below the emission standard as described in this part and choose not to generate emission credits for that family.  If you do this, you do not need to calculate emission credits for those engine families and you do not need to submit or keep the associated records described in this subpart for that family.
(f) Emission credits may be used in the model year they are generated.  Surplus emission credits may be banked for future model years.  Surplus emission credits may sometimes be used for past model years, as described in §1036.745.  
(g) You may increase or decrease an FCL during the model year by amending your application for certification under §1036.225.  The new FCL may apply only to engines you have not already introduced into commerce.  
(h) See §1036.740 for special credit provisions that apply for greenhouse gas credits generated under 40 CFR 86.1819-14(d)(7) or §1036.615 or 40 CFR 1037.615.
(i) Unless the regulations explicitly allow it, you may not calculate credits more than once for any emission reduction.  For example, if you generate CO2 emission credits for a hybrid engine under this part for a given vehicle, no one may generate CO2 emission credits for that same hybrid engine and vehicle under 40 CFR part 1037.  However, credits could be generated for identical vehicles using engines that did not generate credits under this part. 
(j) You may use emission credits generated under the Phase 1 standards when certifying vehicles to Phase 2 standards.  No credit adjustments are required.
(k) Engine families you certify with a nonconformance penalty under 40 CFR part 86, subpart L, may not generate emission credits.

§ 1036.705  Generating and calculating emission credits.
(a) The provisions of this section apply separately for calculating emission credits for each pollutant.
(b) For each participating family, calculate positive or negative emission credits relative to the otherwise applicable emission standard based on the engine family's FCL for greenhouse gases.  If your engine family is certified to both the vocational and tractor engine standards, calculate credits separately for the vocational engines and the tractor engines (as specified in paragraph (b)(3) of this section).  Calculate positive emission credits for a family that has an FCL below the standard.  Calculate negative emission credits for a family that has an FCL above the standard.  Sum your positive and negative credits for the model year before rounding.  Round the sum of emission credits to the nearest megagram (Mg), using consistent units throughout the following equations:
   (1) For vocational engines:
   Emission credits (Mg) = (Std  -  FCL) · (CF) · (Volume) · (UL) · (10[-6])
   Where: 
         Std = the emission standard, in g/hp-hr, that applies under subpart B of this part for engines not participating in the ABT program of this subpart (the "otherwise applicable standard").
         FCL = the Family Certification Level for the engine family, in g/hp-hr, measured over the transient duty cycle, rounded to the same number of decimal places as the emission standard.  
         CF = a transient cycle conversion factor (hp-hr/mile), calculated by dividing the total (integrated) horsepower-hour over the duty cycle (average of vocational engine configurations weighted by their production volumes) by 6.3 miles for spark-ignition engines and 6.5 miles for compression-ignition engines.  This represents the average work performed by vocational engines in the family over the mileage represented by operation over the duty cycle. 
         Volume = the number of vocational engines eligible to participate in the averaging, banking, and trading program within the given engine family during the model year, as described in paragraph (c) of this section. 
         UL = the useful life for the given engine family, in miles.
   (2) For tractor engines:
   Emission credits (Mg) = (Std  -  FCL) · (CF) · (Volume) · (UL) · (10[-6])
   Where: 
         Std = the emission standard, in g/hp-hr, that applies under subpart B of this part for engines not participating in the ABT program of this subpart (the "otherwise applicable standard").
         FCL = the Family Certification Level for the engine family, in g/hp-hr, measured over the ramped-modal cycle rounded to the same number of decimal places as the emission standard.  
         CF = a transient cycle conversion factor (hp-hr/mile), calculated by dividing the total (integrated) horsepower-hour over the duty cycle (average of tractor-engine configurations weighted by their production volumes) by 6.3 miles for spark-ignition engines and 6.5 miles for compression-ignition engines.  This represents the average work performed by tractor engines in the family over the mileage represented by operation over the duty cycle.  Note that this calculation requires you to use the transient cycle conversion factor even for engines certified to standards based on the ramped-modal cycle. 
         Volume = the number of tractor engines eligible to participate in the averaging, banking, and trading program within the given engine family during the model year, as described in paragraph (c) of this section.
         UL = the useful life for the given engine family, in miles.
   (3) For engine families certified to both the vocational and tractor engine standards, we may allow you to use statistical methods to estimate the total production volumes where a small fraction of the engines cannot be tracked precisely.  
   (4) You may not generate emission credits for tractor engines (i.e., engines not certified to the transient cycle for CO2) installed in vocational vehicles (including vocational tractors certified pursuant to 40 CFR 1037.630 or exempted pursuant to 40 CFR 1037.631).  We will waive this requirement where you demonstrate that less than five percent of the engines in your tractor family were installed in vocational vehicles.  For example, if you know that 96 percent of your tractor engines were installed in non-vocational tractors, but cannot determine the vehicle type for the remaining four percent, you may generate credits for all the engines in the family.  
(c) As described in §1036.730, compliance with the requirements of this subpart is determined at the end of the model year based on actual U.S.-directed production volumes.  Keep appropriate records to document these production volumes. Do not include any of the following engines to calculate emission credits:
   (1) Engines that you do not certify to the CO2 standards of this part because they are permanently exempted under subpart G of this part or under 40 CFR part 1068.
   (2) Exported engines.
   (3) Engines not subject to the requirements of this part, such as those excluded under §1036.5.  For example, do not include engines used in vehicles certified to the greenhouse gas standards of 40 CFR 86.1819.
   (4) [Reserved]
   (5) Any other engines if we indicate elsewhere in this part 1036 that they are not to be included in the calculations of this subpart. 
(d) You may use CO2 emission credits to show compliance with CH4 and/or N2O FELs instead of the otherwise applicable emission standards.  To do this, calculate the CH4 and/or N2O emission credits needed (negative credits) using the equation in paragraph (b) of this section, using the FEL(s) you specify for your engines during certification instead of the FCL.  You must use 25 Mg of positive CO2 credits to offset 1 Mg of negative CH4 credits.  You must use 298 Mg of positive CO2 credits to offset 1 Mg of negative N2O credits.

§ 1036.710  Averaging. 
(a) Averaging is the exchange of emission credits among your engine families.  You may average emission credits only within the same averaging set.
(b) You may certify one or more engine families to an FCL above the applicable standard, subject to any applicable FEL caps and other the provisions in subpart B of this part, if you show in your application for certification that your projected balance of all emission-credit transactions in that model year is greater than or equal to zero, or that a negative balance is allowed under §1036.745. 
(c) If you certify an engine family to an FCL that exceeds the otherwise applicable standard, you must obtain enough emission credits to offset the engine family's deficit by the due date for the final report required in §1036.730.  The emission credits used to address the deficit may come from your other engine families that generate emission credits in the same model year (or from later model years as specified in §1036.745), from emission credits you have banked, or from emission credits you obtain through trading.

§ 1036.715  Banking. 
(a) Banking is the retention of surplus emission credits by the manufacturer generating the emission credits for use in future model years for averaging or trading. 
(b) You may designate any emission credits you plan to bank in the reports you submit under §1036.730 as reserved credits.  During the model year and before the due date for the final report, you may designate your reserved emission credits for averaging or trading.
(c) Reserved credits become actual emission credits when you submit your final report.  However, we may revoke these emission credits if we are unable to verify them after reviewing your reports or auditing your records.
(d) Banked credits retain the designation of the averaging set in which they were generated.

§ 1036.720  Trading. 
(a) Trading is the exchange of emission credits between manufacturers, or the transfer of credits to another party to retire them.  You may use traded emission credits for averaging, banking, or further trading transactions.  Traded emission credits remain subject to the averaging-set restrictions based on the averaging set in which they were generated.
(b) You may trade actual emission credits as described in this subpart.  You may also trade reserved emission credits, but we may revoke these emission credits based on our review of your records or reports or those of the company with which you traded emission credits.  You may trade banked credits within an averaging set to any certifying manufacturer.
(c) If a negative emission credit balance results from a transaction, both the buyer and seller are liable, except in cases we deem to involve fraud.  See §1036.255(e) for cases involving fraud.  We may void the certificates of all engine families participating in a trade that results in a manufacturer having a negative balance of emission credits.  See §1036.745.

§ 1036.725  What must I include in my application for certification? 
(a) You must declare in your application for certification your intent to use the provisions of this subpart for each engine family that will be certified using the ABT program.  You must also declare the FELs/FCL you select for the engine family for each pollutant for which you are using the ABT program.  Your FELs must comply with the specifications of subpart B of this part, including the FEL caps.  FELs/FCLs must be expressed to the same number of decimal places as the applicable standards.
(b) Include the following in your application for certification:
   (1) A statement that, to the best of your belief, you will not have a negative balance of emission credits for any averaging set when all emission credits are calculated at the end of the year; or a statement that you will have a negative balance of emission credits for one or more averaging sets, but that it is allowed under §1036.745.
   (2) Detailed calculations of projected emission credits (positive or negative) based on projected U.S.-directed production volumes.  We may require you to include similar calculations from your other engine families to project your net credit balances for the model year.  If you project negative emission credits for a family, state the source of positive emission credits you expect to use to offset the negative emission credits.  

§ 1036.730  ABT reports.
(a) If any of your engine families are certified using the ABT provisions of this subpart, you must send a final report within 90 days after the end of the model year.  You may ask us to extend the deadline for the final report by up to 30 days.
(b) Your final report must include the following information for each engine family participating in the ABT program:
   (1) Engine-family designation and averaging set.
   (2) The emission standards that would otherwise apply to the engine family.
   (3) The FCL for each pollutant.  If you change the FCL after the start of production, identify the date that you started using the new FCL and/or give the engine identification number for the first engine covered by the new FCL.  In this case, identify each applicable FCL and calculate the positive or negative emission credits as specified in §1036.225.
   (4) The projected and actual U.S.-directed production volumes for the model year. If you changed an FCL during the model year, identify the actual production volume associated with each FCL.
   (5) The transient cycle conversion factor for each engine configuration as described in §1036.705.
   (6) Useful life.
   (7) Calculated positive or negative emission credits for the whole engine family.  Identify any emission credits that you traded, as described in paragraph (d)(1) of this section.
(c) Your final report must include the following additional information:
   (1) Show that your net balance of emission credits from all your participating engine families in each averaging set in the applicable model year is not negative, except as allowed under §1036.745.    Your credit tracking must account for the limitation on credit life under §1036.740(d).
   (2) State whether you will reserve any emission credits for banking.
   (3) State that the report's contents are accurate.
(d) If you trade emission credits, you must send us a report within 90 days after the transaction, as follows:
	(1) As the seller, you must include the following information in your report:
      (i) The corporate names of the buyer and any brokers.
      (ii) A copy of any contracts related to the trade.
      (iii) The engine families that generated emission credits for the trade, including the number of emission credits from each family.
   (2) As the buyer, you must include the following information in your report:
      (i) The corporate names of the seller and any brokers.
      (ii) A copy of any contracts related to the trade.
      (iii) How you intend to use the emission credits, including the number of emission credits you intend to apply to each engine family (if known).
(e) Send your reports electronically to the Designated Compliance Officer using an approved information format.  If you want to use a different format, send us a written request with justification for a waiver.
(f) Correct errors in your final report as follows:
   (1) If you or we determine before the due date for the final report that errors mistakenly decreased your balance of emission credits, you may correct the errors and recalculate the balance of emission credits.  You may not make these corrections for errors that are determined after the due date for the final report.  If you report a negative balance of emission credits, we may disallow corrections under this paragraph (f)(1).
   (2) If you or we determine anytime that errors mistakenly increased your balance of emission credits, you must correct the errors and recalculate the balance of emission credits.
   
§ 1036.735  Recordkeeping. 
(a) You must organize and maintain your records as described in this section.  We may review your records at any time.
(b) Keep the records required by this section for at least eight years after the due date for the final report.  You may not use emission credits for any engines if you do not keep all the records required under this section.  You must therefore keep these records to continue to bank valid credits.  Store these records in any format and on any media, as long as you can promptly send us organized, written records in English if we ask for them.  You must keep these records readily available.  We may review them at any time.
(c) Keep a copy of the reports we require in §§1036.725 and 1036.730.
(d) Keep records of the engine identification number (usually the serial number) for each engine you produce that generates or uses emission credits under the ABT program.  You may identify these numbers as a range.  If you change the FEL after the start of production, identify the date you started using each FCL and the range of engine identification numbers associated with each FCL.  You must also identify the purchaser and destination for each engine you produce to the extent this information is available.
(e) We may require you to keep additional records or to send us relevant information not required by this section in accordance with the Clean Air Act.

§ 1036.740  Restrictions for using emission credits. 
The following restrictions apply for using emission credits:
(a) Averaging sets. Except as specified in paragraph (c) of this section, emission credits may be exchanged only within the following averaging sets:
   (1) Spark-ignition engines.
   (2) Compression-ignition light heavy-duty engines.
   (3) Compression-ignition medium heavy-duty engines.
   (4) Compression-ignition heavy heavy-duty engines.
(b) Applying credits to prior year deficits.  Where your credit balance for the previous year is negative, you may apply credits to that credit deficit only after meeting your credit obligations for the current year. 
(c) Credits from hybrid engines and other advanced technologies.  Credits you generate under §1036.615 may be used for any of the averaging sets identified in paragraph (a) of this section; you may also use those credits to demonstrate compliance with the CO2 emission standards in 40 CFR 86.1819 and 40 CFR part 1037.  Similarly, you may use advanced-technology credits generated under 40 CFR 86.1819-14(d)(7) or 40 CFR 1037.615 to demonstrate compliance with the CO2 standards in this part. In the case of spark-ignition engines and compression-ignition light heavy-duty engines, you may not use more than 60,000 Mg of credits from other averaging sets in any model year. 
   (1)The maximum amount of CO2 credits you may bring into the following service class groups is 60,000 Mg per model year: 
      (i) Spark-ignition engines, light heavy-duty compression-ignition engines, and light heavy-duty vehicles.  This group comprises the averaging sets listed in paragraphs (a)(1) and (2) of this section and the averaging set listed in 40 CFR 1037.740(a)(1). 
      (ii) Medium heavy-duty compression-ignition engines and medium heavy-duty vehicles.  This group comprises the averaging sets listed in paragraph (a)(3) of this section and 40 CFR 1037.740(a)(2).
      (iii) Heavy heavy-duty compression-ignition engines and heavy heavy-duty vehicles.  This group comprises the averaging sets listed in paragraph (a)(4) of this section and 40 CFR 1037.740(a)(3).
   (2) The limit specified in paragraph (c)(1) of this section does not limit the amount of advanced technology credits that can be used within a service class group if they were generated in that same service class group.
(d) Credit life.  Credits may be used only for five model years after the year in which they are generated.  For example, credits you generate in model year 2018 may be used to demonstrate compliance with emission standards only through model year 2023.
(e) Other restrictions.  Other sections of this part specify additional restrictions for using emission credits under certain special provisions.

§ 1036.745  End-of-year CO2 credit deficits. 
Except as allowed by this section, we may void the certificate of any engine family certified to an FCL above the applicable standard for which you do not have sufficient credits by the deadline for submitting the final report.  
(a)  Your certificate for an engine family for which you do not have sufficient CO2 credits will not be void if you remedy the deficit with surplus credits within three model years.  For example, if you have a credit deficit of 500 Mg for an engine family at the end of model year 2015, you must generate (or otherwise obtain) a surplus of at least 500 Mg in that same averaging set by the end of model year 2018.
(b) You may not bank or trade away CO2 credits in the averaging set in any model year in which you have a deficit.
(c) You may apply only surplus credits to your deficit.  You may not apply credits to a deficit from an earlier model year if they were generated in a model year for which any of your engine families for that averaging set had an end-of-year credit deficit.
(d) If you do not remedy the deficit with surplus credits within three model years, we may void your certificate for that engine family.  Note that voiding a certificate applies ab initio.  Where the net deficit is less than the total amount of negative credits originally generated by the family, we will void the certificate only with respect to the number of engines needed to reach the amount of the net deficit.  For example, if the original engine family generated 500 Mg of negative credits, and the manufacturer's net deficit after three years was 250 Mg, we would void the certificate with respect to half of the engines in the family.
(e) For purposes of calculating the statute of limitations, the following actions are all considered to occur at the expiration of the deadline for offsetting deficits as specified in paragraph (a) of this section:
   (1) Failing to meet the requirements of paragraph (a) of this section.
   (2) Failing to satisfy the conditions upon which a certificate was issued relative to offsetting a deficit.
   (3) Selling, offering for sale, introducing or delivering into U.S. commerce, or importing vehicles that are found not to be covered by a certificate as a result of failing to offset a deficit.

§ 1036.750  What can happen if I do not comply with the provisions of this subpart? 
(a) For each engine family participating in the ABT program, the certificate of conformity is conditioned upon full compliance with the provisions of this subpart during and after the model year.  You are responsible to establish to our satisfaction that you fully comply with applicable requirements.  We may void the certificate of conformity for an engine family if you fail to comply with any provisions of this subpart.
(b) You may certify your engine family to an FCL above an applicable standard based on a projection that you will have enough emission credits to offset the deficit for the engine family.  See §1036.745 for provisions specifying what happens if you cannot show in your final report that you have enough actual emission credits to offset a deficit for any pollutant in an engine family.
(c) We may void the certificate of conformity for an engine family if you fail to keep records, send reports, or give us information we request.  Note that failing to keep records, send reports, or give us information we request is also a violation of 42 U.S.C. 7522(a)(2).
(d) You may ask for a hearing if we void your certificate under this section (see §1036.820).

§ 1036.755  Information provided to the Department of Transportation.
After receipt of each manufacturer's final report as specified in §1036.730 and completion of any verification testing required to validate the manufacturer's submitted final data, we will issue a report to the Department of Transportation with CO2 emission information and will verify the accuracy of each manufacturer's equivalent fuel consumption data that required by NHTSA under 49 CFR 535.8.  We will send a report to DOT for each engine manufacturer based on each regulatory category and subcategory, including sufficient information for NHTSA to determine fuel consumption and associated credit values.  See 49 CFR 535.8 to determine if NHTSA deems submission of this information to EPA to also be a submission to NHTSA.

Subpart I -- Definitions and Other Reference Information
§ 1036.801  Definitions. 
	The following definitions apply to this part.  The definitions apply to all subparts unless we note otherwise.  All undefined terms have the meaning the Act gives to them.  The definitions follow:
	Act means the Clean Air Act, as amended, 42 U.S.C. 7401 - 7671q.
	Adjustable parameter has the meaning given in 40 CFR part 86.
	Advanced technology means technology certified under 40 CFR 86.1819-14(d)(7), §1036.615, or 40 CFR 1037.615.
	Aftertreatment means relating to a catalytic converter, particulate filter, or any other system, component, or technology mounted downstream of the exhaust valve (or exhaust port) whose design function is to decrease emissions in the engine exhaust before it is exhausted to the environment.  Exhaust-gas recirculation (EGR) and turbochargers are not aftertreatment.
	Aircraft means any vehicle capable of sustained air travel at least 100 feet off the ground.
	Alcohol-fueled engine mean an engine that is designed to run using an alcohol fuel.  For purposes of this definition, alcohol fuels do not include fuels with a nominal alcohol content below 25 percent by volume. 
Auxiliary emission control device means any element of design that senses temperature, motive speed, engine rpm, transmission gear, or any other parameter for the purpose of activating, modulating, delaying, or deactivating the operation of any part of the emission control system. 
	Averaging set has the meaning given in §1036.740.
	Calibration means the set of specifications and tolerances specific to a particular design, version, or application of a component or assembly capable of functionally describing its operation over its working range.
	Carryover means relating to certification based on emission data generated from an earlier model year as described in §1036.235(d).
	Certification means relating to the process of obtaining a certificate of conformity for an engine family that complies with the emission standards and requirements in this part.  
	Certified emission level means the highest deteriorated emission level in an engine family for a given pollutant from the applicable transient and/or steady-state testing, rounded to the same number of decimal places as the applicable standard.  Note that you may have two certified emission levels for CO2 if you certify a family for both vocational and tractor use.
	Complete vehicle means a vehicle meeting the definition of complete vehicle in 40 CFR 1037.801 when it is first sold as a vehicle.  For example, where a vehicle manufacturer sells an incomplete vehicle to a secondary manufacturer, the vehicle is not a complete vehicle under this part, even after its final assembly. 
	Compression-ignition means relating to a type of reciprocating, internal-combustion engine that is not a spark-ignition engine.  Note that §1036.1 also deems other gas turbine engines and other engines to be compression-ignition engines. 
	Crankcase emissions means airborne substances emitted to the atmosphere from any part of the engine crankcase's ventilation or lubrication systems.  The crankcase is the housing for the crankshaft and other related internal parts.
	Criteria pollutants means emissions of NOx, HC, PM, and CO.  Note that these pollutants are also sometimes described collectively as "non-greenhouse gas pollutants", although they do not necessarily have negligible global warming potentials. 
	Designated Compliance Officer means one of the following:
(1) For compression-ignition engines, Designated Compliance Officer means Director, Diesel Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov.
(2) For spark-ignition engines, Designated Compliance Officer means Director, Gasoline Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; nonroad-si-cert@epa.gov. 	Deteriorated emission level means the emission level that results from applying the appropriate deterioration factor to the official emission result of the emission-data engine. Note that where no deterioration factor applies, references in this part to the deteriorated emission level mean the official emission result.
	Deterioration factor means the relationship between emissions at the end of useful life (or point of highest emissions if it occurs before the end of useful life) and emissions at the low-hour/low-mileage test point, expressed in one of the following ways:
(1) For multiplicative deterioration factors, the ratio of emissions at the end of useful life (or point of highest emissions) to emissions at the low-hour test point.
(2) For additive deterioration factors, the difference between emissions at the end of useful life (or point of highest emissions) and emissions at the low-hour test point. 
	Dual-fuel means relating to an engine designed for operation on two different types of fuel but not on a continuous mixture of those fuels.  For purposes of this part, such an engine remains a dual-fuel engine even if it is designed for operation on three or more different fuels.  Note that natural gas engines using diesel pilot injection may or may not be considered to be dual-fuel engines, consistent with the provisions of §1033.601.
	Emission control system means any device, system, or element of design that controls or reduces the emissions of regulated pollutants from an engine.
	Emission-data engine means an engine that is tested for certification.  This includes engines tested to establish deterioration factors.
	Emission-related maintenance means maintenance that substantially affects emissions or is likely to substantially affect emission deterioration.
	Engine configuration means a unique combination of engine hardware and calibration (related to the emission standards) within an engine family. Engines within a single engine configuration differ only with respect to normal production variability or factors unrelated to compliance with emission standards.
	Engine family has the meaning given in §1036.230.
	Excluded means relating to engines that are not subject to some or all of the requirements of this part as follows:
(1) An engine that has been determined not to be a heavy-duty engine is excluded from this part.
(2) Certain heavy-duty engines are excluded from the requirements of this part under §1036.5.
(3) Specific regulatory provisions of this part may exclude a heavy-duty engine generally subject to this part from one or more specific standards or requirements of this part.
	Exempted has the meaning given in 40 CFR 1068.30.
	Exhaust-gas recirculation means a technology that reduces emissions by routing exhaust gases that had been exhausted from the combustion chamber(s) back into the engine to be mixed with incoming air before or during combustion. The use of valve timing to increase the amount of residual exhaust gas in the combustion chamber(s) that is mixed with incoming air before or during combustion is not considered exhaust-gas recirculation for the purposes of this part.
	Family certification level (FCL) means a CO2 emission level declared by the manufacturer that is at or above emission test results for all emission-data engines.  The FCL serves as the emission standard for the engine family with respect to certification testing if it is different than the otherwise applicable standard.  The FCL must be expressed to the same number of decimal places as the emission standard it replaces. 
	Family emission limit (FEL) means an emission level declared by the manufacturer to serve in place of an otherwise applicable emission standard (other than CO2 standards) under the ABT program in subpart H of this part.  The FEL must be expressed to the same number of decimal places as the emission standard it replaces.  The FEL serves as the emission standard for the engine family with respect to all required testing except certification testing for CO2.  The CO2 FEL is equal to the CO2 FCL multiplied by 1.03 and rounded to the same number of decimal places as the standard (e.g., the nearest whole g/hp-hr for the 2016 CO2 standards).  
	Flexible-fuel means relating to an engine designed for operation on any mixture of two or more different types of fuels.  Note that this does not include natural gas engines that use specific mixtures of diesel fuel and natural gas rather than widely varying mixtures.
	Fuel type means a general category of fuels such as diesel fuel, gasoline, or natural gas.  There can be multiple grades within a single fuel type, such as premium gasoline, regular gasoline, or gasoline with 10 percent ethanol.
	Good engineering judgment has the meaning given in 40 CFR 1068.30.  See 40 CFR 1068.5 for the administrative process we use to evaluate good engineering judgment.
	Greenhouse gas means one or more compounds regulated under this part based primarily on their impact on the climate.  This generally includes CO2, CH4, and N2O.  
Greenhouse gas emissions model (GEM) means the GEM simulation tool described in 40 CFR 1037.520.  Note that different version of GEM are used for different standards.
	Gross vehicle weight rating (GVWR) means the value specified by the vehicle manufacturer as the maximum design loaded weight of a single vehicle, consistent with good engineering judgment.
	Heavy-duty engine means any engine which the engine manufacturer could reasonably expect to be used for motive power in a heavy-duty vehicle.  For purposes of this definition in this part, the term "engine" includes internal combustion engines and other devices that convert chemical fuel into motive power.  For example, a fuel cell or a gas turbine used in a heavy-duty vehicle is a heavy-duty engine.
	Heavy-duty vehicle means any motor vehicle above 8,500 pounds GVWR or that has a vehicle curb weight above 6,000 pounds or that has a basic vehicle frontal area greater than 45 square feet. Curb weight has the meaning given in 40 CFR 86.1803.  Basic vehicle frontal area has the meaning given in 40 CFR 86.1803.
	Hybrid engine or hybrid powertrain means an engine or powertrain that includes energy storage features other than a conventional battery system or conventional flywheel.  Supplemental electrical batteries and hydraulic accumulators are examples of hybrid energy storage systems.  Note that certain provisions in this part treat hybrid engines and powertrains intended for vehicles that include regenerative braking different than those intended for vehicles that do not include regenerative braking. 
	Hydrocarbon (HC) means the hydrocarbon group on which the emission standards are based for each fuel type.  For alcohol-fueled engines, HC means nonmethane hydrocarbon equivalent (NMHCE).  For all other engines, HC means nonmethane hydrocarbon (NMHC).
	Identification number means a unique specification (for example, a model number/serial number combination) that allows someone to distinguish a particular engine from other similar engines.
	Incomplete vehicle means a vehicle meeting the definition of incomplete vehicle in 40 CFR 1037.801 when it is first sold as a vehicle. 
	Innovative technology means technology certified under §1036.610.
	Liquefied petroleum gas (LPG) means a liquid hydrocarbon fuel that is stored under pressure and is composed primarily of nonmethane compounds that are gases at atmospheric conditions.  Note that, although this commercial term includes the word "petroleum", LPG is not considered to be a petroleum fuel under the definitions of this section. 
Low-hour means relating to an engine that has stabilized emissions and represents the undeteriorated emission level.  This would generally involve less than 125 hours of operation.
	Manufacture means the physical and engineering process of designing, constructing, and/or assembling a heavy-duty engine or a heavy-duty vehicle. 
	Manufacturer has the meaning given in section 216(1) of the Act.  In general, this term includes any person who manufactures or assembles an engine, vehicle, or piece of equipment for sale in the United States or otherwise introduces a new engine into commerce in the United States.  This includes importers who import engines or vehicles for resale. 
   Medium-duty passenger vehicle has the meaning given in 40 CFR 86.1803.
Model year means the manufacturer's annual new model production period, except as restricted under this definition.  It must include January 1 of the calendar year for which the model year is named, may not begin before January 2 of the previous calendar year, and it must end by December 31 of the named calendar year.  Manufacturers may not adjust model years to circumvent or delay compliance with emission standards or to avoid the obligation to certify annually. 
	Motor vehicle has the meaning given in 40 CFR 85.1703. 
	Natural gas means a fuel whose primary constituent is methane.
	New motor vehicle engine has the meaning given in the Act.  This generally means a motor vehicle engine meeting the criteria of either paragraph (1), (2), or (3) of this definition.  
(1) A motor vehicle engine for which the ultimate purchaser has never received the equitable or legal title is a new motor vehicle engine.  This kind of engine might commonly be thought of as "brand new" although a new motor vehicle engine may include previously used parts.  Under this definition, the engine is new from the time it is produced until the ultimate purchaser receives the title or places it into service, whichever comes first.
(2) An imported motor vehicle engine is a new motor vehicle engine if it was originally built on or after January 1, 1970.
(3) Any motor vehicle engine installed in a new motor vehicle.
	Noncompliant engine means an engine that was originally covered by a certificate of conformity, but is not in the certified configuration or otherwise does not comply with the conditions of the certificate.
	Nonconforming engine means an engine not covered by a certificate of conformity that would otherwise be subject to emission standards.
	Nonmethane hydrocarbons (NMHC) means the sum of all hydrocarbon species except methane, as measured according to 40 CFR part 1065. 
Nonmethane hydrocarbon equivalent has the meaning given in 40 CFR 1065.1001.
	Official emission result means the measured emission rate for an emission-data engine on a given duty cycle before the application of any deterioration factor, but after the applicability of any required regeneration or other adjustment factors.
	Owners manual means a document or collection of documents prepared by the engine or vehicle manufacturer for the owner or operator to describe appropriate engine maintenance, applicable warranties, and any other information related to operating or keeping the engine.  The owners manual is typically provided to the ultimate purchaser at the time of sale.
	Oxides of nitrogen has the meaning given in 40 CFR 1065.1001.
	Percent has the meaning given in 40 CFR 1065.1001.  Note that this means percentages identified in this part are assumed to be infinitely precise without regard to the number of significant figures.  For example, one percent of 1,493 is 14.93.
	Petroleum means gasoline or diesel fuel or other fuels normally derived from crude oil.  This does not include methane or LPG. 
	Placed into service means put into initial use for its intended purpose, excluding incidental use by the manufacturer or a dealer.
	Preliminary approval means approval granted by an authorized EPA representative prior to submission of an application for certification, consistent with the provisions of § 1036.210.
	Primary intended service class has the meaning given in §1036.140.
		Rechargeable Energy Storage System (RESS) means the component(s) of a hybrid engine or vehicle that store recovered energy for later use, such as the battery system in an electric hybrid vehicle.
	Revoke has the meaning given in 40 CFR 1068.30.
	Round has the meaning given in 40 CFR 1065.1001.
	Scheduled maintenance means adjusting, repairing, removing, disassembling, cleaning, or replacing components or systems periodically to keep a part or system from failing, malfunctioning, or wearing prematurely.  It also may mean actions you expect are necessary to correct an overt indication of failure or malfunction for which periodic maintenance is not appropriate.
	Small manufacturer means a manufacturer meeting the criteria specified in 13 CFR 121.201.  For manufacturers owned by a parent company, the employee and revenue limits apply to the total number of employees and total revenue of the parent company and all its subsidiaries.  Note that small-volume manufacturers may or may not be "small manufacturers".	Spark-ignition means relating to a gasoline-fueled engine or any other type of engine with a spark plug (or other sparking device) and with operating characteristics significantly similar to the theoretical Otto combustion cycle.  Spark-ignition engines usually use a throttle to regulate intake air flow to control power during normal operation.  Note that some spark-ignition engines are subject to requirements that apply for compression-ignition engines as described in §1036.140.
	Steady-state has the meaning given in 40 CFR 1065.1001.
	Suspend has the meaning given in 40 CFR 1068.30.
	Test engine means an engine in a test sample.
	Test sample means the collection of engines selected from the population of an engine family for emission testing.  This may include testing for certification, production-line testing, or in-use testing.
	Tractor means a vehicle meeting the definition of "tractor" in 40 CFR 1037.801, but not classified as a "vocational tractor" under 40 CFR 1037.630, or relating to such a vehicle.
	Tractor engine means an engine certified for use in tractors.  Where an engine family is certified for use in both tractors and vocational vehicles, "tractor engine" means an engine that the engine manufacturer reasonably believes will be (or has been) installed in a tractor.  Note that the provisions of this part may require a manufacturer to document how it determines that an engine is a tractor engine.
	Ultimate purchaser means, with respect to any new engine or vehicle, the first person who in good faith purchases such new engine or vehicle for purposes other than resale.
	United States has the meaning given in 40 CFR 1068.30.
	Upcoming model year means for an engine family the model year after the one currently in production.
	U.S.-directed production volume means the number of engines, subject to the requirements of this part, produced by a manufacturer for which the manufacturer has a reasonable assurance that sale was or will be made to ultimate purchasers in the United States.  This does not include engines certified to state emission standards that are different than the emission standards in this part.
	Vehicle has the meaning given in 40 CFR 1037.801.
	Vocational engine means an engine certified for use in vocational vehicles.  Where an engine family is certified for use in both tractors and vocational vehicles, "vocational engine" means an engine that the engine manufacturer reasonably believes will be (or has been) installed in a vocational vehicle.  Note that the provisions of this part may require a manufacturer to document how it determines that an engine is a vocational engine.
	Vocational vehicle means a vehicle meeting the definition of "vocational" vehicle in 40 CFR 1037.801.
	Void has the meaning given in 40 CFR 1068.30.
	We (us, our) means the Administrator of the Environmental Protection Agency and any authorized representatives.

§ 1036.805  Symbols, acronyms, and abbreviations. 
	The following symbols, acronyms, and abbreviations apply to this part:
ABT
averaging, banking, and trading.
AECD
auxiliary emission control device.
ASTM
American Society for Testing and Materials.
BTU
British thermal units.
CFR
Code of Federal Regulations.
CH4
methane.
CO
carbon monoxide.
CO2
carbon dioxide.
DF
deterioration factor.
DOT
Department of Transportation.
E85
gasoline blend including nominally 85 percent denatured ethanol.
EPA
Environmental Protection Agency.
FCL
Family Certification Level.
FEL
Family Emission Limit.
g/hp-hr
grams per brake horsepower-hour.
GEM
Greenhouse gas Emissions Model
GVWR
gross vehicle weight rating.
HC
hydrocarbon.
kg
kilogram.
kgC
kilogram carbon.
kW
kilowatts.
lb
pound.
lbC
pound carbon.
LPG
liquefied petroleum gas.
Mg
megagrams (10[6] grams, or one metric ton).
MJ
megajoules.
N2O
nitrous oxide.
NARA
National Archives and Records Administration.
NHTSA
National Highway Traffic Safety Administration.
NOx
oxides of nitrogen (NO and NO2).
NTE
not-to-exceed.
PM
particulate matter.
RESS
rechargeable energy storage system.
RMC
ramped-modal cycle
rpm
revolutions per minute.
SCR
Selective catalytic reduction.
U.S.
United States.
U.S.C.
United States Code.


§ 1036.810  Incorporation by reference.
(a) Certain material is incorporated by reference into this part with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that specified in this section, the Environmental Protection Agency must publish a notice of the change in the Federal Register and the material must be available to the public. All approved material is available for inspection at U.S. EPA, Air and Radiation Docket and Information Center, 1301 Constitution Ave., NW., Room B102, EPA West Building, Washington, DC 20460, (202) 202-1744, and is available from the sources listed below. It is also available for inspection at the National Archives and Records Administration (NARA).  For information on the availability of this material at NARA, call 202 - 741 - 6030, or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
(b) American Society for Testing and Materials, 100 Barr Harbor Drive, P.O. Box C700, West Conshohocken, PA, 19428-2959, (610) 832-9585, http://www.astm.org/.
   (1) ASTM D240 - 14 Standard Test Method for Heat of Combustion of Liquid Hydrocarbon Fuels by Bomb Calorimeter, approved October 1, 2014, IBR approved for §1036.530(b) ("ASTM D240").
   (2) ASTM D4809-13 Standard Test Method for Heat of Combustion of Liquid Hydrocarbon Fuels by Bomb Calorimeter (Precision Method), approved May 1, 2013, IBR approved for §1036.530(b) ("ASTM D4809").
   (3) ASTM D5291-10 Standard Test Methods for Instrumental Determination of Carbon, Hydrogen, and Nitrogen in Petroleum Products and Lubricants, approved May 1, 2010, IBR approved for §1036.530(b) ("ASTM D5291"). 

§ 1036.815  Confidential information. 
The provisions of 40 CFR 1068.10 apply for information you consider confidential.

§ 1036.820  Requesting a hearing. 
(a) You may request a hearing under certain circumstances, as described elsewhere in this part.  To do this, you must file a written request, including a description of your objection and any supporting data, within 30 days after we make a decision.
(b) For a hearing you request under the provisions of this part, we will approve your request if we find that your request raises a substantial factual issue.
(c) If we agree to hold a hearing, we will use the procedures specified in 40 CFR part 1068, subpart G.

§ 1036.825  Reporting and recordkeeping requirements. 
(a) This part includes various requirements to submit and record data or other information.  Unless we specify otherwise, store required records in any format and on any media and keep them readily available for eight years after you send an associated application for certification, or eight years after you generate the data if they do not support an application for certification.  You are expected to keep your own copy of required records rather than relying on someone else to keep records on your behalf.  We may review these records at any time.  You must promptly send us organized, written records in English if we ask for them. We may require you to submit written records in an electronic format. 
(b) The regulations in §1036.255 and 40 CFR 1068.25 and 1068.101 describe your obligation to report truthful and complete information.  This includes information not related to certification. Failing to properly report information and keep the records we specify violates 40 CFR 1068.101(a)(2), which may involve civil or criminal penalties.  
(c) Send all reports and requests for approval to the Designated Compliance Officer (see §1036.801).
(d) Any written information we require you to send to or receive from another company is deemed to be a required record under this section.  Such records are also deemed to be submissions to EPA.  Keep these records for eight years unless the regulations specify a different period.  We may require you to send us these records whether or not you are a certificate holder.
(e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), the Office of Management and Budget approves the reporting and recordkeeping specified in the applicable regulations.  The following items illustrate the kind of reporting and recordkeeping we require for engines and vehicles regulated under this part: 
   (1) We specify the following requirements related to engine certification in this part 1036:
      (i) In §1036.135 we require engine manufacturers to keep certain records related to duplicate labels sent to vehicle manufacturers.
      (ii) In subpart C of this part we identify a wide range of information required to certify engines.
      (iii) In subpart G of this part we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various special compliance provisions.  
      (iv) In §§1036.725, 1036.730, and 1036.735 we specify certain records related to averaging, banking, and trading.
    (2) We specify the following requirements related to testing in 40 CFR part 1065:
      (i) In 40 CFR 1065.2 we give an overview of principles for reporting information.
      (ii) In 40 CFR 1065.10 and 1065.12 we specify information needs for establishing various changes to published test procedures.
      (iii) In 40 CFR 1065.25 we establish basic guidelines for storing test information.
      (iv) In 40 CFR 1065.695 we identify the specific information and data items to record when measuring emissions.
    (3) We specify the following requirements related to the general compliance provisions in 40 CFR part 1068:
      (i) In 40 CFR 1068.5 we establish a process for evaluating good engineering judgment related to testing and certification.
      (ii) In 40 CFR 1068.25 we describe general provisions related to sending and keeping information
      (iii) In 40 CFR 1068.27 we require manufacturers to make engines available for our testing or inspection if we make such a request.
      (iv) In 40 CFR 1068.105 we require vehicle manufacturers to keep certain records related to duplicate labels from engine manufacturers.
      (v) In 40 CFR 1068.120 we specify recordkeeping related to rebuilding engines.
      (vi) In 40 CFR part 1068, subpart C, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various exemptions.
      (vii) In 40 CFR part 1068, subpart D, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to importing engines.
      (viii) In 40 CFR 1068.450 and 1068.455 we specify certain records related to testing production-line engines in a selective enforcement audit.
      (ix) In 40 CFR 1068.501 we specify certain records related to investigating and reporting emission-related defects.
      (x) In 40 CFR 1068.525 and 1068.530 we specify certain records related to recalling nonconforming engines.

57. Part 1037 is revised to read as follows:

PART 1037 -- CONTROL OF EMISSIONS FROM NEW HEAVY-DUTY MOTOR VEHICLES

Subpart A -- Overview and Applicability
1037.1  Applicability
1037.5  Excluded vehicles.
1037.10  How is this part organized?
1037.15  Do any other regulation parts apply to me?
1037.30  Submission of information.

Subpart B -- Emission Standards and Related Requirements 
1037.101  Overview of emission standards for heavy-duty vehicles.
1037.102  Exhaust emission standards for NOx, HC, PM, and CO.
1037.105  Exhaust emission standards for CO2 for vocational vehicles.
1037.106  Exhaust emission standards for CO2 for tractors above 26,000 pounds GVWR.
1037.107  Emission standards for trailers.
1037.115  Other requirements. 
1037.120  Emission-related warranty requirements.
1037.125  Maintenance instructions and allowable maintenance.
1037.135  Labeling.
1037.140  Determining vehicle parameters.
1037.150  Interim provisions.

Subpart C -- Certifying Vehicle families
1037.201  General requirements for obtaining a certificate of conformity.
1037.205  What must I include in my application?
1037.210  Preliminary approval before certification.
1037.220  Amending maintenance instructions.
1037.225  Amending applications for certification.
1037.230  Vehicle families, sub-families, and configurations.
1037.231  Powertrain families.
1037.241  Demonstrating compliance with exhaust emission standards for greenhouse gas pollutants.
1037.250  Reporting and recordkeeping.
1037.255  What decisions may EPA make regarding my certificate of conformity?

Subpart D --  Testing Production Vehicles and Engines
1037.301  Measurements related to GEM inputs in a selective enforcement audit.

Subpart E -- In-use Testing
1037.401  General provisions.

Subpart F -- Test and Modeling Procedures
1037.501  General testing and modeling provisions.
1037.510  Duty-cycle exhaust testing.
1037.515  Rear-axle efficiency test.
1037.520  Modeling CO2 emissions to show compliance.
1037.525  Aerodynamic measurements.
1037.527  Coastdown procedure for calculating drag area (CDA).
1037.529  Wind-tunnel procedure for calculating drag area (CDA).
1037.531  Using computational fluid dynamics to calculate drag area (CDA).
1037.533  Constant-speed procedure for for calculating drag area (CDA).
1037.540  Special procedures for testing hybrid vehicles with power take-off. 
1037.550  Powertrain testing.
1037.555  Special procedures for testing Phase 1 post-transmission hybrid systems.

Subpart G -- Special Compliance Provisions
1037.601  What compliance provisions apply to these vehicles?
1037.605  Provisions for using certified nonroad engines in heavy-duty vehicles.
1037.610  Vehicles with off-cycle technologies.
1037.615  Hybrid vehicles and other advanced technologies.
1037.620  Responsibilities for multiple manufacturers.
1037.621  Delegated assembly.
1037.622  Shipment of incomplete vehicles to secondary vehicle manufacturers.
1037.630  Special purpose tractors.
1037.631  Exemption for vocational vehicles intended for off-road use.
1037.635  Glider kits.
1037.640  Variable vehicle speed limiters. 
1037.645  In-use compliance with family emission limits (FELs).
1037.650  Tire manufacturers.
1037.655  Post-useful life vehicle modifications.
1037.660 Automatic engine shutdown systems.
1037.665 In-use tractor testing.

Subpart H -- Averaging, Banking, and Trading for Certification
1037.701  General provisions.
1037.705  Generating and calculating emission credits.
1037.710  Averaging.
1037.715  Banking.
1037.720  Trading.
1037.725  What must I include in my application for certification?
1037.730  ABT reports.
1037.735  Recordkeeping.
1037.740  Restrictions for using emission credits.
1037.745  End-of-year CO2 credit deficits.
1037.750  What can happen if I do not comply with the provisions of this subpart?
1037.755  Information provided to the Department of Transportation.

Subpart I -- Definitions and Other Reference Information
1037.801  Definitions. 
1037.805  Symbols, acronyms, and abbreviations. 
1037.810  Incorporation by reference.
1037.815  Confidential information.
1037.820  Requesting a hearing.
1037.825  Reporting and recordkeeping requirements. 

Appendix I to Part 1037  --  Heavy-duty Transient Chassis Test Cycle
Appendix II to Part 1037  --  Power Take-Off Test Cycle
Appendix III to Part 1037  --  Emission Control Identifiers
Appendix IV to Part 1037  --  Heavy-duty Grade Profile for Phase 2 Steady-State Test Cycles

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

Subpart A -- Overview and Applicability

§ 1037.1  Applicability
(a) This part contains standards and other regulations applicable to the emission of the air pollutant defined as the aggregate group of six greenhouse gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perflurocarbons, and sulfur hexafluoride.  The regulations in this part 1037 apply for all new heavy-duty vehicles, except as provided in §1037.5 and §1037.104.  This includes electric vehicles and vehicles fueled by conventional and alternative fuels. This also includes certain trailers as described in §§1037.5, 1037.150, and 1037.801.
(b) The provisions of this part also apply for alternative fuel conversions of all engines described in paragraph (a) of this section.

§ 1037.2  Who is responsible for compliance?
The regulations in this part 1037 contain provisions that affect both vehicle manufacturers and others. However, the requirements of this part are generally addressed to the vehicle manufacturer(s). The term "you" generally means the vehicle manufacturer(s), especially for issues related to certification.  Additional requirements and prohibitions apply to other persons as specified in §1037.601 and 40 CFR part 1068.

§ 1037.5  Excluded vehicles.
Except for the definitions specified in §1037.801, this part does not apply to the following vehicles:
(a) Vehicles not meeting the definition of "motor vehicle".
(b) Vehicles excluded from the definition of "heavy-duty vehicle" in §1037.801 because of vehicle weight, weight rating, and frontal area (such as light-duty vehicles and light-duty trucks).
(c) Vehicles produced in model years before 2014, unless they are certified under §1037.150. 
(d) Medium-duty passenger vehicles and other vehicles subject to the light-duty greenhouse gas standards of 40 CFR part 86.  See 40 CFR 86.1818 for greenhouse gas standards that apply for these vehicles.  An example of such a vehicle would be a vehicle meeting the definition of "heavy-duty vehicle" in §1037.801 and 40 CFR 86.1803, but also meeting the definition of "light truck" in 40 CFR 86.1818-12(b)(2).

(e) Vehicles subject to the heavy-duty greenhouse gas standards of 40 CFR part 86.  See 40 CFR 86.1819 for greenhouse gas standards that apply for these vehicles.  This generally applies for vehicles below 14,000 pounds GVWR that are certified as complete heavy-duty vehicles. 
(f) Aircraft meeting the definition of "motor vehicle".   For example, this would include certain convertible aircraft that can be adjusted to operate on public roads. Standards apply separately to certain aircraft engines, as described in 40 CFR part 87.
(g) Trailers meeting one or more of the following characteristics:
   (1) Trailers designed for in-field operations in logging or mining.
   (2) Trailers designed to operate at low speeds such that they are unsuitable for normal highway operation.
   (3) Trailers designed to perform their primary function while stationary, if they have permanently affixed components designed for heavy construction.  This would include crane trailers and concrete trailers.  Trailers would not qualify under this paragraph (g)(3) based on welding equipment or other components that are commonly used separate from trailers.
   (4) Trailers less than 35 feet long with three axles, and all trailers with four or more axles.
   (5) Trailers intended for temporary or permanent residence, office space, or other work space, such as campers, mobile homes, and carnival trailers.
   (6) Trailers built before January 1, 2018.
   (7) Note that the definition of trailer excludes equipment that serves similar purposes but are not intended to be pulled by a tractor.  
(h) Where it is unclear, you may ask us to make a determination regarding the exclusions identified in this section.  We recommend that you make your request before you produce the vehicle.

§ 1037.10  How is this part organized?
This part 1037 is divided into the following subparts:
(a) Subpart A of this part defines the applicability of part 1037 and gives an overview of regulatory requirements.
(b) Subpart B of this part describes the emission standards and other requirements that must be met to certify vehicles under this part.  Note that §1037.150 discusses certain interim requirements and compliance provisions that apply only for a limited time.
(c) Subpart C of this part describes how to apply for a certificate of conformity for vehicles subject to the standards of §1037.105 or §1037.106.
(d) [Reserved]
(e) Subpart E of this part addresses testing of in-use vehicles.
(f) Subpart F of this part describes how to test your vehicles and perform emission modeling (including references to other parts of the Code of Federal Regulations) for vehicles subject to the standards of §1037.105 or §1037.106. 
(g) Subpart G of this part and 40 CFR part 1068 describe requirements, prohibitions, and other provisions that apply to manufacturers, owners, operators, rebuilders, and all others.  Section 1037.601 describes how 40 CFR part 1068 applies for heavy-duty vehicles.
(h) Subpart H of this part describes how you may generate and use emission credits to certify vehicles that are subject to the standards of §1037.105 or §1037.106.
(i) Subpart I of this part contains definitions and other reference information.

§ 1037.15  Do any other regulation parts apply to me?
(a) Parts 1065 and 1066 of this chapter describe procedures and equipment specifications for testing engines and vehicles to measure exhaust emissions.  Subpart F of this part 1037 describes how to apply the provisions of part 1065 and part 1066 of this chapter to determine whether vehicles meet the exhaust emission standards in this part. 
(b) As described in §1037.601, certain requirements and prohibitions of part 1068 of this chapter apply to everyone, including anyone who manufactures, imports, installs, owns, operates, or rebuilds any of the vehicles subject to this part 1037.  Part 1068 of this chapter describes general provisions that apply broadly, but do not necessarily apply for all vehicles or all persons.  The issues addressed by these provisions include these seven areas:
	(1) Prohibited acts and penalties for manufacturers and others.
	(2) Rebuilding and other aftermarket changes.
	(3) Exclusions and exemptions for certain vehicles.
   (4) Importing vehicles.
	(5) Selective enforcement audits of your production.
	(6) Recall.
	(7) Procedures for hearings.
(c) [Reserved]
(d) Other parts of this chapter apply if referenced in this part.

§ 1037.30  Submission of information.
Send all reports and requests for approval to the Designated Compliance Officer (see §1037.801). See §1037.825 for additional reporting and recordkeeping provisions.


Subpart B -- Emission Standards and Related Requirements 
§ 1037.101  Overview of emission standards for heavy-duty vehicles.
(a) This part specifies emission standards for certain vehicles and for certain pollutants.  This part contains standards and other regulations applicable to the emission of the air pollutant defined as the aggregate group of six greenhouse gases: carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, perflurocarbons, and sulfur hexafluoride.  
(b) The regulated emissions are addressed in four groups:
   (1) Exhaust emissions of NOx, HC, PM, and CO.  These pollutants are sometimes described collectively as "criteria pollutants" because they are either criteria pollutants under the Clean Air Act or precursors to the criteria pollutant ozone.  These pollutants are also sometimes described collectively as "non-greenhouse gas pollutants", although they do not necessarily have negligible global warming potential.  As described in §1037.102, standards for these pollutants are provided in 40 CFR part 86.  
   (2) Exhaust emissions of CO2, CH4, and N2O.  These pollutants are described collectively in this part as "greenhouse gas pollutants" because they are regulated primarily based on their impact on the climate.  These standards are provided in §§1037.105 and 1037.106.
   (3) Hydrofluorocarbons. These pollutants are also "greenhouse gas pollutants" but are treated separately from exhaust greenhouse gas pollutants listed in paragraph (b)(2) of this section.  These standards are provided in §1037.115.
   (4) Fuel evaporative emissions. These requirements are described in § 1037.103.
 (c) The regulated heavy-duty vehicles are addressed in different groups as follows: 
   (1) For criteria pollutants, vehicles other than trailers are regulated based on gross vehicle weight rating (GVWR), whether they are considered "spark-ignition" or "compression-ignition," and whether they are first sold as complete or incomplete vehicles.  These groupings apply as described in 40 CFR part 86.
   (2) For greenhouse gas pollutants, vehicles are regulated in the following groups:
      (i)  Tractors above 26,000 pounds GVWR.
      (ii) All other vehicles with installed engines that are subject to standards under this part.  These other vehicles are referred to as "vocational" vehicles.
      (iii) Trailers are subject to standards as specified in §1037.107.
      (iv) The greenhouse gas emission standards in some cases apply differently for "spark-ignition" and "compression-ignition" engines or vehicles.  Engine requirements are similarly differentiated, as described in 40 CFR 1036.140.  In all cases, references in this part 1037 to "spark-ignition" or "compression-ignition" defer to the determination under 40 CFR 1036.140.  For example, any vehicle with an engine certified to spark-ignition standards under 40 CFR part 1036 is subject to requirements under this part 1037 that apply for spark-ignition vehicles. 
    (3) For evaporative and refueling emissions, vehicles are regulated based on the type of fuel they use.  Vehicles fueled with volatile liquid fuels or gaseous fuels are subject to evaporative emission standards.  Vehicles up to a certain size that are fueled with gasoline, diesel fuel, ethanol, methanol, or LPG are subject to refueling emission standards.  
      
§ 1037.102  Exhaust emission standards for NOx, HC, PM, and CO.
See 40 CFR part 86 for the exhaust emission standards for NOx, HC, PM, and CO that apply for heavy-duty vehicles.

§ 1037.103  Evaporative and refueling emission standards. 
(a) Applicability. Evaporative and refueling emission standards apply to heavy-duty vehicles as follows: 
   (1) Complete and incomplete heavy-duty vehicles at or below 14,000 pounds GVWR must meet evaporative and refueling emission standards as specified in 40 CFR part 86, subpart S, instead of the requirements specified in this section.  
   (2) Heavy-duty vehicles above 14,000 pounds GVWR that run on volatile liquid fuel (such as gasoline or ethanol) or gaseous fuel (such as natural gas or LPG) must meet evaporative and refueling emission standards as specified in this section. 
(b) Emission standards. The evaporative and refueling emission standards and measurement procedures specified in 40 CFR 86.1813 apply for vehicles above 14,000 pounds GVWR, except as described in this section.  The evaporative emission standards phase in over model years 2018 through 2022, with provisions allowing for voluntary compliance with the standards as early as model year 2015.  Count vehicles subject to standards under this section the same as heavy-duty vehicles at or below 14,000 pounds GVWR to comply with the phase-in requirements specified in 40 CFR 86.1813.  These vehicles may generate and use emission credits as described in 40 CFR part 86, subpart S, but only for vehicles that are tested for certification instead of relying on the provisions of paragraph (c) of this section.  The following provisions apply instead of what is specified in 40 CFR 86.1813:
   (1) The refueling standards in 40 CFR 86.1813(b) apply to complete vehicles starting in model year 2022; they are optional for incomplete vehicles.
   (2) The leak standard in 40 CFR 86.1813(a)(4) does not apply.
   (3) The FEL cap relative to the diurnal plus hot soak standard for low-altitude testing is 1.9 grams per test.
   (4) The diurnal plus hot soak standard for high-altitude testing is 2.3 grams per test.
   (5) Testing does not require measurement of exhaust emissions.  Disregard references in subpart B of this part to procedures, equipment specifications, and recordkeeping related to measuring exhaust emissions.  All references to the exhaust test under 40 CFR part 86, subpart B, are considered the "dynamometer run" as part of the evaporative testing sequence under this subpart. 
   (6) Vehicles not yet subject to the Tier 3 standards in 40 CFR 86.1813 must meet evaporative emission standards as specified in §§ 86.008-10(b)(1) and (2) for Otto-cycle applications and 86.007-11(b)(3)(ii) and (b)(4)(ii) for diesel-cycle applications.
(c) Compliance demonstration.  You may provide a statement in the application for certification that vehicles above 14,000 pounds GVWR comply with evaporative and refueling emission standards instead of submitting test data if you include an engineering analysis describing how vehicles include design parameters, equipment, operating controls, or other elements of design that adequately demonstrate that vehicles comply with the standards.  We would expect emission control components and systems to exhibit a comparable degree of control relative to vehicles that comply based on testing.  For example, vehicles that comply under this paragraph (c) should rely on comparable material specifications to limit fuel permeation, and components should be sized and calibrated to correspond with the appropriate fuel capacities, fuel flow rates, purge strategies, and other vehicle operating characteristics.  You may alternatively show that design parameters are comparable to those for vehicles at or below 14,000 pounds GVWR certified under 40 CFR part 86, subpart S.
(d) CNG refueling requirement. Compressed natural gas vehicles must meet the requirements for fueling connection devices as specified in 40 CFR 86.1813-17(f)(1).  Vehicles meeting these requirements are deemed to comply with evaporative and refueling emission standards.
(e) LNG refueling requirement. Liquefied natural gas vehicles must meet the requirements in Section 4.2 of SAE J2343  (incorporated by reference in §1037.810), which specifies that vehicles meet a five-day hold time after a refueling event before the fuel reaches the point of venting to relieve pressure.  This hold time starts immediately after a conventional refueling event corresponding to the vehicle's refueling fittings and other hardware, without any stabilization period to reach a different starting condition for the fuel in the tank.  The vehicle must remain parked away from direct sun with ambient temperatures between (20 and 30) °C throughout the measurement procedure.  This standard and procedure are consistent with Section 9.3.5 of NFPA 52, except that NFPA specifies a three-day hold time.  Vehicles meeting these requirements are deemed to comply with evaporative and refueling emission standards.  The provisions of this paragraph (e) are optional for vehicles produced before January 1, 2020.
(f) Incomplete vehicles. If you sell incomplete vehicles, you must identify the maximum fuel tank capacity for which you designed the vehicle's evaporative emission control system. 
(g) Useful life. Your vehicles must meet the evaporative emission standards of this section throughout their useful life, expressed in service miles or calendar years, whichever comes first. The useful life values for the standards of this section are described in 40 CFR 86.1805.
(h) Auxiliary engines and separate fuel systems. The provisions of this paragraph (g) apply for vehicles with auxiliary engines.  This includes any engines installed in the final vehicle configuration that contribute no motive power through the vehicle's transmission. 
   (1) Auxiliary engines and associated fuel-system components must be installed when testing complete vehicles.  If the auxiliary engine draws fuel from a separate fuel tank, you must fill the extra fuel tank before the start of diurnal testing as described for the vehicle's main fuel tank.  Use good engineering judgment to ensure that any nonmetal portions of the fuel system related to the auxiliary engine have reached stabilized levels of permeation emissions.  The auxiliary engine must not operate during the running loss test or any other portion of testing under this section.
   (2) For testing with incomplete vehicles, you may omit installation of auxiliary engines and associated fuel-system components as long as those components installed in the final configuration are certified to meet the applicable emission standards for Small SI equipment described in 40 CFR 1054.112 or for Large SI engines in 40 CFR 1048.105.  For any fuel-system components that you do not install, your installation instructions must describe this certification requirement.

§1037.104  Exhaust emission standards for CO2, CH4, and N2O for heavy-duty vehicles at or below 14,000 pounds GVWR.
Heavy-duty vehicles below 14,000 pounds GVWR must be certified to greenhouse gas standards under 40 CFR part 86, subpart S, if they are not certified as vocational vehicles under this part 1037.  See 40 CFR 86.1819 for detailed provisions that apply for these vehicles.

§ 1037.105  Exhaust emission standards for CO2 for vocational vehicles.
(a) The standards of this section apply for the following vehicles:
   (1) Vehicles above 14,000 pounds GVWR and at or below 26,000 pounds GVWR, but not certified to the vehicle standards in 40 CFR 86.1819.
   (2) Vehicles above 26,000 pounds GVWR that are not tractors.
   (3) Vocational tractors.
   (4) Heavy-duty vehicles at or below 14,000 pounds GVWR that are excluded from the standards in 40 CFR 86.1819  or that use engines certified under §1037.150(m). 
(b) CO2 standards apply as described in this paragraph (b).  The provisions of §1037.241 specify how to comply with these standards.
   (1) Model year 2027 and later vehicles are subject to CO2 standards corresponding to the selected subcategories as shown in the following table:
   
   Table 1 of §1037.105 -- Phase 2 CO2 Standards for Model Year 2027 and Later Vocational Vehicles (g/ton-mile)
                                  Engine Type
                                 Vehicle Size
                                Multi-Purpose 
                                   Regional 
                                     Urban
                             Compression-ignition
                                Class 2b  -  5
                                      280
                                      292
                                      272
                             Compression-ignition
                                 Class 6  -  7
                                      174
                                      170
                                      172
                             Compression-ignition
                                    Class 8
                                      183
                                      174
                                      182
                                Spark-ignition
                                Class 2b  -  5
                                      308
                                      321
                                      299
                                Spark-ignition
                                 Class 6  -  7
                                      191
                                      187
                                      189
                                Spark-ignition
                                    Class 8
                                      198
                                      188
                                      196
   
   (2) Model year 2024 through 2026 vehicles are subject to CO2 standards corresponding to the selected subcategories as shown in the following table:
   
   Table 2 of §1037.105 -- Phase 2 CO2 Standards for Model Year 2024 and Later Vocational Vehicles (g/ton-mile)
                                  Engine Type
                                 Vehicle Size
                                Multi-Purpose 
                                   Regional 
                                     Urban
                             Compression-ignition
                                Class 2b  -  5
                                      292
                                      304
                                      284
                             Compression-ignition
                                 Class 6  -  7
                                      181
                                      178
                                      179
                             Compression-ignition
                                    Class 8
                                      192
                                      182
                                      190
                                Spark-ignition
                                Class 2b  -  5
                                      321
                                      334
                                      312
                                Spark-ignition
                                 Class 6  -  7
                                      199
                                      196
                                      197
                                Spark-ignition
                                    Class 8
                                      210
                                      199
                                      208
   
   (3) Model year 2021 through 2023 vehicles are subject to CO2 standards corresponding to the selected subcategories as shown in the following table:
   
   Table 3 of §1037.105 -- Phase 2 CO2 Standards for Model Year 2021 through 2023 Vocational Vehicles (g/ton-mile)
                                  Engine Type
                                 Vehicle Size
                                Multi-Purpose 
                                   Regional 
                                     Urban
                             Compression-ignition
                                Class 2b  -  5
                                      305
                                      318
                                      296
                             Compression-ignition
                                 Class 6  -  7
                                      190
                                      186
                                      188
                             Compression-ignition
                                    Class 8
                                      200
                                      189
                                      198
                                Spark-ignition
                                Class 2b  -  5
                                      329
                                      343
                                      320
                                Spark-ignition
                                 Class 6  -  7
                                      205
                                      201
                                      203
                                Spark-ignition
                                    Class 8
                                      216
                                      204
                                      214
   
   (4) Model year 2014 through 2020 vehicles are subject to Phase 1 CO2 standards as shown in the following table:
   
   Table 4 to §1037.105 -- Phase 1 CO2 Standards for Model Year 2014 through 2020 Vocational Vehicles (g/ton-mile)
                                 Vehicle Size
                               CO2 Standard for
                             Model Years 2014-2016
                               CO2 Standard for
                           Model Year 2017 and later
                                 Class 2b - 5
                                      388
                                      373
                                  Class 6 - 7
                                      234
                                      225
                                    Class 8
                                      226
                                      222

   (5) You may certify model year 2021 and later emergency vehicles to the CO2 standards specified in Table 5 of this section instead of the standards specified in paragraphs (b)(1) and (2) of this section.  Vehicles certified to these alternative standards may not generate emission credits. 
   
   Table 5 of §1037.105 -- Alternative Phase 2 CO2 Standards for Emergency Vehicles (g/ton-mile)
                                 Vehicle Size
                                 CO2 Standard 
                                Class 2b  -  5
                                      321
                                 Class 6  -  7
                                      201
                                    Class 8
                                      213
   
(c) No CH4 or N2O standards apply under this section.  See 40 CFR part 1036 for CH4 or N2O standards that apply to engines used in these vehicles.
(d) You may generate or use emission credits under the ABT program as described in subpart H of this part.  This requires that you specify a Family Emission Limit (FEL) for CO2 for each vehicle subfamily.  The FEL may not be less than the result of emission modeling from §1037.520.  These FELs serve as the emission standards for the vehicle subfamily instead of the standards specified in paragraph (b) of this section.  
(e) Your vehicles must meet the exhaust emission standards of this section throughout their full useful life, expressed in service miles or calendar years, whichever comes first.  The following useful life values apply for the standards of this section: 
   (1) 150,000 miles or 15 years, whichever comes first, for Class 2b through Class 5 vehicles.  
   (2) 185,000 miles or 10 years, whichever comes first, for Class 6 and Class 7 vehicles.
   (3) 435,000 miles or 10 years, whichever comes first, for Class 8 vehicles.
(f) See §1037.631 for provisions that exempt certain vehicles used in off-road operation from the standards of this section.
(g) You may optionally certify a vocational vehicle to the standards and useful life applicable to a heavier vehicle service class (such as medium heavy-duty instead of light heavy-duty), provided you do not generate credits with the vehicle.  If you include lighter vehicles in a credit-generating subfamily (with an FEL below the standard), exclude their production volume from the credit calculation.  Note that if the subfamily is a credit-using subfamily, you must include the production volume of the lighter vehicles in the credit calculations.

§ 1037.106  Exhaust emission standards for CO2 for tractors above 26,000 pounds GVWR.
(a) The CO2 standards of this section apply for tractors above 26,000 pounds GVWR.  Note that the standards of this section do not apply for vehicles classified as "vocational tractors" under §1037.630,  
(b) The CO2 standards for tractors above 26,000 pounds GVWR are given in Table 1 of this section.  The provisions of §1037.241 specify how to comply with these standards.
Table 1 of § 1037.106 -- CO2 Standards for Class 7 and Class 8 Tractors by Model Year (g/ton-mile)
                                  Subcategory
                  Phase 1 Standards for Model Years 2014-2016
                  Phase 1 Standards for Model Years 2017-2020
                  Phase 2 Standards for Model Years 2021-2023
                 Phase 2 Standards for Model Years 2024-2026 
                Phase 2 Standards for Model Year 2027 and later
Class 7 Low-Roof 
(all cab styles)
                                      107
                                      104
                                      97
                                      90
                                      87
Class 7 Mid-Roof
(all cab styles)
                                      119
                                      115
                                      107
                                      100
                                      96
Class 7 High-Roof
(all cab styles)
                                      124
                                      120
                                      109
                                      101
                                      96
Class 8 Low-Roof Day Cab
                                      81
                                      80
                                      78
                                      72
                                      70
Class 8 Low-Roof Sleeper Cab
                                      68
                                      66
                                      70
                                      64
                                      62
Class 8 Mid-Roof Day Cab
                                      88
                                      86
                                      84
                                      78
                                      76
Class 8 Mid-Roof Sleeper Cab
                                      76
                                      73
                                      78
                                      71
                                      69
Class 8 High-Roof Day Cab
                                      92
                                      89
                                      86
                                      79
                                      76
Class 8 High-Roof Sleeper Cab
                                      75
                                      72
                                      77
                                      70
                                      67
Heavy-Haul Tractors
                                       -- 
                                       -- 
                                      54
                                      52
                                      51

(c) No CH4 or N2O standards apply under this section.  See 40 CFR part 1036 for CH4 or N2O standards that apply to engines used in these vehicles.
(d) You may generate or use emission credits under the ABT program, as described in subpart H of this part.  This requires that you calculate a credit quantity if you specify a Family Emission Limit (FEL) that is different than the standard specified in this section for a given pollutant.  The FEL may not be less than the result of emission modeling from §1037.520.  These FELs serve as the emission standards for the specific vehicle subfamily instead of the standards specified in paragraph (a) of this section.  
(e) Your vehicles must meet the exhaust emission standards of this section throughout their full useful life, expressed in service miles or calendar years, whichever comes first.  The following useful life values apply for the standards of this section: 
   (1) 185,000 miles or 10 years, whichever comes first, for vehicles at or below 33,000 pounds GVWR.
   (2) 435,000 miles or 10 years, whichever comes first, for vehicles above 33,000 pounds GVWR.
(f) You may optionally certify a tractor to the standards and useful life applicable to a heavier vehicle service class (such as heavy heavy-duty instead of medium heavy-duty), provided you do not generate credits with the vehicle. If you include lighter vehicles in a credit-generating subfamily (with an FEL below the standard), exclude its production volume from the credit calculation.  Note that if the subfamily is a credit-using subfamily, you must include the production volume of the lighter vehicles in the credit calculations.

§ 1037.107  Emission standards for trailers.
The exhaust emission standards specified in this section apply to trailers based on the effect of trailer designs on the performance of the trailer in conjunction with a tractor; this accounts for the effect of the trailer on the tractor's exhaust emissions, even though trailers themselves do not emit exhaust emissions.  
(a) Standards apply for trailers as follows:
   (1) Different levels of stringency apply for box vans depending on features that may affect aerodynamic performance.  You may optionally meet less stringent standards for different trailer types, which we characterize as follows:
      (i) "Non-aero trailers" for trailers 35 feet or longer are box vans that have a rear lift gate or rear hinged ramp, and at least one of the following side features: side lift gate, belly box, side-mounted pull-out platform, steps for side-door access, or a drop-deck design.  "Non-aero trailers" for trailers less than 35 feet long are refrigerated box vans with at least one of the side features identified for longer trailers.
       (ii) "Partial-aero trailers" are box vans that have at least one of the side features identified in paragraph (a)(1)(i) of this section.  Long box vans also qualify as partial-aero trailers if they have a rear lift gate or rear hinged ramp.
      (iii) "Full-aero trailers" are box vans that do not meet the specifications of either paragraph (a)(1)(i) or (ii) of this section.
   (2) CO2 standards apply for full-aero trailers as specified in the following table:
   Table 1 of § 1037.107 -- Phase 2 CO2 Standards for Trailers (g/ton-mile)
Model Year
                                    Dry Van
                               Refrigerated Van

                                     Short
                                     Long
                                     Short
                                     Long
2018-2020
                                      144
                                      83
                                      147
                                      84
2021-2023
                                      143
                                      81
                                      146
                                      82
2024-2026
                                      141
                                      79
                                      144
                                      79
2027+
                                      140
                                      77
                                      144
                                      77
   (3) Partial-aero trailers may continue to meet the 2024 standards in 2027 and later model years.  Note that this provision is not meaningful for short refrigerated vans, since their standard does not change in 2027. 
   (4) Non-box trailers and non-aero trailers must meet standards as follows:
      (i) Trailers must use qualified automatic tire inflation systems with all load-bearing wheels.
      (ii) Trailers must use tires with a TRRL at or below 4.7 kg/ton.  Through model year 2023, trailers may instead use tires with a TRRL at or below 5.1 kg/ton.
   (5) You may generate or use emission credits for averaging to demonstrate compliance with the standards specified in paragraph (a)(1) of this section as described in subpart H of this part.  This requires that you specify a Family Emission Limit (FEL) for CO2 for each vehicle subfamily.  The FEL may not be less than the result of emission modeling from §1037.520.  These FELs serve as the emission standards for the specific vehicle subfamily instead of the standards specified in paragraph (a) of this section.  You may not use averaging for non-box trailers, partial-aero trailers, or non-aero trailers, and you may not use emission credits for banking or trading for any trailers.
   (6) The provisions of §1037.241 specify how to comply with the standards of this section.  
(b) There are no Phase 1 standards for trailers. 
(c) No CH4, N2O, or HFC standards apply under this section.  
(d) Your vehicles must meet the emission standards of this section throughout a useful life of 10 years.
§ 1037.115  Other requirements. 
Vehicles required to meet the emission standards of this part must meet the following additional requirements, except as noted elsewhere in this part:
(a) Adjustable parameters.  Vehicles that have adjustable parameters must meet all the requirements of this part for any adjustment in the physically adjustable range.  We may require that you set adjustable parameters to any specification within the adjustable range during any testing.  See 40 CFR part 86 for information related to determining whether or not an operating parameter is considered adjustable.  You must ensure safe vehicle operation throughout the physically adjustable range of each adjustable parameter, including consideration of production tolerances.  Note that adjustable roof fairings are deemed not to be adjustable parameters.
(b) Prohibited controls.  You may not design your vehicles with emission control devices, systems, or elements of design that cause or contribute to an unreasonable risk to public health, welfare, or safety while operating.  For example, this would apply if the vehicle emits a noxious or toxic substance it would otherwise not emit that contributes to such an unreasonable risk.
(c) Emission diagnostic systems. You must design and produce your vehicles with compliant diagnostic systems as follows:
   (1) If you produce heavy-duty vehicles certified to meet criteria pollutant standards under 40 CFR part 86, subpart S, you must also certify that they meet diagnotic requirements as specified in 40 CFR 86.1806.
   (2) For other heavy-duty vehicles, you do not need to certify your vehicles' diagnostic systems or otherwise meet those standards.  However, manufacturers certifying their engines may depend on you to produce your vehicles according to their specifications.
(d) Defeat devices.  40 CFR 1068.101 prohibits the use of defeat devices.
(e) Air conditioning leakage. Loss of refrigerant from your air conditioning systems may not exceed a total leakage rate of 11.0 grams per year or a percent leakage rate of 1.50 percent per year, whichever is greater.  Calculate the total leakage rate in g/year as specified in 40 CFR 86.1867-12(a). Calculate the percent leakage rate as: [total leakage rate (g/yr)] / [total refrigerant capacity (g)] x 100.  Round your percent leakage rate to the nearest one-hundredth of a percent.  This paragraph (e) does not apply for refrigeration units installed on trailers or for refrigeration units on vocational vehicles that are limited to cooling cargo.
    (1)  For purposes of this requirement, "refrigerant capacity" is the total mass of refrigerant recommended by the vehicle manufacturer as representing a full charge.  Where full charge is specified as a pressure, use good engineering judgment to convert the pressure and system volume to a mass.
    (2) If your system uses a refrigerant other than HFC-134a that is listed as an acceptable substitute refrigerant for heavy-duty vehicles under 40 CFR part 82, subpart G, and the substitute refrigerant is identified in 40 CFR 86.1867-12(e), your system is deemed to meet the leakage standard in this paragraph (e) and the reporting requirement of §1037.205(c) does not apply.  If your system uses any other refrigerant that is listed as an acceptable substitute refrigerant for heavy-duty vehicles under 40 CFR part 82, subpart G, contact us for procedures for calculating the leakage rate in a way that appropriately accounts for the refrigerant's properties.
	
§ 1037.120  Emission-related warranty requirements.
(a) General requirements. You must warrant to the ultimate purchaser and each subsequent purchaser that the new vehicle, including all parts of its emission control system, meets two conditions:
   (1) It is designed, built, and equipped so it conforms at the time of sale to the ultimate purchaser with the requirements of this part.
   (2) It is free from defects in materials and workmanship that cause the vehicle to fail to conform to the requirements of this part during the applicable warranty period.
   (b) Warranty period. (1) Your emission-related warranty must be valid for at least:
      (i)  5 years or 50,000 miles for spark-ignition vehicles and Class 5 and lighter heavy-duty vehicles (except tires).
      (ii) 5 years or 100,000 miles for Class 6 through Class 8 heavy-duty vehicles (except tires).
      (iii) 5 years for trailers (except tires).
      (iv) 1 year for tires installed on trailers, and 2 years or 24,000 miles for all other tires.
   (2) You may offer an emission-related warranty more generous than we require.  The emission-related warranty for the vehicle may not be shorter than any basic mechanical warranty you provide to that owner without charge for the vehicle.  Similarly, the emission-related warranty for any component may not be shorter than any warranty you provide to that owner without charge for that component.  This means that your warranty for a given vehicle may not treat emission-related and nonemission-related defects differently for any component. The warranty period begins when the vehicle is placed into service.  
(c) Components covered. The emission-related warranty covers tires, vehicle speed limiters, idle shutdown systems, aerodynamic devices, automatic tire inflation systems, hybrid system components, to the extent such emission-related components that are included in your application for certification.  The emission-related warranty also covers other emission-related components to the extent they are included in your application for certification.  The emission-related warranty covers all components whose failure would increase a vehicle's emissions of air conditioning refrigerants (for vehicles subject to air conditioning leakage standards), and it covers all components whose failure would increase a vehicle's evaporative emissions (for vehicles subject to evaporative emission standards).  The emission-related warranty covers these components even if another company produces the component.  Your emission-related warranty does not need to cover components whose failure would not increase a vehicle's emissions of any regulated pollutant. 
(d) Limited applicability. You may deny warranty claims under this section if the operator caused the problem through improper maintenance or use, as described in 40 CFR 1068.115.
(e) Owners manual. Describe in the owners manual the emission-related warranty provisions from this section that apply to the vehicle.

§ 1037.125  Maintenance instructions and allowable maintenance.
Give the ultimate purchaser of each new vehicle written instructions for properly maintaining and using the vehicle, including the emission control system.  The maintenance instructions also apply to service accumulation on any of your emission-data vehicles.  See paragraph (i) of this section for requirements related to tire replacement.  Only the provisions of paragraph (h) of this section apply for trailers.
(a) Critical emission-related maintenance.  Critical emission-related maintenance includes any adjustment, cleaning, repair, or replacement of critical emission-related components.  This may also include additional emission-related maintenance that you determine is critical if we approve it in advance.  You may schedule critical emission-related maintenance on these components if you demonstrate that the maintenance is reasonably likely to be done at the recommended intervals on in-use vehicles.  We will accept scheduled maintenance as reasonably likely to occur if you satisfy any of the following conditions:
   (1) You present data showing that, if a lack of maintenance increases emissions, it also unacceptably degrades the vehicle's performance.
   (2) You present survey data showing that at least 80 percent of vehicles in the field get the maintenance you specify at the recommended intervals.
   (3) You provide the maintenance free of charge and clearly say so in your maintenance instructions. 
   (4) You otherwise show us that the maintenance is reasonably likely to be done at the recommended intervals.
 (b) Recommended additional maintenance.  You may recommend any additional amount of maintenance on the components listed in paragraph (a) of this section, as long as you state clearly that these maintenance steps are not necessary to keep the emission-related warranty valid.  If operators do the maintenance specified in paragraph (a) of this section, but not the recommended additional maintenance, this does not allow you to disqualify those vehicles from in-use testing or deny a warranty claim.  Do not take these maintenance steps during service accumulation on your emission-data vehicles.
(c) Special maintenance. You may specify more frequent maintenance to address problems related to special situations, such as atypical vehicle operation.  You must clearly state that this additional maintenance is associated with the special situation you are addressing.  We may disapprove your maintenance instructions if we determine that you have specified special maintenance steps to address vehicle operation that is not atypical, or that the maintenance is unlikely to occur in use.  If we determine that certain maintenance items do not qualify as special maintenance under this paragraph (c), you may identify this as recommended additional maintenance under paragraph (b) of this section. 
(d) Noncritical emission-related maintenance. Subject to the provisions of this paragraph (d), you may schedule any amount of emission-related inspection or maintenance that is not covered by paragraph (a) of this section (that is, maintenance that is neither explicitly identified as critical emission-related maintenance, nor that we approve as critical emission-related maintenance).  Noncritical emission-related maintenance generally includes maintenance on the components we specify in 40 CFR part 1068, Appendix I, that is not covered in paragraph (a) of this section.  You must state in the owners manual that these steps are not necessary to keep the emission-related warranty valid.  If operators fail to do this maintenance, this does not allow you to disqualify those vehicles from in-use testing or deny a warranty claim.  Do not take these inspection or maintenance steps during service accumulation on your emission-data vehicles.
(e) Maintenance that is not emission-related. For maintenance unrelated to emission controls, you may schedule any amount of inspection or maintenance.  You may also take these inspection or maintenance steps during service accumulation on your emission-data vehicles, as long as they are reasonable and technologically necessary.  You may perform this nonemission-related maintenance on emission-data vehicles at the least frequent intervals that you recommend to the ultimate purchaser (but not the intervals recommended for severe service).
(f) Source of parts and repairs. State clearly on the first page of your written maintenance instructions that a repair shop or person of the owner's choosing may maintain, replace, or repair emission control devices and systems.  Your instructions may not require components or service identified by brand, trade, or corporate name.  Also, do not directly or indirectly condition your warranty on a requirement that the vehicle be serviced by your franchised dealers or any other service establishments with which you have a commercial relationship.  You may disregard the requirements in this paragraph (f) if you do one of two things:
   (1) Provide a component or service without charge under the purchase agreement.  
   (2) Get us to waive this prohibition in the public's interest by convincing us the vehicle will work properly only with the identified component or service.
(g) [Reserved]
(h) Owners manual.  Explain the owner's responsibility for proper maintenance in the owners manual.
(i) Tire maintenance and replacement.  Include instructions that will enable the owner to replace tires so that the vehicle conforms to the original certified vehicle configuration.

§ 1037.130  Assembly instructions for secondary vehicle manufacturers. 
(a) If you sell a certified incomplete vehicle to a secondary vehicle manufacturer, give the secondary vehicle manufacturer instructions for completing vehicle assembly consistent with the requirements of this part.  Include all information necessary to ensure that the final vehicle assembly an engine will be in its certified configuration.  
(b) Make sure these instructions have the following information:
   (1) Include the heading: "Emission-related installation instructions".
   (2) State: "Failing to follow these instructions when completing assembly of a heavy-duty motor vehicle violates federal law, subject to fines or other penalties as described in the Clean Air Act."
   (3) Describe the necessary steps for installing any diagnostic system required under 40 CFR 1036.115.
   (4) Describe how your certification is limited for any type of application, as illustrated in the following examples:
      (i) If the incomplete vehicle is at or below 8,500 pounds GVWR, state that the vehicle's certification is valid under this part 1037 only if the final configuration has a vehicle curb weight above 6,000 pounds or basic vehicle frontal area above 45 square feet.  
      (ii) If your engine will be installed in a vehicle that you certify to meet diurnal emission standards using an evaporative canister, but you do not install the fuel tank, identify the maximum permissible fuel tank capacity.
   (5) Describe any other instructions to make sure the vehicle will operate according to design specifications in your application for certification.  
(c) Provide instructions in writing or in an equivalent format.  You may include this information with the incomplete vehicle document required by DOT.  If you do not provide the instructions in writing, explain in your application for certification how you will ensure that each installer is informed of the installation requirements. 

§ 1037.135  Labeling.
(a) Assign each vehicle a unique identification number and permanently affix, engrave, or stamp it on the vehicle in a legible way.  The vehicle identification number (VIN) serves this purpose.
(b) At the time of manufacture, affix a permanent and legible label identifying each vehicle.  The label must be - 
   (1) Attached in one piece so it is not removable without being destroyed or defaced.
   (2) Secured to a part of the vehicle needed for normal operation and not normally requiring replacement.
   (3) Durable and readable for the vehicle's entire life.
   (4) Written in English.
(c) The label must -- 
   (1) Include the heading "VEHICLE EMISSION CONTROL INFORMATION".
   (2) Include your full corporate name and trademark.  You may identify another company and use its trademark instead of yours if you comply with the branding provisions of 40 CFR 1068.45.
   (3) Include EPA's standardized designation for the vehicle family.
   (4) State the regulatory subcategory that determines the applicable emission standards for the vehicle family (see definition in §1037.801).  
   (5) State the date of manufacture [DAY (optional), MONTH, and YEAR]. You may omit this from the label if you stamp, engrave, or otherwise permanently identify it elsewhere on the vehicle, in which case you must also describe in your application for certification where you will identify the date on the vehicle.
    (6) Identify the emission control system.  Use terms and abbreviations as described in Appendix III to this part or other applicable conventions. Phase 2 tractors and Phase 2 vocational vehicles (other than those certified to standards for emergency vehicles) may omit this information.
   (7) Identify any requirements for fuel and lubricants that do not involve fuel-sulfur levels.
   (8) State: "THIS VEHICLE COMPLIES WITH U.S. EPA REGULATIONS FOR [MODEL YEAR] HEAVY-DUTY VEHICLES."
   (9) If you rely on another company to design and install fuel tanks in incomplete vehicles that use an evaporative canister for controlling diurnal emissions, include the following statement: "THIS VEHICLE IS DESIGNED TO COMPLY WITH EVAPORATIVE EMISSION STANDARDS WITH UP TO x GALLONS OF FUEL TANK CAPACITY." Complete this statement by identifying the maximum specified fuel tank capacity associated with your certification.
 (d) You may add information to the emission control information label to identify other emission standards that the vehicle meets or does not meet (such as European standards).  You may also add other information to ensure that the vehicle will be properly maintained and used.  
(e) You may ask us to approve modified labeling requirements in this part 1037 if you show that it is necessary or appropriate.  We will approve your request if your alternate label is consistent with the requirements of this part.

§ 1037.140  Determining vehicle parameters.
(a) Where applicable, a vehicle's roof height, a trailer's length, and tire radius are determined from nominal design specifications, as provided in this section.  Round the design values for roof height and trailer length to the nearest inch.  Round the design value for tire radius to the nearest 0.01 m.  
(b) Base roof height on fully inflated tires having a static loaded radius equal to the arithmetic mean of the largest and smallest static loaded radius of tires you offer or a standard tire we approve.
(c) Base trailer length on the outer dimensions of the load-carrying structure. Do not include aerodynamic devices or refrigeration or heating units.
(d) Base tire radius on loaded tires.  The radius is the perpendicular distance from the loaded tire's axis of rotation to the level surface on which the tire rests, at a stabilized temperature of (20 to 30) °C, with tires loaded to 85 % of the maximum value specified by the tire manufacturer, at the tire manufacturer's recommended air pressure at a rated-load condition.  
(e) The nominal design specifications must be within the range of the actual values from production vehicles considering normal production variability.  In the case of roof height, use the mean tire radius specified in paragraph (b) of this section.  If after production begins it is determined that your nominal design specifications do not represent production vehicles, we may require you to amend your application for certification under §1037.225.
(f) If your vehicle is equipped with an adjustable roof fairing, measure the roof height with the fairing in its lowest setting.

§ 1037.150  Interim provisions.
The provisions in this section apply instead of other provisions in this part.  
(a) Incentives for early introduction.  The provisions of this paragraph (a) apply with respect to vehicles produced in model years before 2014  Manufacturers may voluntarily certify  in model year 2013 (or earlier model years for electric vehicles) to the greenhouse gas standards of this part.  
   (1) This paragraph (a)(1) applies for regulatory subcategories subject to the standards of §1037.105 or §1037.106.  Except as specified in paragraph (a)(3) of this section,  to generate early credits under this paragraph for any vehicles other than electric vehicles, you must certify your entire U.S.-directed production volume within the regulatory subcategory to these standards.  Except as specified in paragraph (a)(4) of this section, if some vehicle families within a regulatory subcategory are certified after the start of the model year, you may generate credits only for production that occurs after all families are certified.  For example, if you produce three vehicle families in an averaging set and you receive your certificates for those families on January 4, 2013, March 15, 2013, and April 24, 2013, you may not generate credits for model year 2013 production in any of the families that occurs before April 24, 2013.  Calculate credits relative to the standard that would apply in model year 2014 using the equations in subpart H of this part. You may bank credits equal to the surplus credits you generate under this paragraph (a) multiplied by 1.50.  For example, if you have 1.0 Mg of surplus credits for model year 2013, you may bank 1.5 Mg of credits.  Credit deficits for an averaging set prior to model year 2014 do not carry over to model year 2014.  These credits may be used to show compliance with the standards of this part for 2014 and later model years.  We recommend that you notify EPA of your intent to use this provision before submitting your applications.
    (2) [Reserved] 
   (3) You may generate emission credits for the number of additional SmartWay designated tractors (relative to your 2012 production), provided you do not generate credits for those vehicles under paragraph (a)(1) of this section.  Calculate credits for each regulatory subcategory relative to the standard that would apply in model year 2014 using the equations in subpart H of this part.  Use a production volume equal to the number of designated model year 2013 SmartWay tractors minus the number of designated model year 2012 SmartWay tractors.  You may bank credits equal to the surplus credits you generate under this paragraph (a)(3) multiplied by 1.50.  Your 2012 and 2013 model years must be equivalent in length.
   (4) This paragraph (a)(4) applies where you do not receive your final certificate in a regulatory subcategory within 30 days of submitting your final application for that subcategory.  Calculate your credits for all production that occurs 30 days or more after you submit your final application for the subcategory. 
(b) [Reserved] (c) Provisions for small manufacturers.  Standards apply on a delayed schedule for manufacturers meeting the small business criteria specified in 13 CFR 121.201.  Apply the small business criteria for NAICS code 336120 for tractors and vocational vehicles and 336212 for trailers. Qualifying manufacturers are not subject to the greenhouse gas standards of §§1037.105 and 1037.106 for vehicles built before January 1, 2022,  Similarly, qualifying manufacturers are not subject to the greenhouse gas standards of §1037.107 for trailers built before January 1, 2019. In addition, qualifying manufacturers producing engines or vehicles that run on any fuel other than gasoline, E85, or diesel fuel may delay complying with every new standard under this part by one model year.  Qualifying manufacturers must notify the Designated Compliance Officer each model year before introducing these excluded vehicles into U.S. commerce.  This notification must include a description of the manufacturer's qualification as a small business under 13 CFR 121.201. You must label your excluded vehicles with the following statement: "THIS VEHICLE IS EXCLUDED UNDER 40 CFR 1037.150(c)." 
(d) Air conditioning leakage for vocational vehicles.  The air conditioning leakage standard of §1037.115 does not apply for model year 2020 and earlier vocational vehicles.  
(e) Model year 2014 N2O standards.  In model year 2014 and earlier, manufacturers may show compliance with the N2O standards using an engineering analysis.  This allowance also applies for later test groups or emission families carried over from model 2014 consistent with the provisions of 40 CFR 86.1839.  You may not certify to an N2O FEL different than the standard without measuring N2O emissions.
(f)	[Reserved] 
(g) Compliance date.  Compliance with the standards of this part is optional prior to January 1, 2014.  This means that if your 2014 model year begins before January 1, 2014, you may certify for a partial model year that begins on January 1, 2014 and ends on the day your model year would normally end.  You must label model year 2014 vehicles excluded under this paragraph (g) with the following statement: "THIS VEHICLE IS EXCLUDED UNDER 40 CFR 1037.150(g)." 
(h) Off-road vehicle exemption. In unusual circumstances, vehicle manufacturers may ask us to exempt vehicles under §1037.631 based on other criteria that are equivalent to those specified in §1037.631(a).  For example, we would normally not grant relief in cases where the vehicle manufacturer had credits or could otherwise comply with applicable standards.  Request approval for the exemption before you produce the subject vehicles.  Send your request with supporting information to the Designated Compliance Officer; we will coordinate with NHTSA in making a determination under §1037.210.  If you introduce into U.S. commerce vehicles that depend on our approval under this paragraph (h) before we inform you of our approval, those vehicles violate 40 CFR 1068.101(a)(1).
(i) Credit multiplier for advanced technology. If you generate credits from model year 2020 and earlier vehicles certified with advanced technology, you may multiply these credits by 1.50, except that you may not apply this multiplier in addition to the early-credit multiplier of paragraph (a) of this section.
(j) Limited prohibition related to early model year engines. The provisions of this paragraph (j) apply for model year 2017 and earlier vehicles subject to standards under this part.  See §1037.635 for alternative provisions that apply in later model years.  The prohibition in §1037.601 against introducing into U.S. commerce a vehicle containing an engine not certified to the standards of this part does not apply for vehicles using model year 2014 or 2015 spark-ignition engines, or any model year 2013 or earlier engines.  
(k) Verifying drag areas from in-use vehicles.  This paragraph (k) applies instead of §1037.401(b) through model year 2020.  We may measure the drag area of your vehicles after they have been placed into service.  To account for measurement variability, your vehicle is deemed to conform to the regulations of this part with respect to aerodynamic performance if we measure its drag area to be at or below the maximum drag area allowed for the bin above the bin to which you certified (for example, Bin II if you certified the vehicle to Bin III), unless we determine t	hat you knowingly produced the vehicle to have a higher drag area than is allowed for the bin to which it was certified. 
   (l) Optional certification under 40 CFR part 86.  You may certify certain complete or cab-complete vehicles to the GHG standards of 40 CFR 86.1819 based on testing with sister vehicles as specified in 40 CFR 86.1819-14(j).  
(m)  Loose engine sales.  Manufacturers may certify certain model year 2020 and earlier spark-ignition engines to emission standards under 40 CFR 1036.108 where they are identical to engines used in vehicles certified to the standards of 40 CFR 86.1819.  Vehicles in which those engines are installed are subject to standards under this part as specified in §1037.105.  See 40 CFR 86.1819(k)(8).  
(n) Streamlined preliminary approval for trailer devices.  Before January 1, 2018, manufacturers of aerodynamic devices for trailers may ask for preliminary EPA approval of compliance data for their devices based on qualifying for designation under the SmartWay program based on measured CDA values, whether or not that involves testing or other methods specified in §1037.525.  Trailer manufacturers may certify based on delta CDA values established under this paragraph (n) through model year 2020.  Manufacturers must perform testing as specified in subpart F of this part for any vehicles or aerodynamic devices not qualifying for approval under this paragraph (n).
(o) Design-based certification for trailers.  For model years 2018 through 2023, trailer manufacturers may certify their products using design-based certification instead of using the GEM simulation tool.  This involves submitting an application for certification describing how the trailers conform to all the design specifications described in this paragraph (o) that apply for the given model year.  Vehicles certified using design-based certification may not generate or use emission credits.  
   (1) Tires must have Tire Rolling Resistance Level at or below 5.1 kg/ton.  You may rely on a testing demonstration from the tire manufacturer, as described in subpart F of this part.  
   (2) Trailers must use qualified automatic tire inflation systems with all load-bearing wheels.  
   (3) Box vans must meet aerodynamic targets relative to the bin standards specified in §1037.520(b)(4) as described in this paragraph (o)(3).  You may rely on a testing demonstration from the aerodynamic device manufacturer, as described in §1037.211. 
      (i) Long box vans must achieve a delta CDA corresponding to Bin V or higher for model years 2021 through 2023, and a delta CDA corresponding to Bin V or higher for model years 2018 through 2020.  
(ii) Short box vans must achieve a delta CDA corresponding to Bin II or higher for model years 2021 through 2023.  (p) ABT reports.  Through model year 2017, you may submit a final report under §1037.730 up to 270 days after the end of the model year, as long as you send a draft report with the same information within 90 days after the end of the model year.
(q) Vehicle families for advanced and off-cycle technologies.  For tractors and vocational vehicles subject to Phase 1 standards, create separate vehicle families for vehicles that contain advanced or off-cycle technologies; group those vehicles together in a vehicle family if they use the same advanced or off-cycle technologies.
(r) Limited carryover from Phase 1 to Phase 2.  The provisions for carryover data in §1037.235(d) do not allow you to use aerodynamic test results from Phase 1 to support a compliance demonstration for Phase 2 certification. 
(s) Interim useful life for light heavy-duty vocational vehicles. Class 2b through Class 5 vocational vehicles certified to Phase 1 standards are subject to a useful life of 110,000 miles or 10 years, whichever comes first, instead of the useful life specified in §1037.105.  For emission credits generated from these Phase 1 vehicles, multiply any banked credits that you carry forward to demonstrate compliance with Phase 2 standards by 1.36.
(t) For tractors subject to Phase 1 standards, the default method for measuring drag area (CDA) is the coastdown procedure specified in 40 CFR part 1066, subpart D.  This includes preparing the tractor and the standard trailer with wheels meeting specifications of §1037.527(b) and submitting information related to your coastdown testing under §1037.527(j).
   
Subpart C -- Certifying Vehicle families
§ 1037.201  General requirements for obtaining a certificate of conformity.
(a) You must send us a separate application for a certificate of conformity for each vehicle family.  A certificate of conformity is valid from the indicated effective date until the end of the model year for which it is issued, which may not extend beyond December 31 of that year.  You must renew your certification annually for any vehicles you continue to produce.
(b) The application must contain all the information required by this part and must not include false or incomplete statements or information (see §1037.255).  
(c) We may ask you to include less information than we specify in this subpart, as long as you maintain all the information required by §1037.250.
(d) You must use good engineering judgment for all decisions related to your application (see 40 CFR 1068.5).
(e) An authorized representative of your company must approve and sign the application.
(f) See §1037.255 for provisions describing how we will process your application.
(g) We may perform confirmatory testing on your vehicles; for example, we may test vehicles to verify drag areas or other GEM inputs.  This includes tractors used to determine Falt-aero under § 1037.525.  We may require you to deliver your test vehicles to a facility we designate for our testing.  Alternatively, you may choose to deliver another vehicle that is identical in all material respects to the test vehicle, or another vehicle that we determine can appropriately serve as an emission-data vehicle for the family. Where certification is based on testing components such as tires, we may require you to deliver test components to a facility we designate for our testing. We may perform confirmatory testing on engines under 40 CFR part 1036 and may require you to apply modified fuel maps from that testing for certification under this part.
(h) The certification and testing provisions of 40 CFR part 86, subpart S, apply instead of the provisions of this subpart relative to the evaporative and refueling emission standards specified in §1037.103, except that §1037.245 describes how to demonstrate compliance with evaporative emission standards.
(i) Vehicles and installed engines must meet exhaust, evaporative, and refueling emission standards and certification requirements in 40 CFR part 86 or 40 CFR part 1036, as applicable.  Include the information described in 40 CFR part 86, subpart S, or §1036.205 in your application for certification in addition to what we specify in §1037.205 so we can issue a single certificate of conformity for all the requirements that apply for your vehicle and the installed engine. 

§ 1037.205  What must I include in my application?
This section specifies the information that must be in your application, unless we ask you to include less information under §1037.201(c).  We may require you to provide additional information to evaluate your application.  References to testing and emission-data vehicles refer to testing vehicles to measure aerodynamic drag and/or assess hybrid vehicle performance; these references also refer to engines or tires in the context of fuel maps and rolling-resistance measurements, respectively, and to any other items that require testing to establish GEM input values.
(a) Describe the vehicle family's specifications and other basic parameters of the vehicle's design and emission controls.  List the fuel type on which your tractors and vocational vehicles are designed to operate (for example, ultra low-sulfur diesel fuel).  
(b) Explain how the emission control system operates.  As applicable, describe in detail all system components for controlling greenhouse gas emissions, including all auxiliary emission control devices (AECDs) and all fuel-system components you will install on any production vehicle.  Identify the part number of each component you describe.  For this paragraph (b), treat as separate AECDs any devices that modulate or activate differently from each other.  Also describe your GEM modeling inputs as described in §1037.520, with the following additional information if it applies for your vehicles:
   (1) Describe your design for vehicle speed limiters, consistent with §1037.640.
   (2) Describe your design for predictive cruise control.
   (3) Describe your design for automatic engine shutdown systems, consistent with §1037.660.
   (4) Describe your engineering analysis demonstrating that your air conditioning compressor qualifies as a high-efficiency model as described in 40 CFR 86.1868-12(h)(5).
   (5) Describe your design for stop-start technology, including the logic for engine shutdown and the maximum duration of engine operation after the onset of any vehicle conditions described in §1037.520(f)(8)(iii).
   (6) Include measurements for vehicles with hybrid power takeoff systems.
(c) For vehicles subject to air conditioning standards, include:
   (1) The refrigerant leakage rates (leak scores).
   (2) The type of refrigerant and the refrigerant capacity of the air conditioning systems.
   (3) The corporate name of the final installer of the air conditioning system.
(d) Describe any vehicles you selected for testing and the reasons for selecting them.
(e) Describe any test equipment and procedures that you used, including any special or alternate test procedures you used (see §1037.501).  Include information describing the procedures you used to determine CDA values for tractors and trailers as specified in §1037.525.
(f) Describe how you operated any emission-data vehicle before testing, including the duty cycle and the number of vehicle operating miles used to stabilize the engine's emission levels.  Explain why you selected the method of service accumulation.  Describe any scheduled maintenance you did.
(g) Where applicable, list the specifications of any test fuel to show that it falls within the required ranges we specify in 40 CFR part 1065.
(h) Identify the vehicle family's useful life.
(i) Include the maintenance instructions and warranty statement you will give to the ultimate purchaser of each new vehicle (see §§1037.120 and 1037.125).
(j) Describe your emission control information label (see §1037.135).
(k) Identify the emission standards or FELs to which you are certifying vehicles in the vehicle family.  For families containing multiple subfamilies, this means that you must identify multiple CO2 FELs.  For example, you may identify the highest and lowest FELs to which any of your subfamilies will be certified and also list all possible FELs in between (which will be in 1 g/ton-mile increments).
(l) Where applicable, identify the vehicle family's deterioration factors and describe how you developed them.  Present any emission test data you used for this (see §1037.240 (c)).
(m) Where applicable, state that you operated your emission-data vehicles as described in the application (including the test procedures, test parameters, and test fuels) to show you meet the requirements of this part.
(n) [Reserved]
(o) Report GEM results as follows:
(1) For tractors and vocational vehicles, report modeling results for ten configurations.  Include modeling inputs and detailed descriptions of how they were derived.  Unless we specify otherwise, include the configuration with the highest modeling result, the lowest modeling result, and the configurations with the highest projected sales. 
(2) For trailers, report modeling results for the configurations with the highest and lowest GEM output values, and for the configuration with the highest projected sales.
(p) Where applicable, describe all adjustable operating parameters (see §1037.115), including production tolerances.  You do not need to include parameters that do not affect emissions covered by your application.  Include the following in your description of each parameter:
   (1) The nominal or recommended setting.
   (2) The intended physically adjustable range.
   (3) The limits or stops used to establish adjustable ranges.
   (4) Information showing why the limits, stops, or other means of inhibiting adjustment are effective in preventing adjustment of parameters on in-use vehicles to settings outside your intended physically adjustable ranges. 
(q) [Reserved]
(r) Unconditionally certify that all the vehicles in the vehicle family comply with the requirements of this part, other referenced parts of the CFR, and the Clean Air Act.
(s) Include good-faith estimates of U.S.-directed production volumes by subfamily.  We may require you to describe the basis of your estimates.
(t) Include the information required by other subparts of this part.  For example, include the information required by §1037.725 if you participate in the ABT program.
(u) Include other applicable information, such as information specified in this part or 40 CFR part 1068 related to requests for exemptions.
(v) Name an agent for service located in the United States.  Service on this agent constitutes service on you or any of your officers or employees for any action by EPA or otherwise by the United States related to the requirements of this part.

§ 1037.210  Preliminary approval before certification.
If you send us information before you finish the application, we may review it and make any appropriate determinations.  Decisions made under this section are considered to be preliminary approval, subject to final review and approval. We will generally not reverse a decision where we have given you preliminary approval, unless we find new information supporting a different decision. If you request preliminary approval related to the upcoming model year or the model year after that, we will make best-efforts to make the appropriate determinations as soon as practicable. We will generally not provide preliminary approval related to a future model year more than two years ahead of time.

§1037.211 Preliminary approval for manufacturers of aerodynamic devices.
(a) If you design or manufacture aerodynamic devices for trailers, you may ask us to provide preliminary approval for the measured performance of your devices.  While decisions made under this section are considered to be preliminary approval, we will not reverse a decision where we have given you preliminary approval, unless we find new information supporting a different decision.  For example, where we measure the performance of your device after giving you preliminary approval and its measured performance is less than your data indicated, we may rescind the preliminary approval of your test results.
(b) To request this, you must provide test data for delta CDA values as specified in §1037.150(n) or §1037.525.  If you want to establish delta CDA values for short trailers, you must establish separate values based on testing for each trailer length.  Trailer manufacturers may use approved delta CDA values as GEM inputs under §1037.520 to support their application for certification.  
(c) The following provisions apply for combining multiple devices under this section:
   (1) If the device manufacturer establishes a delta CDA value in a single test with multiple aerodynamic devices installed, trailer manufacturers may use that delta CDA value directly for the same combination of aerodynamic devices installed on production trailers.
   (2) You may combine delta CDA values for aerodynamic devices that are not tested together, as long as each device does not significantly impair the effectiveness of another, consistent with good engineering judgment.  Calculate a composite delta CDA value for multiple aerodynamic devices by applying the full delta CDA value for the device with the greatest aerodynamic improvement, adding the second-highest delta CDA value multiplied by 0.9, and adding any other delta CDA values multiplied by 0.8.  

§ 1037.220  Amending maintenance instructions.
You may amend your emission-related maintenance instructions after you submit your application for certification as long as the amended instructions remain consistent with the provisions of §1037.125.  You must send the Designated Compliance Officer a written request to amend your application for certification for a vehicle family if you want to change the emission-related maintenance instructions in a way that could affect emissions.  In your request, describe the proposed changes to the maintenance instructions.  If operators follow the original maintenance instructions rather than the newly specified maintenance, this does not allow you to disqualify those vehicles from in-use testing or deny a warranty claim.
(a) If you are decreasing or eliminating any specified maintenance, you may distribute the new maintenance instructions to your customers 30 days after we receive your request, unless we disapprove your request.  This would generally include replacing one maintenance step with another.  We may approve a shorter time or waive this requirement.
(b) If your requested change would not decrease the specified maintenance, you may distribute the new maintenance instructions anytime after you send your request.  For example, this paragraph (b) would cover adding instructions to increase the frequency of filter changes for vehicles in severe-duty applications.
(c) You need not request approval if you are making only minor corrections (such as correcting typographical mistakes), clarifying your maintenance instructions, or changing instructions for maintenance unrelated to emission control.  We may ask you to send us copies of maintenance instructions revised under this paragraph (c).

§ 1037.225  Amending applications for certification.
Before we issue you a certificate of conformity, you may amend your application to include new or modified vehicle configurations, subject to the provisions of this section. After we have issued your certificate of conformity, but before the end of the model year, you may send us an amended application requesting that we include new or modified vehicle configurations within the scope of the certificate, subject to the provisions of this section. Before the end of the model year, you must amend your application if any changes occur with respect to any information that is included or should be included in your application. After the end of the model year, you may amend your application only to update maintenance instructions as described in §1037.220 or to modify an FEL as described in paragraph (f) of this section.
(a) You must amend your application before you take any of the following actions:
   (1) Add a vehicle configuration to a vehicle family.  In this case, the vehicle configuration added must be consistent with other vehicle configurations in the vehicle family with respect to the criteria listed in §1037.230.
   (2) Change a vehicle configuration already included in a vehicle family in a way that may affect emissions, or change any of the components you described in your application for certification.  This includes production and design changes that may affect emissions any time during the vehicle's lifetime.
   (3) Modify an FEL for a vehicle family as described in paragraph (f) of this section.
(b) To amend your application for certification, send the relevant information to the Designated Compliance Officer.
   (1) Describe in detail the addition or change in the vehicle model or configuration you intend to make.
   (2) Include engineering evaluations or data showing that the amended vehicle family complies with all applicable requirements.  You may do this by showing that the original emission-data vehicle is still appropriate for showing that the amended family complies with all applicable requirements.
   (3) If the original emission-data vehicle or emission modeling for the vehicle family is not appropriate to show compliance for the new or modified vehicle configuration, include new test data or emission modeling showing that the new or modified vehicle configuration meets the requirements of this part. 
   (4) Include any other information needed to make your application correct and complete.
(c) We may ask for more test data or engineering evaluations.  You must give us these within 30 days after we request them. 
(d) For vehicle families already covered by a certificate of conformity, we will determine whether the existing certificate of conformity covers your newly added or modified vehicle.  You may ask for a hearing if we deny your request (see §1037.820).
(e) For vehicle families already covered by a certificate of conformity, you may start producing the new or modified vehicle configuration anytime after you send us your amended application and before we make a decision under paragraph (d) of this section.  However, if we determine that the affected vehicles do not meet applicable requirements, we will notify you to cease production of the vehicles and may require you to recall the vehicles at no expense to the owner.  Choosing to produce vehicles under this paragraph (e) is deemed to be consent to recall all vehicles that we determine do not meet applicable emission standards or other requirements and to remedy the nonconformity at no expense to the owner.  If you do not provide information required under paragraph (c) of this section within 30 days after we request it, you must stop producing the new or modified vehicles.
(f)  You may ask us to approve a change to your FEL in certain cases after the start of production.  The changed FEL may not apply to vehicles you have already introduced into U.S. commerce, except as described in this paragraph (f).  You may ask us to approve a change to your FEL in the following cases:
   (1) You may ask to raise your FEL for your vehicle subfamily at any time.  In your request, you must show that you will still be able to meet the emission standards as specified in subparts B and H of this part.  Use the appropriate FELs with corresponding production volumes to calculate emission credits for the model year, as described in subpart H of this part. 
   (2) Where testing applies, you may ask to lower the FEL for your vehicle subfamily only if you have test data from production vehicles showing that emissions are below the proposed lower FEL.  Otherwise, you may ask to lower your FEL for your vehicle subfamily at any time.  The lower FEL applies only to vehicles you produce after we approve the new FEL.  Use the appropriate FELs with corresponding production volumes to calculate emission credits for the model year, as described in subpart H of this part.
   (3) You may ask to add an FEL for your vehicle family at any time.
   
§ 1037.230  Vehicle families, sub-families, and configurations.
(a) For purposes of certifying your vehicles to greenhouse gas standards, divide your product line into families of vehicles based on regulatory subcategories as specified in this section.  Your vehicle family is limited to a single model year.
    (1) Apply subcategories for vocational vehicles as shown in Table 1 of this section.  This involves nine separate subcategories for Phase 2 vehicles to account for GVWR and the vehicle characteristics corresponding to the duty cycles for vocational vehicles as specified in §1037.510.  An additional subcategory applies for emergency vehicles covered under §1037.105(b)(4).  Divide Phase 1 vehicles into three GVWR-based vehicle classes as shown in Table 1 of this section, disregarding the specified duty cycles.  Table 1 follows:
    
    Table 1 of §1037.230 -- Vocational Vehicle Subcategories
                                  Class 2b-5
                                   Class 6-7
                                    Class 8
Urban
Urban
Urban
Multi-Purpose
Multi-Purpose
Multi-Purpose
Regional
Regional
Regional
    
    (2) Apply subcategories for tractors as shown in the following table: 
    
    Table 2 of §1037.230 --  Tractor Subcategories
                                    Class 7
                               Class 8 Day Cabs
                             Class 8 Sleeper Cabs
Low-roof tractors
Low-roof day cab tractors
Low-roof sleeper cab tractors
Mid-roof tractors
Mid-roof day cab tractors
Mid-roof sleeper cab tractors
High-roof tractors
High-roof day cab tractors
High-roof sleeper cab tractors
Vocational tractors
Vocational tractors
                                       -- 
Heavy-haul tractors (starting with Phase 2)
    
    (3) Apply subcategories for trailers as shown in the following table: 
    
    Table 3 of §1037.230 --  Trailer Subcategories
                              Full-aero trailers
                             Partial-aero Trailers
                                Other trailers
Long dry box vans
Long dry box vans
Non-aero trailers
Short dry box vans
Short dry box vans
Non-box trailers
Long refrigerated vans
Long refrigerated vans

Short refrigerated vans


       
(b) If the vehicles in your family are being certified to more than one FEL, subdivide your greenhouse gas vehicle families into subfamilies that include vehicles with identical FELs.  Note that you may add subfamilies at any time during the model year. 
(c) Group vehicles into configurations consistent with the definition of "vehicle configuration" in §1037.801.  Note that vehicles with hardware or software differences that are related to measured or modeled emissions are considered to be different vehicle configurations even if they have the same GEM inputs and FEL.  Note also, that you are not required to separately identify all configurations for certification.  See paragraph (g) of this section for provisions allowing you to group certain hardware differences into the same configuration.  Note that you are not required to identify all possible configurations for certification; also, you are required to include in your final report only those configurations you produced.
(d) You may combine dissimilar vehicles into a single vehicle family in special circumstances as follows:
   (1) For a vehicle model that includes a range of GVWR values that straddle weight classes, you may include all the vehicles in the same vehicle family if you certify the vehicle family to the numerically lower CO2 emission standard from the affected weight classes.  Vehicles that are optionally certified to a more stringent under this paragraph (d)(1) are subject to useful-life and all other provisions corresponding to the weight class with the numerically lower CO2 emission standard.
   (2) You may include refrigerated trailers in a vehicle family with dry vans; if you do this, all the trailers in the family are subject to the standards that apply for dry vans.  Similarly, you may include short trailers in a vehicle family with long trailers; if you do this, all the trailers in the family are subject to the standards that apply for long vans.  You may also include short refrigerated trailers in a vehicle family with long dry vans; if you do this, all the trailers in the family are subject to the standards that apply for long dry vans.  
(e) [Reserved]
(f)  You may divide your families into more families than specified in this section.
(g) You may ask us to allow you to group into the same configuration vehicles that have very small body hardware differences that do not significantly affect drag areas.  Note that this allowance does not apply for substantial differences, even if the vehicles have the same measured drag areas. 

§ 1037.231  Powertrain families
(a) If you choose to perform powertrain testing as specified in §1037.550, use good engineering judgment to divide your product line into powertrain families that are expected to have similar fuel consumptions and CO2 emission characteristics throughout the useful life. Your powertrain family is limited to a single model year.
(b) Except as specified in paragraph (c) of this section, group powertrains in the same powertrain family if they share all the following attributes:
   (1) Engine family.
   (2) The applicable simulated test vehicle category according to §1037.550(f): either Class 2b through 7, heavy-haul or Class 8 other than heavy-haul.
   (3) Number of clutches.
   (4) Type of clutch (e.g., wet or dry).
   (5) Presence and location of a fluid coupling such as a torque converter.
   (6) Gear configuration, as follows:
      (i) Planetary (e.g., simple, compound, meshed-planet, stepped-planet, multi-stage).
      (ii) Countershaft (e.g., single, double, triple).
      (iii) Continuously variable (e.g., pulley, magnetic, torroidal).
   (7) Number of available forward gears, and gear ratio for each available forward gear, if applicable.
   (8) Transmission oil sump configuration (e.g., conventional or dry).
   (9) The power transfer configuration of any hybrid technology (e.g., series or parallel).
   (10) The energy storage device and capacity of any hybrid technology (e.g., 10 MJ hydraulic accumulator, 10 kW-hr Lithium-ion battery pack, 10 MJ ultracapacitor bank).
   (11) The rated output of any hybrid mechanical power technology (e.g., 50 kW electric motor).
(c) For powertrains that share all the attributes described in paragraph (b) of this section, divide them further into separate powertrain families based on common calibration attributes.  Group powertrains in the same powertrain family to the extent that powertrain test results and corresponding emission levels are expected to be similar throughout the useful life.  
(d) You may subdivide a group of powertrains with shared attributes under paragraph (b) of this section into different powertrain families.
(e) In unusual circumstances, you may group powertrains into the same powertrain family even if they do not have shared attributes under in paragraph (b) of this section if you show that their emission characteristics throughout the useful life will be similar.

§ 1037.235  Testing requirements for certification. 
This section describes the emission testing you must perform to show compliance with respect to the greenhouse gas emission standards in subpart B of this part, and to any GEM inputs from §1037.520 that involve measured values.
(a) Select emission-data vehicles and components that represent production vehicles and components for the vehicle family consistent with the specifications in 1037.205(o).  In the case of powertrain testing under §1037.550, select a test engine and test transmission by considering the whole range of vehicle models covered by the powertrain family and the mix of duty cycles specified in §1037.510.
(b) Test your emission-data vehicles and emission-data components using the procedures and equipment specified in subpart F of this part.  Measure emissions (or other parameters, as applicable) using the specified procedures. 
(c) We may measure emissions (or other parameters, as appropriate) from any of your emission-data vehicles or emission-data components.
   (1) We may decide to do the testing at your plant or any other facility.  If we do this, you must deliver the vehicle or component to a test facility we designate.  The vehicle or component you provide must be in a configuration that is suitable for testing.  If we do the testing at your plant, you must schedule it as soon as possible and make available the instruments, personnel, and equipment we need.
   (2) If we measure emissions (or other parameters, as applicable) from your vehicle or component, the results of that testing become the official emission results for the vehicle or component.  Note that changing the official emission result does not necessarily require a change in the declared GEM input value.  Unless we later invalidate these data, we may decide not to consider your data in determining if your vehicle family meets applicable requirements.  This applies equally to powertrain testing under §1037.550, except that the results of our testing do not become the official emission result if our results are lower than your reported test results.  
   (3) Before we test one of your vehicles or components, we may set its adjustable parameters to any point within the physically adjustable ranges, if applicable.
   (4) Before we test one of your vehicles or components, we may calibrate it within normal production tolerances for anything we do not consider an adjustable parameter.  For example, this would apply for a vehicle parameter that is subject to production variability because it is adjustable during production, but is not considered an adjustable parameter (as defined in §1037.801) because it is permanently sealed. 
(d) You may ask to use carryover data from a previous model year instead of doing new tests, but only if all the following are true:
   (1) The vehicle family from the previous model year differs from the current vehicle family only with respect to model year or other characteristics unrelated to emissions.  We may waive this criterion for differences we determine not to be relevant.
   (2) The emission-data vehicle and emission-data components from the previous model year remain the appropriate emission-data vehicle and emission-data component under paragraph (b) of this section.
   (3) The data show that the emission-data vehicle and emission-data components would meet all the requirements that apply to the vehicle family covered by the application for certification.
(e) We may require you to test a second vehicle or component of the same configuration in addition to the vehicle or component tested under paragraph (a) of this section.
(f) If you use an alternate test procedure under 40 CFR 1065.10 and later testing shows that such testing does not produce results that are equivalent to the procedures specified in subpart F of this part, we may reject data you generated using the alternate procedure.

§ 1037.241  Demonstrating compliance with exhaust emission standards for greenhouse gas pollutants.
(a) For purposes of certification, your vehicle family is considered in compliance with the CO2 emission standards in §1037.105 through §1037.107 if all vehicle configurations in that family have modeled CO2 emission rates (as specified in subpart F of this part) at or below the applicable standards.  Note that your FELs are considered to be the applicable emission standards with which you must comply if you participate in the ABT program in subpart H of this part.  Your vehicle family is deemed not to comply if any vehicle configuration in that family has a modeled CO2 emission rate that is above its FEL.  
(b) In the case of trailer certification that does not rely on modeled CO2 emission rates, your vehicle family is considered in compliance with the emission standards if all vehicle configurations in that family meet specified design standards and have TRRL values at or below the specified standard and delta CDA values that meet or exceed the specified bin standard.  Your family is deemed not to comply for certification if it does not meet specified design standards or if any vehicle configuration in that family has a measured TRRL value above the specified standard or a delta CDA value that does not meet or exceed the specified bin standard. 
(c) We may require you to provide an engineering analysis showing that the performance of your emission controls will not deteriorate during the useful life with proper maintenance.  If we determine that your emission controls are likely to deteriorate during the useful life, we may require you to develop and apply deterioration factors consistent with good engineering judgment.  For example, you may need to apply a deterioration factor to address deterioration of battery performance for an electric hybrid vehicle.  Where the highest useful life emissions occur between the end of useful life and at the low-hour test point, base deterioration factors for the vehicles on the difference between (or ratio of) the point at which the highest emissions occur and the low-hour test point.  

§ 1037.243  Demonstrating compliance with evaporative emission standards.
(a) For purposes of certification, your vehicle family is considered in compliance with the evaporative emission standards in subpart B of this part if you prepare an engineering analysis showing that your vehicles in the family will comply with applicable standards throughout the useful life, and there are no test results from an emission-data vehicle representing the family that exceed an emission standard.
(b) Your evaporative emission family is deemed not to comply if your engineering analysis is not adequate to show that all the vehicles in the family will comply with applicable emission standards throughout the useful life, or if a test result from an emission-data vehicle representing the family exceeds an emission standard.
(c) To compare emission levels with emission standards, apply deterioration factors to the measured emission levels.  Establish an additive deterioration factor based on an engineering analysis that takes into account the expected aging from in-use vehicles.  
(d) Apply the deterioration factor to the official emission result, as described in paragraph (c) of this section, then round the adjusted figure to the same number of decimal places as the emission standard.  Compare the rounded emission levels to the emission standard for each emission-data vehicle. 
(e) Your analysis to demonstrate compliance with emission standards must take into account your design strategy for vehicles that require testing.  Specifically, vehicles above 14,000 pounds GVWR are presumed to need the same technologies that are required for heavy-duty vehicles at or below 14,000 pounds GVWR.  Similarly, your analysis to establish a deterioration factor must take into account your testing to establish deterioration factors for smaller vehicles.

§ 1037.250  Reporting and recordkeeping.
(a) Within 90 days after the end of the model year, send the Designated Compliance Officer a report including the total U.S.-directed production volume of vehicles you produced in each vehicle family during the model year (based on information available at the time of the report).  Report by vehicle identification number and vehicle configuration and identify the subfamily identifier.  Report uncertified vehicles sold to secondary vehicle manufacturers.  Small manufacturers may omit the reporting requirements of this paragraph (a).  
(b) Organize and maintain the following records:
   (1) A copy of all applications and any summary information you send us.
   (2) Any of the information we specify in §1037.205 that you were not required to include in your application.
   (3) A detailed history of each emission-data vehicle, if applicable.
   (4) Production figures for each vehicle family divided by assembly plant.
   (5) Keep a list of vehicle identification numbers for all the vehicles you produce under each certificate of conformity.   Also identify the technologies that make up the certified configuration for each vehicle your produce.
(c) Keep required data from emission tests and all other information specified in this section for eight years after we issue your certificate. If you use the same emission data or other information for a later model year, the eight-year period restarts with each year that you continue to rely on the information.
(d) Store these records in any format and on any media, as long as you can promptly send us organized, written records in English if we ask for them.  You must keep these records readily available.  We may review them at any time.  
(e) If you fail to properly keep records or to promptly send us information as required under this part, we may require that you submit the information specified in this section after each calendar quarter, and we may require that you routinely send us information that the regulation requires you to submit only if we request it.  If we find that you are fraudulent or grossly negligent or otherwise act in bad faith regarding information reporting and recordkeeping, we may require that you send us a detailed description of the certified configuration for each vehicle before you produce it.  

§ 1037.255  What decisions may EPA make regarding my certificate of conformity?
(a) If we determine your application is complete and shows that the vehicle family meets all the requirements of this part and the Act, we will issue a certificate of conformity for your vehicle family for that model year.  We may make the approval subject to additional conditions.  
(b) We may deny your application for certification if we determine that your vehicle family fails to comply with emission standards or other requirements of this part or the Clean Air Act.  We will base our decision on all available information.  If we deny your application, we will explain why in writing.
(c) In addition, we may deny your application or suspend or revoke your certificate if you do any of the following:
   (1) Refuse to comply with any testing or reporting requirements.
   (2) Submit false or incomplete information (paragraph (e) of this section applies if this is fraudulent).  This includes doing anything after submission of your application to render any of the submitted information false or incomplete.
   (3) Render any test data inaccurate.
   (4) Deny us from completing authorized activities (see 40 CFR 1068.20).  This includes a failure to provide reasonable assistance.
   (5) Produce vehicles for importation into the United States at a location where local law prohibits us from carrying out authorized activities.
   (6) Fail to supply requested information or amend your application to include all vehicles being produced.
   (7) Take any action that otherwise circumvents the intent of the Act or this part, with respect to your vehicle family.
(d) We may void the certificate of conformity for a vehicle family if you fail to keep records, send reports, or give us information as required under this part or the Act.  Note that these are also violations of 40 CFR 1068.101(a)(2).  
(e) We may void your certificate if we find that you intentionally submitted false or incomplete information.  This includes rendering submitted information false or incomplete after submission.
(f) If we deny your application or suspend, revoke, or void your certificate, you may ask for a hearing (see §1037.820).

Subpart D --  Testing Production Vehicles and Engines
§1037.301  Measurements related to GEM inputs in a selective enforcement audit.
(a) We may apply the requirements for selective enforcement audits in 40 CFR part 1068, subpart E, with respect to any GEM inputs in your application for certification.  This section describes how this applies uniquely in certain circumstances.
(b) A selective enforcement audit audit would consist of performing measurements with production vehicles relative to one or more declared values for GEM inputs, and using those measured values in place of your declared values to run GEM.  The vehicle is considered passing if the new modeled emission result for every applicable duty cycle is at or below the modeled emission result corresponding to the declared GEM inputs.  
(c) In the case of powertrain testing as specified in §1037.550, a selective enforcement audit would generally consist of performing a test with the engine and powertrain together.  We may alternatively allow you to test the engine on a dynamometer with no installed transmission, consistent with 40 CFR 1036.535.  Recreate the fuel map for each of three separate powertrains.  Generate weighted GEM results for each of ten separate configurations for each of the three selected powertrains.  Each unique test run for a given configuration with a particular powertrain constitutes a separate test for purposes of evaluating whether the vehicle family meets the pass-fail criteria under 40 CFR 1068.420.  The test result for a single test run in the audit is considered passing if it is at or below the value selected as an input for GEM.  Perform testing with up to ten separate configurations for additional powertrains as needed to reach a pass-fail decision under 40 CFR 1068.240.  For example, testing three powertrains over each of ten separate test runs would represent 30 tests; the family would have a pass result if 13 or fewer of the 30 tests are failing, and the family would have a fail result if 19 or more of the 30 tests are failing, and testing with an additional powertrain would be required if 14-18 of the 30 tests are failing.
(d) To perform a selective enforcement audit with respect to drag area, use the same method you used for certification; for tractors, we may instead require you to use the reference method specified in §1037.525.  For this paragraph (d), all measurements for tractors must include Faltaero and adjustments to account for wind-averaged drag as applicable under §1037.525.  The following provisions apply instead of 40 CFR 1068.420 for a selective enforcement audit with respect to drag area: 
   (1) Determine whether or not a vehicle fails to meet standards as follows:
      (i) For tractors and vocational vehicles, a failed vehicle is one whose measured drag area exceeds the maximum drag area corresponding to the bin you identified in your application for certification. 
      (ii) For trailers, a failed vehicle is a failed vehicle is one whose delta CDA based on measured values is less than the minimum drag area corresponding to the bin you identified in your application for certification.
    (2) Measure drag area for a minimum of two vehicles.  If one of those vehicles fails, measure drag area for two additional vehicles from the vehicle family. If both of those vehicles fail, measure drag area for four additional vehicles from the vehicle family.  You may perform testing on additional vehicles.
    (3) Determine whether a vehicle family passes or fails the audit as follows:
      (i) For tractors and vocational vehicles, you reach a pass decision for the audit if the arithmetic average value of the drag area for all tested vehicles is at or below the maximum value corresponding to the bin you identified in your application for certification.  You reach a fail decision for the audit if this average value is above the maximum value corresponding to the bin you identified in your application for certification.
      (ii) For trailers, you reach a pass decision for the audit if the arithmetic average value of delta CDA is at or above the minimum value corresponding to the bin you identified in your application for certification.  You reach a fail decision for the audit if this average value is below the minimum value corresponding to the bin you identified in your application for certification.
   (4) In the case of trailer certification that relies on data from a device manufacturer under §1037.211, we may require the device manufacturer to perform a selective enforcement audit as described in this paragraph (d).  Our test order will establish the equivalent of a vehicle family for performing tests for the audit.  If the audit leads to a fail result for the family, we may revoke our approval under §1037.211 as that relates to any future application for certification.  
   (5) If we test some of your vehicles in addition to your own testing, we may decide not to include your test results as official data for those vehicles if there is substantial disagreement between your testing and our testing. We will reinstate your data as valid if you show us that we made an error and your data are correct.  If we perform testing, we may choose to stop testing after any number of tests.
   (6) If we rely on our test data instead of yours, we will notify you in writing of our decision and the reasons we believe your facility is not appropriate for doing the tests we require under this paragraph (c).  You may request in writing that we consider your test results from the same facility for future testing if you show us that you have made changes to resolve the problem.
   (7) We may allow you to perform additional replicate tests with a given vehicle to reduce measurement variability, consistent with good engineering judgment.
(e) Apply selective enforcement audit provisions with respect to fuel maps as specified in 40 CFR 1036.301.
(f) We may suspend or revoke certificates, based on the outcome of a selective enforcement audit, for any appropriate configurations within one or more vehicle families. 

Subpart E -- In-use Testing
§ 1037.401  General provisions.
(a) We may perform in-use testing of any vehicle subject to the standards of this part.  For example, we may test vehicles to verify drag areas or other GEM inputs. 
(b) We may measure the drag area of a vehicle you produced after it has been placed into service.  We may use any of the procedures specified in §1037.525 for measuring drag area.  Your vehicle conforms to the regulations of this part with respect to aerodynamic performance if we measure its drag area to be at or below the maximum drag area allowed for the bin to which that configuration was certified.  

Subpart F -- Test and Modeling Procedures
§ 1037.501  General testing and modeling provisions.
This subpart specifies how to perform emission testing and emission modeling required elsewhere in this part. 
(a) [Reserved] 
(b) Where exhaust emission testing is required, use the equipment and procedures in 40 CFR part 1066 to determine whether your vehicles meet the duty-cycle emission standards in subpart B of this part. Measure the emissions of all the exhaust constituents subject to emission standards as specified in 40 CFR part 1066. Use the applicable duty cycles specified in §1037.510.
(c) [Reserved]
(d) Use the applicable fuels specified 40 CFR part 1065 to perform valid tests.
   (1) For service accumulation, use the test fuel or any commercially available fuel that is representative of the fuel that in-use vehicles will use.
   (2) For diesel-fueled vehicles, use the appropriate diesel fuel specified for emission testing.  Unless we specify otherwise, the appropriate diesel test fuel is ultra low-sulfur diesel fuel.  
   (3) For gasoline-fueled vehicles, use the gasoline specified for "General Testing".
(e) You may use special or alternate procedures as specified in 40 CFR 1065.10.
(f) This subpart is addressed to you as a manufacturer, but it applies equally to anyone who does testing for you, and to us when we perform testing to determine if your vehicles meet emission standards.
(g) Apply this paragraph (g) whenever we specify the use of standard trailers.  Unless otherwise specified, a tolerance of +-2 inches applies for all nominal trailer dimensions.
   (1) The standard trailer for high-roof tractors must meet the following criteria:  
      (i) It is an unloaded two-axle dry van box trailer 53.0 feet long, 102 inches wide, and 162 inches high (measured from the ground with the trailer level).  
      (ii) It has a king pin located with its center 36+-0.5 inches from the front of the trailer and a minimized trailer gap (no greater than 45 inches).
      (iii) It has a smooth surface with nominally flush rivets and, except as specified in paragraph (g)(1)(v) of this section, does not include any aerodynamic features such as side fairings, rear fairings, or gap reducers.  It may have a scuff band of no more than 0.13 inches in thickness. 
      (iv) It includes dual 22.5 inch wheels, standard mudflaps, and standard landing gear.  The centerline of the rear tandem axle must be 146+-4 inches from the rear of the trailer.
      (v) For the Phase 2 standards, include side skirts meeting the specifications of this paragraph (g)(1)(v).  The side skirts must be mounted flush with the sides of the trailer, with the leading edge 118+-4 inches from the front of the trailer, a length along the top edge of 341+-4 inches, a length along the bottom edge of 264-345 inches, a height of 36+-2 inches of rigid material at the skirt midpoint.  We may approve your request to use a skirt with different dimensions if these specified values are impractical or inappropriate for your test trailer, and you propose alternative dimensions that provide an equivalent or comparable degree of aerodynamic drag for your test configuration.
    (2) The standard trailer for mid-roof tractors is an empty two-axle tanker trailer 42+-1 feet long by 140 inches high.  
      (i) It has a 40+-1 feet long cylindrical tank with a 7000+-7 gallon capacity, smooth surface, and rounded ends.  
      (ii) The standard tanker trailer does not include any aerodynamic features such as side fairings, but does include a centered 20 inch manhole, side-centered ladder, and lengthwise walkway. It includes dual 24.5 inch wheels.
   (3) The standard trailer for low-roof tractors is an unloaded two-axle flat bed trailer 53+-1 feet long and 102 inches wide.  
      (i) The deck height is 60.0+-0.5 inches in the front and 55.0+-0.5 inches in the rear. The standard trailer does not include any aerodynamic features such as side fairings. 
      (ii) It includes an air suspension and dual 22.5 inch wheels on tandem axles spread up to 122 inches apart between axle centerlines, measured along the length of the trailer.  
(h) Use a standard tractor for measuring aerodynamic drag of trailers.  Standard tractors must be certified at Bin III or better for Phase 1 or Phase 2 under §1037.520(b)(1) or (3). The standard tractor for long trailers is a Class 8 high-roof sleeper cab.  The standard tractor for short trailers is a Class 8 high-roof day cab. 
      
§ 1037.510  Duty-cycle exhaust testing.
This section applies where exhaust emission testing is required, such as when applying the provisions of §1037.615.  Note that for most vehicles, testing under this section is not required.
(a) Where applicable, measure emissions by testing the vehicle on a chassis dynamometer with the applicable duty cycles. Each duty cycle consists of a series of speed commands over time: variable speeds for the transient test and constant speeds for the cruise tests.  None of these cycles include vehicle starting or warmup.
   (1) Perform testing as follows for Phase 1 vehicles:
      (i) Transient cycle.  The transient cycle is specified in Appendix I of this part.  Warm up the vehicle. Start the duty cycle within 30 seconds after concluding the warm-up procedure.  Start sampling emissions at the start of the duty cycle.
      (ii) Cruise cycle.  For the 55 mph and 65 mph cruise cycles, warm up the vehicle at the test speed, then sample emissions for 300 seconds while maintaining vehicle speed within +-1.0 mph of the speed setpoint. 
   (2) Perform testing as follows for Phase 2 vehicles:
      (i) Transient cycle.  The transient cycle is specified in Appendix I of this part.  Warm up the vehicle by operating over one transient cycle.  Within 30 seconds after concluding the warm up cycle, start emission sampling while the vehicle operates over the duty cycle.  The warm-up cycle can be one of the other 8 or 9 tests for record.
      (ii) Cruise cycle.  The grade portion of the route corresponding to the 55 mph and 65 mph cruise cycles is specified in Appendix IV of this part.  Warm up the vehicle by operating it within +-2.0 mph of the speed setpoint over the duty cycle.  Within 30 seconds after concluding the warm-up cycle, start emission sampling while the vehicle operates over the duty cycle, maintaining vehicle speed within +-1.0 mph of the speed setpoint.  The warm-up cycle can be one of the other 8 or 9 tests for record.
      (iii) Idle cycle.  Perform testing with the idle cycle for Phase 2 vocational vehicles. Warm up the vehicle by operating it at 65+-2.0 mph for 600 seconds.  Within 60 seconds after concluding the warm-up cycle, set the engine to operate at idle speed for 600 seconds, with the brake applied and the transmission in drive (or clutch depressed for manual transmission).  Record speed and torque and measure either CO2 emissions according to 40 CFR part 1066 throughout the sampling period, recording the mean values.
(b) Calculate the official emission result from the following equation:


Where:
eCO2comp = total composite mass of CO2 emissions in g/ton-mile, rounded to the nearest whole number.
PL = the standard payload, in tons, as specified in §1037.705.
 = mean composite weighted driven vehicle speed, excluding idle operation, as shown in Table 1 of this section for Phase 2 vocational vehicles.  For other vehicles, let  = 1.
w[cycle] = weighting factor for the appropriate test cycle, as shown in Table 1 of this section.
m[cycle] = CO2 mass emissions over each test cycle (other than idle), in g/test.
D[cycle] = the total driving distance for the indicated drive cycle.  Use 2.84 miles for the transient cycle, and use 12.5 miles for both of the cruise cycles. 
 = CO2 emission rate at idle, in g/hr.
Example: 
Class 8 vocational vehicle meeting the Phase 2 standards based on the Regional duty cycle.
PL = 7.5 tons
 = 28.1 mph
wtransient = 50 % = 0.50
w55 = 28 % = 0.28
w65 = 22 % = 0.22
widle = 10 % = 0.10
mtransient = 6184.7 g
m55 = 5260.0 g
m65 = 7452.5 g
Dtransient = 2.84
D55 = 12.5
D65 = 12.5
 = 11707 g/hr


(c) Apply weighting factors specific to each type of vehicle and for each duty cycle as follows:
   (1) For tractors, select weighting factors for day cabs or sleeper cabs as appropriate.
   (2) Apply universal weighting factors for Phase 1 vocational vehicles as shown in Table 1 of this section.  For Phase 2 vocational vehicles, select the most appropriate duty cycle for modeling emission results with each vehicle configuration.  The default is the Multipurpose Duty Cycle.  You may need to instead select the Regional Duty Cycle or the Urban Duty Cycle as follows:
      (i) Except as specified in paragraph (c)(2)(iii) of this section, use the Regional Duty Cycle for each configuration meeting any of the following characteristics:
         (A) The vehicle configuration as modeled in GEM reaches a speed of 65 miles per hour at less than 75 % of maximum test speed for compression-ignition engines, and at less than 45 % maximum test speed for spark-ignition engines, when operating in the highest available transmission gear.  Maximum test speed is the highest speed from the engine's fuel map.
         (B) The vehicle is intended to be used as an intercity bus.
         (C) The vehicle is intended to be used for temporary housing, such as for camping.
         (D) The engine was certified based on testing only with the ramped-modal cycle.
      (ii) Except as specified in paragraph (c)(2)(iii) of this section, use the Urban Duty Cycle for each configuration meeting any of the following characteristics:
         (A) The vehicle configuration as modeled in GEM does not reach a speed of 55 miles per hour before the engine is at or above 90 % of maximum test speed for compression-ignition engines, and at or above 50 % maximum test speed for spark-ignition engines, when operating in the highest available transmission gear.
         (B) The vehicle has a hybrid powertrain.
      (iii) You may ask us to make a different determination with respect to the duty cycle than we specify in this paragraph (c)(2) if you can demonstrate that a different duty cycle is more appropriate for a certain vehicle configuration.
   (3) Use the values for weighting factors and average speed in the following table to properly simulate the appropriate duty cycle:
                                       
           Table 1 of §1037.510 -- Weighting Factors for Duty Cycles

                               Distance-weighted
                                 Time-weighted
                      Average Speed While Moving,  (mph)

                                   Transient
                                 55 mph Cruise
                                 65 mph Cruise
                                     Idle
                                   Non-idle
                                       
Day Cabs
                                      19%
                                      17%
                                      64%
                                       -- 
                                       -- 
                                       -- 
Sleeper Cabs
                                      5%
                                      9%
                                      86%
                                       -- 
                                       
                                       -- 
Vocational -- Multi-Purpose
                                      82%
                                      15%
                                      3%
                                      15%
                                      85%
                                     20.9
Vocational -- Regional
                                      50%
                                      28%
                                      22%
                                      10%
                                      90%
                                     28.1
Vocational -- Urban
                                      94%
                                      6%
                                      0%
                                      20%
                                      80%
                                     19.2
Vocational Hybrid Vehicles (Phase 1 only)
                                      75%
                                      9%
                                      16%
                                       -- 
                                       -- 
                                       -- 
Vocational with conventional powertrain (Phase 1 only)
                                      42%
                                      21%
                                      37%
                                       -- 
                                       -- 
                                       -- 

(d) For transient testing, compare actual second-by-second vehicle speed with the speed specified in the test cycle and ensure any differences are consistent with the criteria as specified in 40 CFR part 1066.  If the speeds do not conform to these criteria, the test is not valid and must be repeated.
(e) Run test cycles as specified in 40 CFR part 86.  For cruise cycle testing of vehicles equipped with cruise control, use the vehicle's cruise control to control the vehicle speed.  For vehicles equipped with adjustable VSLs, test the vehicle with the VSL at its highest setting.
(f) Test the vehicle using its adjusted loaded vehicle weight, unless we determine this would be unrepresentative of in-use operation as specified in 40 CFR 1065.10(c)(1).
(g) For hybrid vehicles, correct for the net energy change of the energy storage device as described in 40 CFR 1066.501.

§ 1037.515  Rear-axle efficiency test.
This section describes a procedure for mapping rear-axle efficiency.  This procedure may be used to determine GEM input values or to evaluate alternative gear oils. 
(a) Prepare an axle assembly for testing as follows:
   (1) Select a newly manufactured axle assembly housing.
   (2) If you have a family of axle assemblies with different gear ratios, you may test multiple configurations using a common axle housing.
   (3) Install the axle with an input shaft angle perpendicular to the axle.
      (i) If the axle assembly has a locking differential, lock the main differential and test it with one electric motor on the input shaft and a second electric motor on the output side of the output shaft that has the speed-reduction gear attached to it.
      (ii) If an axle assembly has an open differential, use an alternate method to lock the differential for testing.
      (iii) For drive-through tandem-axle setups, lock the longitudinal and inter-wheel differentials.
   (4) Add gear lubricant according to the axle manufacturer's instructions.  Use gear lubricant meeting the specification for BASF Emgard FE 2986 as described in "Emgard[(R)] FE 75W-90 Fuel Efficient Synthetic Gear Lubricant" (incorporated by reference in § 1037.810).  Use this gear lubricant for all axle operation under this section.
   (5) Install equipment for measuring the bulk temperature of the gear lubricant in the oil sump or a similar location.  
   (6) Break in the axle assembly by warming it up until the gear lubricant is as least 85 °C, and then operating it for 77 minutes at an angular wheel speed of 246 rpm at each of three differential torque settings, 25 %, 50 %, and 75 %, in sequence, where differential torque is expressed as a percentage of the axle manufacturer's torque rating.  Maintain gear lubricant temperature at 90+-5 °C throughout the warm-up period.
   (7) Drain and refill the gear lubricant following the break-in procedure.
(b) Measure input and output speeds and torques as described in 40 CFR 1065.210(b).  Calibrate and verify measurement instruments according to 40 CFR part 1065, subpart C.  Record all data, including bulk oil temperature, at a minimum of 256 Hz.
(c) The test matrix consists of torque and wheel speed values meeting the following specifications:
   (i) Input torque values range from 1,000 to 4,000 N∙m in 1,000 N∙m increments; also include a test point with an output torque of 0 N∙m.
   (ii) Determine maximum wheel speed corresponding to a vehicle speed of 65 mph based on the smallest tire that will be used with the axle.  Use wheel speeds for testing that include maximum wheel speed, 50 rpm, and intermediate speeds in 100-rpm increments up to maximum wheel speed (150, 250, etc.).  You may omit the last 100-rpm increment if it is within 10 rpm of the maximum wheel speed, and instead test at maximum wheel speed for the last test point.
   (iii) The average of measured values corresponding to each separate torque-measurement point must be within +- 1 N∙m of the setpoint for input torque, and within +- 1 rpm of the setpoint for output speed.  
(d) Determine rear-axle efficiency using the following procedure:
   (1) Maintain ambient temperature between (20 and 30) °C throughout testing.  Measure ambient temperature within 1.0 m of the axle assembly.  Measure and record temperature periodically over the course of the test.
   (2) Maintain gear lubricant temperature at 82+-1 °C. You may use external heating and cooling as needed.
   (3) Warm up the axle by operating it at maximum wheel speed and at zero output torque until the gear lubricant is within the specified temperature range.
   (4) Continue operating at maximum wheel speed and zero output torque for at least 300 seconds, then measure the input torque, output torque, and wheel speed for at least 300 seconds, recording the average values for all three parameters.  Repeat this stabilization and measurement sequence sequentially for higher torque setpoints from the test matrix while holding wheel speed constant.  Repeat the stabilization and measurement sequence at the same wheel speed from highest to lowest torque.  This results in two measurements at each torque setting.  Perform the stabilization and measurement sequence again in a sequence from low to high torque values, then from high to low torque values, all at the same wheel speed, resulting in four measurements at each torque setting.  Calculate an arithmetic average value for input torque, output torque, and engine speed at each torque setting. 
   (5) Decrease wheel speed to the next lower speed setting and repeat the torque sweep described in paragraph (d)(4) of this section to determine input torque, output torque, and engine speed results for all the torque settings at the new wheel speed.  Repeat this process in order of decreasing wheel speed until the mapping is complete for all points in the test matrix.  If the test is aborted before completing the map, invalidate all the measurements made at that wheel speed.  Once the problem has been resolved, warm up the axle as described in paragraph (d)(3) of this section and continue with measurements from the wheel speed where you stopped testing.
(e) Calculate the torque loss, Tloss, at each point from the test matrix using the following equation:
   Tloss = Tin ∙ igear  -  Tout
   
   Where:
   Tin = input torque.
   igear = the axle gear ratio, expressed to at least the nearest 0.001.
   Tout = the output torque.
   
   Example:
   Tin = 1000.0  N∙m
   igear = 3.731
   Tout = 3695.1 N∙m
   Tloss = 1000.0 ∙ 3.731  -  3695.1 = 35.9 N∙m

§ 1037.520  Modeling CO2 emissions to show compliance.
This section describes how to use the Greenhouse gas Emissions Model (GEM) simulation tool (incorporated by reference in § 1037.810) to show compliance with the CO2 standards of §§ 1037.105, 1037.106, and 1037.107. Use good engineering judgment when demonstrating compliance using GEM.
(a) General modeling provisions.  To run GEM, enter all applicable inputs as specified by the model.
   (1) GEM inputs apply for Phase 1 and Phase 2 tractors and vocational vehicles as follows:
      (i) Regulatory subcategory (see §1037.230).
      (ii) Coefficient of aerodynamic drag or drag area, as described in paragraph (b) of this section (tractors only).  
      (iii) Steer tire rolling resistance, as described in paragraph (c) of this section.
      (iv) Drive tire rolling resistance, as described in paragraph (c) of this section.
      (v) Vehicle speed limit, as described in paragraph (d) of this section (tractors only). 
      (vi) Vehicle weight reduction, as described in paragraph (e) of this section (tractors only for Phase 1).  
      (vii) Credit for idle-reduction strategies, as described in paragraph (f) of this section (only for Class 8 sleeper cabs and Phase 2 vocational vehicles).  
   (2) Additional GEM inputs apply for Phase 2 tractors and vocational vehicles as follows: 
      (i) Transmission make, model, and type.  Also identify the gear ratio for every available forward gear to two decimal places.  
      (ii) Engine make, model, fuel type, engine family name, calibration identification.  Also identify whether the engine is subject to spark-ignition or compression-ignition standards under 40 CFR part 1036.
      (iii) Drive axle ratio.  If a vehicle is designed with two or more user-selectable axle ratios, use the axle ratio that is expected to be engaged for the greatest driving distance.
      (iv) Various engine and vehicle operational characteristics, as described in paragraph (f) of this section.
      (v) Engine fuel map, as described in paragraph (g) of this section.  Include an idle fuel map for vocational vehicles.
      (vi) Engine full-load torque curve and motoring torque curve, as described in paragraph (h) of this section.
      (vii) Loaded tire radius, based on your nominal design specifications, expressed to the nearest 0.01 m (see §1037.140).
      (viii) Vehicles with hybrid power take-off, as described in paragraph (j) of this section (vocational vehicles only).
    (3) Apply the following GEM inputs for trailers:
      (i) Regulatory subcategory.
      (ii) Delta CDA, as described in paragraph (b) of this section.
      (iii) Tire rolling resistance, as described in paragraph (c) of this section.
      (iv) Vehicle weight reduction, as described in paragraph (e) of this section. 
      (v) Inclusion of a qualified automatic tire inflation system.
   (4) You may certify your vehicles based on powertrain testing as described in §1037.550, rather than fuel maps, to characterize fuel consumption rates at different speed and torque values as follows:
      (i) Compliance based on powertrain testing is required for hybrid electric vehicles and all vehicles with a transmission that is not automatic, automated manual, manual, or dual-clutch.  Compliance based on powertrain testing is optional for all other vehicles.
      (ii) GEM inputs associated with powertrain testing are limited to the test data from §1037.550, powertrain test configuration (dynamometer connected to transmission out or wheel hub), powertrain family and the transmission calibration.  You do not need to identify or provide inputs for gear ratios, fuel map data, or engine torque curves, which would otherwise be required under paragraph (a)(2) of this section.  
   (5) If you certify emergency vehicles to the alternative standards specified in §1037.105(b)(4), run GEM by identifying the vehicle as an emergency vehicle and enter values for tire rolling resistance as specified in paragraph (c) of this section.  GEM requires no additional data entry for qualifying emergency vehicles.  
   (6) You may use a default fuel map for specialty vehicles using engines certified to alternate standards under §1037.605 and for glider kits certified under §1037.635.
   (7) If your vehicle runs on a fuel other than gasoline or diesel fuel, use good engineering judgment to adjust modeling output values to account for the physical properties of the fuel.
(b) Coefficient of aerodynamic drag and drag area.  Determine the appropriate drag area, CDA, as described in this paragraph (b).  Use the recommended method or an alternate method to establish a value for CDA, expressed in m[2].  Round CDA, values to one decimal place for tractors and vocational vehicles, and to two decimal places for trailers.  Where we allow you to group multiple configurations together, measure CDA of the worst-case configuration.  Measure CDA  as specified in §1037.525.  Determine CDA inputs for tractors as described in paragraphs (b)(1) through (3) of this section.  Determine the delta CDA inputs for trailers as described in paragraph (b)(4) of this section.  
   (1) Except as specified in paragraph (b)(2) of this section, determine the Phase 1 bin level for your tractor based on CDA as shown in the following tables:
   
      Table 1 of § 1037.520 --  CD inputs for Phase 1 High-Roof Tractors
                                 Tractor Type
                                   Bin Level
                     If your measured CDA (m[2]) is . . .
                          Then your CD input is . . .
                              High-Roof Day Cabs
                                     Bin I
                                    >= 8.0
                                     0.79
                                       
                                    Bin II
                                    7.1-7.9
                                     0.72
                                       
                                    Bin III
                                    6.2-7.0
                                     0.63
                                       
                                    Bin IV
                                    5.6-6.1
                                     0.56
                                       
                                     Bin V
                                    <= 5.5
                                     0.51
                            High-Roof Sleeper Cabs
                                     Bin I
                                    >= 7.6
                                     0.75
                                       
                                    Bin II
                                    6.8-7.5
                                     0.68
                                       
                                    Bin III
                                    6.3-6.7
                                     0.60
                                       
                                    Bin IV
                                    5.6-6.2
                                     0.52
                                       
                                     Bin V
                                    <=5.5
                                     0.47
   
    Table 2 of §1037.520 --  CD inputs for Phase 1 Low-Roof and Mid-Roof Tractors
                                 Tractor Type
                                   Bin Level
                     If your measured CDA (m[2]) is . . .
                          Then your CD input is . . .
                         Low-Roof Day and Sleeper Cabs
                                     Bin I
                                    >= 5.1
                                     0.77
                                       
                                    Bin II
                                    <= 5.0
                                     0.71
                         Mid-Roof Day and Sleeper Cabs
                                     Bin I
                                    >= 5.6
                                     0.87
                                       
                                    Bin II
                                    <= 5.5
                                     0.82
   
   (2) For Phase 1 low- and mid-roof tractors, you may instead determine your drag area bin based on the drag area bin of an equivalent high-roof tractor.  If the high-roof tractor is in Bin I or Bin II, then you may assume your equivalent low- and mid-roof tractors are in Bin I.  If the high-roof tractor is in Bin III, Bin IV, or Bin V, then you may assume your equivalent low- and mid-roof tractors are in Bin II.
   (3) For Phase 2 tractors other than heavy-haul tractors, determine bin levels and CDA inputs as follows:
      (i) Determine bin levels for high-roof tractors based on aerodynamic test results as described in the following table:
      
      Table 3 of § 1037.520 -- Bin determinations for Phase 2 High-Roof Tractors Based on Aerodynamic Test Results (CDA in m[2])
Tractor Type
                                     Bin I
                                    Bin II
                                    Bin III
                                    Bin IV
                                     Bin V
                                    Bin VI
                                    Bin VII
Day Cabs
                                    >7.5
                                    6.8-7.4
                                    6.2-6.7
                                    5.6-6.1
                                    5.1-5.5
                                    4.7-5.0
                                    <4.6
Sleeper Cabs
                                    >7.3
                                    6.6-7.2
                                    6.0-6.5
                                    5.4-5.9
                                    4.9-5.3
                                    4.5-4.8
                                    <4.4
      
      (ii) For low- and mid-roof tractors, you may determine your bin level based on aerodynamic test results as described in Table 4 of this section, or based on the bin level of an equivalent high-roof tractor as shown in Table 5 of this section. 
      
      Table 4 of § 1037.520 -- Bin determinations for Phase 2 Low-Roof and Mid-Roof Tractors Based on Aerodynamic Test Results (CDA in m[2])
Tractor Type
                                     Bin I
                                    Bin II
                                    Bin III
                                    Bin IV
Low-Roof Cabs
                                    >5.1
                                    4.6-5.0
                                    4.2-4.5
                                    <4.1
Mid-Roof Cabs
                                    >6.5
                                    6.0-6.4
                                    5.6-5.9
                                    <5.5
      
       Table 5 of § 1037.520 -- Bin determinations for Phase 2 Low- and Mid-Roof Tractors Based on Eqivalent High-Roof Tractors
                  If your equivalent high-roof tractor is...
            then the corresponding low- and mid-roof tractors is...
                                     Bin I
                                     Bin I
                                    Bin II
                                     Bin I
                                    Bin III
                                    Bin II
                                    Bin IV
                                    Bin II
                                     Bin V
                                    Bin III
                                    Bin VI
                                    Bin III
                                    Bin VII
                                    Bin IV
       
      (iii) Determine the CDA input according to the tractor's bin level as described in the following table:
      
   Table 6 of § 1037.520 -- Phase 2 CDA Tractor Inputs Based on Bin Level
Tractor Type
                                     Bin I
                                    Bin II
                                    Bin III
                                    Bin IV
                                     Bin V
                                    Bin VI
                                    Bin VII
High-Roof Day Cabs
                                      7.6
                                      7.1
                                      6.5
                                      5.8
                                      5.3
                                      4.9
                                      4.5
High-Roof Sleeper Cabs
                                      7.4
                                      6.9
                                      6.3
                                      5.6
                                      5.1
                                      4.7
                                      4.3
Low-Roof Cabs
                                      5.3
                                      4.8
                                      4.3
                                      4.0
                                       -- 
                                       -- 
                                       -- 
Mid-Roof Cabs
                                      6.7
                                      6.2
                                      5.7
                                      5.4
                                       -- 
                                       -- 
                                       -- 

   (4) For Phase 2 trailers, determine bin levels and drag-related GEM inputs based on aerodynamic test results as described in the following table:
    Table 7 of § 1037.520 -- Bin determinations for Trailers Based on Aerodynamic Test Results (CDA in m[2]) 
                  If a trailer's measured delta CDA is ...
                            it is designated as ...
                 and the following inputs apply for delta CDA 
                                   < 0.09
                                     Bin I
                                      0.0
                                  0.10 - 0.19
                                    Bin II
                                      0.1
                                  0.20 - 0.39
                                    Bin III
                                      0.3
                                 0.40  -  0.59
                                    Bin IV
                                      0.5
                                 0.60  -  0.79
                                     Bin V
                                      0.7
                                 0.80  -  1.19
                                    Bin VI
                                      1.0
                                 1.20  -  1.59
                                    Bin VII
                                      1.4
                                   >1.60
                                   Bin VIII
                                      1.8

(c) Steer, drive, and trailer tire rolling resistance.  You must have a tire rolling resistance level (TRRL) for each tire configuration.  For purposes of this section, you may consider tires with the same SKU number to be the same configuration.
   (1) Measure tire rolling resistance in kg per metric ton as specified in ISO 28580 (incorporated by reference in §1037.810), except as specified in this paragraph (c).  Use good engineering judgment to ensure that your test results are not biased low.  You may ask us to identify a reference test laboratory to which you may correlate your test results.  Prior to beginning the test procedure in Section 7 of ISO 28580 for a new bias-ply tire, perform a break-in procedure by running the tire at the specified test speed, load, and pressure for 60+-2 minutes.
   (2) For each tire design tested, measure rolling resistance of at least three different tires of that specific design and size.  Perform the test at least once for each tire.  Use the arithmetic mean of these results as your test result.  You may use this value as your GEM input or select a higher TRRL.  You must test at least one tire size for each tire model, and may use engineering analysis to determine the rolling resistance of other tire sizes of that model.  Note that for tire sizes that you do not test, we will treat your analytically derived rolling resistances the same as test results, and we may perform our own testing to verify your values.  We may require you to test a small sub-sample of untested tire sizes that we select.
   (3) If you obtain your test results from the tire manufacturer or another third party, you must obtain a signed statement from the party supplying those test results to verify that tests were conducted according to the requirements of this part.  Such statements are deemed to be submissions to EPA.
   (4) For tires marketed as light truck tires and that have load ranges C, D, or E, use as the GEM input TRRL at or above the measured rolling resistance multiplied by 0.87. 
(d) Vehicle speed limit.  If the vehicles will be equipped with a vehicle speed limiter, input the maximum vehicle speed to which the vehicle will be limited (in miles per hour rounded to the nearest 0.1 mile per hour) as specified in §1037.640.  Otherwise leave this field blank.  Use good engineering judgment to ensure the limiter is tamper resistant.  We may require you to obtain preliminary approval for your designs.
(e) Vehicle weight reduction.  Develop a weight-reduction as a GEM input as described in this paragraph (e).  For purposes of this paragraph (e), high-strength steel is steel with tensile strength at or above 350 MPa.
   (1) Vehicle weight reduction inputs for wheels are specified relative to dual-wide tires with conventional steel wheels. For purposes of this paragraph (e)(1), a light-weight aluminum alloy wheel is one that weighs at least 21 pounds less than a comparable conventional steel wheel. The inputs are listed in Table 8 to this section. For example, a tractor or vocational vehicle with aluminum steer wheels and eight (4x2) dual-wide aluminum drive wheels would have an input of 210 pounds (2x21 + 8x21). 
   
            Table 8 to §1037.520 -- Wheel-Related Weight Reductions
                          Weight Reduction Technology
                               Weight Reduction 
                            (lb per tire or wheel)
   Wide-Based Single Drive Tire or Wide-Based Single Trailer Tire with . . .
                                  Steel Wheel
                                      84
                                       
                                Aluminum Wheel
                                      139
                                       
                       Light-Weight Aluminum Alloy Wheel
                                      147
    Steer Tire, Dual-wide Drive Tire, or Dual-wide Trailer Tire with . . .
                           High-Strength Steel Wheel
                                       8
                                       
                                Aluminum Wheel
                                      21
                                       
                       Light-Weight Aluminum Alloy Wheel
                                      30
   
   (2) Vehicle weight reduction inputs for components other than wheels are specified in the following tables: 
Table 9 to §1037.520 -- Nonwheel-Related Weight Reductions From Alternative Materials for Tractors (pounds)
Weight Reduction Technologies
                                   Aluminum 
                             High-Strength Steel 
                                 Thermoplastic
Door
                                      20
                                       6
                                       
Roof
                                      60
                                      18
                                       
Cab rear wall
                                      49
                                      16
                                       
Cab floor
                                      56
                                      18
                                       
Hood Support Structure System
                                      15
                                       3
                                       
Hood and Front Fender 
                                       
                                       
                                      65
Day Cab Roof Fairing 
                                       
                                       
                                      18
Sleeper Cab Roof Fairing 
                                      75
                                      20
                                      40
Aerodynamic Side Extender 
                                       
                                       
                                      10
Fairing Support Structure System
                                      35
                                       6
                                       
Instrument Panel Support Structure
                                       5
                                       1
                                       
Brake Drums  -  Drive (4)
                                      140
                                      11
                                       
Brake Drums  -  Non Drive (2)
                                      60
                                       8
                                       
Frame Rails
                                      440
                                      87
                                       
Crossmember  -  Cab
                                      15
                                       5
                                       
Crossmember  -  Suspension
                                      25
                                       6
                                       
Crossmember  -  Non Suspension (3)
                                      15
                                       5
                                       
Fifth Wheel
                                      100
                                      25
                                       
Radiator Support
                                      20
                                       6
                                       
Fuel Tank Support Structure
                                      40
                                      12
                                       
Steps
                                      35
                                       6
                                       
Bumper
                                      33
                                      10
                                       
Shackles
                                      10
                                       3
                                       
Front Axle
                                      60
                                      15
                                       
Suspension Brackets, Hangers
                                      100
                                      30
                                       
Transmission Case
                                      50
                                      12
                                       
Clutch Housing
                                      40
                                      10
                                       
Fairing Support Structure System
                                      35
                                       6
                                       
Drive Axle Hubs (per 4)
                                      80
                                      20
                                       
Non Drive Front Hubs (2)
                                      40
                                       5
                                       
Driveshaft
                                      20
                                       5
                                       
Transmission/Clutch Shift Levers
                                      20
                                       4
                                       
   
Table 10 to §1037.520 -- Unit Weight Reductions for Phase 2 Vocational Vehicles (pounds)
COMPONENT
MATERIAL
VEHICLE TYPE


Class 2b-7 Vocational Vehicle
Class 8 Vocational Vehicle
Axle Hubs  -  Drive
Aluminum
                                      20
                                      20
Axle Hubs  -  Drive
High Strength Steel
                                       5
                                       5
Axle Hubs - Non-Drive
Aluminum
                                      20
                                      20
Axle Hubs - Non-Drive
High Strength Steel
                                      2.5
                                      2.5
Axle  -  Non-Drive
Aluminum
                                      60
                                      60
Axle  -  Non-Drive
High Strength Steel
                                      15
                                      15
Axle - 6x2 Configuration
Multi
                                      N/A
                                      300
Brake Drums  -  Drive
Aluminum
                                      35
                                      35
Brake Drums  -  Drive
High Strength Steel
                                      2.8
                                      2.8
Brake Drums - Non-Drive
Aluminum
                                      30
                                      30
Brake Drums - Non-Drive
High Strength Steel
                                       4
                                       4
Crossmember  -  Cab
Aluminum
                                      15
                                      15
Crossmember  -  Cab
High Strength Steel
                                       5
                                       5
Crossmember - Non-Suspension
Aluminum
                                       5
                                       5
Crossmember - Non-Suspension
High Strength Steel
                                      1.7
                                      1.7
Crossmember - Suspension
Aluminu'm
                                      25
                                      25
Crossmember - Suspension
High Strength Steel
                                       6
                                       6
Driveshaft
Aluminum
                                      20
                                      20
Driveshaft
High Strength Steel
                                       5
                                       5
Frame Rails
Aluminum
                                      220
                                      220
Frame Rails
High Strength Steel
                                      43
                                      43
Shackles
Aluminum
                                      10
                                      10
Shackles
High Strength Steel
                                       3
                                       3
Suspension Brackets, Hangers
Aluminum
                                      100
                                      100
Suspension Brackets, Hangers
High Strength Steel
                                      30
                                      30
Transmission Case
Aluminum
                                      45
                                      50
Transmission Case
High Strength Steel
                                      12
                                      12
Clutch Housing
Aluminum
                                      34
                                      47
Clutch Housing
High Strength Steel
                                      10
                                      10
Clutch Levers
Aluminum
                                      20
                                      20
Clutch Levers
High Strength Steel
                                       4
                                       4
   
Table 11 to §1037.520 -- Weight Reductions for Trailers (pounds)
COMPONENT
MATERIAL
WEIGHT REDUCTION (POUNDS)
Structure for Suspension Assembly[1]
 Aluminum
                                      280
Hub and Drum (per axle)
Aluminum
                                      80
Floor
Aluminum
                                      375
Floor
Composite (wood and plastic)
                                      245
Floor Crossmembers
 Aluminum
                                      203
Landing Gear
 Aluminum
                                      50
Rear Door
 Aluminum
                                      187
Rear Door Surround
 Aluminum
                                      150
Roof Bows
 Aluminum
                                      100
Side Posts
 Aluminum
                                      300
Slider Box
 Aluminum
                                      150
Upper Coupler Assembly
 Aluminum
                                      430
[1] For tandem-axle suspension sub-frames made of aluminum, apply a weight reduction of 280 pounds.  Use good engineering judgment to estimate a weight reduction for using aluminum sub-frames with other axle configurations.
   
   (3) Apply vehicle weight inputs for changing technology configurations as follows:
      (i) For Class 8 tractors or Class 8 vocational vehicles with permanent 6x2 axle configuration, apply a weight reduction input of 300 pounds.
      (ii) For Class 8 tractors with 4x2 axle configuration, apply a weight reduction input of 400 pounds.
      (iii) For tractors with installed engines with displacement below 14.0 liters, apply a weight reduction of 300 pounds.
      (iv) For vehicles that use a fuel other than diesel fuel, gasoline, or natural gas, use good engineering judgment to determine an appropriate weight adjustment relative to a comparable vehicle fueled by gasoline or diesel fuel.
   (4) You may ask to apply the off-cycle technology provisions of §1037.610 for weight reductions not covered by this paragraph (e).
(f) Additional vehicle characteristics.  GEM accounts for CO2 emission reductions for certain technologies and vehicle configurations as noted in this paragraph (f) for Phase 2 vehicles.  Because these adjustments are made internal to GEM, you need to identify the features as GEM inputs rather than separately applying these adjustments to GEM results.  These adjustments are summarized for informational purposes only.   
   (1) GEM applies a 2.5 % emission reduction for single drive axles with the following Class 8 vehicles:
      (i) Tractors in a 4x2 configuration. 
      (ii) Tractors and vocational vehicles with a permanent 6x2 configuration.  The same emission reduction applies for part-time 6x2 configurations, but only for the cruise cycles specified in §1037.510.  
   (2) GEM applies a 0.5 % emission reduction for vehicles that use a low-friction drive axle lubricant, as follows:
      (i) A lubricant qualifies if it meets the specifications for BASF Emgard FE 2986 as described in "Emgard[(R)] FE 75W-90 Fuel Efficient Synthetic Gear Lubricant" (incorporated by reference in § 1037.810).  
      (ii) You may use A to B testing using the procedures in §1037.515 to show that a lubricant performs at an equivalent or superior level relative to a lubricant specified in paragraph (f)(2)(i) of this section.  Testing must show equivalent or superior performance at every specified speed and torque value.
   (3) GEM applies a 2 % emission reduction for tractors if they have an automatic transmission, an automated manual transmission, or a dual-clutch transmission.  Similarly, GEM applies a 2.3 % emission reduction for Class 8 vocational vehicles certified with the Regional duty cycle if they have an automated manual transmission or a dual-clutch transmission.
   (4) GEM applies a 2 % emission reduction for tractors with predictive cruise control.  This includes any cruise control system that incorporates satellite-based global-positioning data for controlling operator demand.
   (5) GEM applies a 0.5 % emission reduction for tractors with a high-efficiency air conditioning compressor.  This includes mechanically powered compressors meeting the specifications described in 40 CFR 86.1868-12(h)(5), and all electrically powered compressors.  
   (6) GEM applies a 1 % emission reduction for tractors with electrically powered pumps for steering and engine cooling.
   (7) GEM applies a 1 % emission reduction for tractors with automatic tire inflation systems.  The corresponding emission reduction for trailers is 1.5 %.
   (8) GEM accounts for emission reductions for reduced idle for the following technologies:
      (i) Stop-start technology for vocational vehicles. Phase 2 vocational vehicles qualify for reduced emissions in GEM modeling if the engine shuts down no more than 30 seconds after the onset of any of the following conditions:
         (A) The vehicle's brake is depressed at a zero-speed condition.
         (B) A vehicle with automatic transmission goes into "Park".
      (ii) Neutral-idle technology for vocational vehicles. A Phase 2 vocational vehicle with an automatic transmission qualifies for reduced emissions in GEM modeling if the vehicle goes into neutral (or reduces torque equivalent to being in neutral) at a zero-speed condition.
      (iii)  Extended-idle reduction.  If your tractor is equipped with idle reduction technology meeting the requirements of §1037.660 that will automatically shut off the main engine after 300 seconds or less, GEM applies a 5 percent emission reduction for Phase 2 vehicles.  For Phase 1, enter 5.0 g/ton-mile as the input (or a lesser value specified in §1037.660); otherwise leave this field blank.
(g) Engine fuel mapping.  Use the fuel map from the engine manufacturer to characterize the engine's specific fuel consumption, or create a new fuel map as described in 40 CFR 1036.535.  
(h) Engine full-load torque curve and motoring torque curve.  Use the full-load torque curve and the motoring torque map from the engine manufacturer or create new maps as described in 40 CFR 1065.510(b) and (c). 
(i) [Reserved]
(j) Vehicles with hybrid power takeoff.  Determine the delta PTO emission result of your engine and hybrid power takeoff system as described in § 1037.540.
(k) Alternate fuels.  For fuels other than those identified in 40 CFR 1036.530(b), use GEM to simulate your vehicle as a diesel-fueled vehicle, but use a fuel map based on the mass flow rates of the alternate fuel.  

§ 1037.525  Aerodynamic measurements.
This section describes a methodology for determining aerodynamic drag area, CDA for use in determining GEM inputs as described in §1037.520.  
(a) General provisions for trailers.  The GEM input for a trailer's aerodynamic performance is based on a delta CDA value relative to a baseline trailer.  Determine these delta CDA values by performing A to B testing using one of the procedures specified in §§1037.527 through 1037.533.  Determine a baseline CDA value for a standard tractor pulling a test trailer representing a production configuration.  Repeat this testing with the same tractor, or a nominally equivalent tractor, and a baseline trailer.  For testing long trailers, the baseline trailer is a trailer meeting the specifications for a Phase 1 standard trailer in §1037.501(g)(1).  For testing short trailers, use a baseline trailer that meets the same specifications, except that you may make any appropriate adjustments to the specified dimensions to represent a production configuration; also, in the case of trailers less than 35 feet long, use a baseline trailer with a single axle.  Use good engineering judgment to perform paired tests that accurately demonstrate the reduction in aerodynamic drag associated with the improved design.  Calculate a delta CDA by subtracting the drag area for the test trailer from the drag area for the baseline trailer.  Submit information describing how you determined CDA values as described in §§1037.527 through 1037.533, as applicable.
(b) General provisions for tractors.  The GEM input for a tractor's aerodynamic performance is an absolute CDA value that is measured or calculated for a tractor in a test configuration.  Test high-roof tractors with a standard box trailer.  Test low-roof and mid-roof tractors without a trailer; however, you may test low-roof and mid-roof tractors with a trailer to evaluate off-cycle technologies.  The default method for determining CDA values is a coastdown procedure as specified in §1037.527.  You may instead use one of the alternative methods specified in §§1037.529 through 1037.533, or some other method, based on a correlation to coastdown testing, consistent with good engineering judgment.  Submit information describing how you determined CDA values from coastdown testing whether or not you use an alternative method.  If you determine drag area using an alternative method, CDAalt, you must submit additional information as described in §§1037.527 through 1037.533, as applicable, and adjust the CDA values to be equivalent to the corresponding values from coastdown measurements as follows: 
   (1) Unless good engineering judgment requires otherwise, assume that coastdown drag areas are proportional to drag areas measured using alternative methods.  This means you may apply a single constant adjustment factor, Falt-aero, for a given alternate drag area method using the following equation: 
      CDA = CDAalt ∙ Falt-aero
   (2) Determine Falt-aero by performing coastdown testing and applying your alternate method on the same vehicle.  Unless we approve another vehicle, the vehicle must be a Class 8, high-roof, sleeper cab with a full aerodynamics package, pulling a standard trailer.  Where you have more than one tractor model meeting these criteria, use the tractor model with the highest projected sales.  If you do not have such a tractor model, you may use your most comparable tractor model with our prior approval.  
   (3) For Phase 2 testing, use good engineering judgment to calculate a unique Falt-aero for each a high-roof day cab and a high-roof sleeper cab corresponding to each major tractor model.  You must also determine unique values of Falt-aero for low-roof and mid-roof tractors if you determine CDA values based on equivalent high-roof tractor testing as shown in Table 5 of § 1037.520.  For Phase 1 testing, if good engineering judgment allows it, you may calculate a single, constant value of Falt-aero for your whole product line by dividing the coastdown drag area, CDAcoast, by CDAalt.  
   (4) Calculate Falt-aero to at least three decimal places.  For example, if your coastdown testing results in a drag area of 6.430, but your wind tunnel method results in a drag area of 6.200, Falt-aero would be 1.037.
(c) Approval of alternative methods for tractors.  You must obtain preliminary approval before using any method other than coastdown testing to determine drag coefficients for tractors.  Send your request for approval to the Designated Compliance Officer.  Keep records of the information specified in this paragraph (c).  Unless we specify otherwise, include this information with your request.  You must provide any information we require to evaluate whether you may apply the provisions of this section, consistent with good engineering judgment.  Include additional information related to your alternative method as described in §§1037.529 through 1037.533.  If you use a different alternative method, include all the following information, as applicable:
      (1) Official name/title of the procedure.
      (2) Description of the procedure.
      (3) Cited sources for any standardized procedures that the method is based on.
      (4) Description and rationale for any modifications/deviations from the standardized procedures.
      (5) Data comparing the procedure to the coastdown reference procedure.
      (6) Additional information specified for the alternative methods described in §§1037.529 through 1037.533 as applicable to this method (e.g., source location/address, background/history).
(d) Yaw sweep corrections.  Vehicle aerodynamic features can be more effective at reducing wind-averaged drag than is predicted by zero-yaw drag. 
   (1) For Phase 2 testing, apply the following method based on SAE J1252 (incorporated by reference in §1037.810):
      (i) Determine the zero-yaw drag area, CDAzero, and the yaw-sweep drag area for your vehicle using the same alternate method.  For the yaw sweep drag area, measure the drag area, at a minimum, at yaw angles of 0°, +-1°, +-3°, +-6°, and +-9°, where 0° represents the direction of travel.  Alternatively, using good engineering judgment with demonstration of equivalency and our prior approval, you may measure the drag area using different or fewer yaw angles than those specified above, provided they satisfy the requirements for SAE J1252, unless otherwise demonstrated.
      (ii)  Calculate the wind-averaged coefficient of drag according to SAE J1252.
(iii) For the tractor used to determine Falt-aero, determine your wind-averaged drag area, CDAwa, using the following equation:
         CDAwa = CDAzero,coastdown + (CDAwa,alt method  -  CDAzero,alt method) ∙ Falt-aero
         		Eq. 1037.525-1
(iv) For additional tractors using an alternative method and predetermined Falt-aero, use the following equation to determine CDAwa:
         CDAwa = CDAwa,alt method ∙ Falt-aero
         		Eq. 1037.525-2
(v) Instead of testing, you may use a default adjustment of 0.80 m[2] using the following equation:
         CDAwa = CDAzero + 0.80
         		Eq. 1037.525-3
    (2) For Phase 1 testing, you may correct your zero-yaw drag area as follows if the ratio of the zero-yaw drag area divided by yaw-sweep drag area for your vehicle is greater than 0.8065 for  +-6° yaw angle or 0.8350 for wind-averaged drag  (which represents the ratios expected for a typical Class 8 high-roof sleeper cab):
      (i) Determine the zero-yaw drag area and the yaw-sweep drag area for your vehicle using the same alternate method as specified in this subpart.  Measure the drag area for 0°,  - 6°, and +6°.  Use the arithmetic mean of the  - 6° and +6° drag areas as the +-6° drag area.
      (ii)  Calculate your yaw-sweep correction factor, CFys, using the following equation:
      
		Eq. 1037.525-4
      (iii) You may instead calculate the wind-averaged drag area according to SAE J1252 (incorporated by reference in §1037.810) and substitute this value into Equation 1037.525-4 for the +-6° yaw-averaged drag area.  If you choose to calculate the wind-averaged drag area according to SAE J1252, calculate your yaw-sweep correction factor, CFys, using the following equation:
      
      
   		Eq. 1037.525-5
      (iv) Calculate your corrected drag area for determining the aerodynamic bin by multiplying the measured zero-yaw drag area by CFys as determined using Equation 1037.525-4 or 1037.525-5, as applicable.  The correction factor may be applied to drag areas measured using other procedures.  For example, we would apply CFys to drag areas measured using the recommended coastdown method.  If you use an alternative method, you would also need to apply an alternative correction, Falt-aero, and calculate the final drag area using the following equation:
      	CDA = Falt-aero ∙ CFys ∙ CDAzero-alt
		Eq. 1037.525-6
      (v) You may ask us to apply CFys to similar vehicles incorporating the same design features.

§ 1037.527 Coastdown procedures for calculating drag area (CDA).
The coastdown procedures in this section describe how to calculate drag area, CDA, with Phase 2 tractors and trailers.  Follow the provisions of Sections 1 through 9 of SAE J1263 and SAE J2263 (incorporated by reference in § 1037.810), with the following clarifications and exceptions:
(a) The terms and variables identified in this section have the meaning given in SAE J1263 and J2263 unless specified otherwise.
(b) Prepare tractors and trailers for testing by installing tires mounted on steel rims in a dual configuration (except for steer tires).  The tires must - 
   (1) Be SmartWay-Verified or have a rolling resistance below 5.1 kg/ton.
   (2) Have accumulated at least 2,175 miles but have no less than 50 percent of their original tread depth, as specified for truck cabs in SAE J1263 (incorporated by reference in §1037.810).
   (3) Not be retreads or have any apparent signs of chunking or uneven wear.(4) Be size 295/75R22.5 or 275/80R22.5.
(c) The test condition specifications of SAE J1263 apply, with the following exceptions:
   (1) We recommend that you not perform coastdown testing if winds are expected to exceed 6.0 mph.
   (2) Road conditions should follow Section 7.4 of SAE J1263, except that road grade may exceed 0.5 %; however, the road grade for testing must not be excessive, considering factors such as coastdown effects and road safety standards. 
   (3) If road grade is greater than 0.02% over the length of the test surface, you must determine road grade as a function of distance along the length of the test surface and incorporate this into the analysis.  Use Section 11.5 of SAE J2263 to calculate the force due to grade.
(d) Measure vehicle speed at 10 Hz, in conjunction with time-of-day data.  Select one of the following options to determine vehicle speed: 
   (1) Operate the vehicle at a top speed above 70 mph; start the test at or above 70 mph.  Collect data through a minimum speed at or below 15 mph.  Disable any vehicle speed limiters that prevent travel above 70 mph.  If a vehicle cannot exceed 70 mph, start the test at the vehicle's maximum achievable speed.  Data analysis for valid coastdown runs must include the range of vehicle speeds specified in this paragraph (d)(1).  Perform a minimum of sixteen valid coastdown runs (eight in each direction).
   (2) Perform a high-speed coastdown from 70 to 60 mph and a separate low-speed coastdown from 25 to 15 mph.  For each speed range, start the test at least 2 mph above the specified maximum speed and collect data through at least 2 mph below the specified minimum speed.  Perform two to four high-speed coastdowns consecutively in one direction followed by the same number of low-speed coastdowns in the same direction, then perform that same number of measurements in the opposite direction.  Repeat this process until you have performed twelve valid high-speed coastdowns and twelve valid low-speed coastdowns in each direction.
(e) Measure wind speed, wind direction, air temperature, and air pressure at 1 Hz, in conjunction with time-of-day data.  Use at least one stationary electro-mechanical anemometer and suitable data loggers meeting SAE J1263 specifications, subject to the following additional specifications for the anemometer placed along the test surface:
   (1) You must start a coastdown measurement within 24 hours after running zero-wind and zero-angle calibrations. 
   (2) Place the anemometer at least 50 feet from the nearest tree and at least 25 feet from the nearest bush (or equivalent features).  Position the anemometer adjacent to the test surface, near the midpoint of the length of the track, between 2.5 and 3.0 body widths from the expected location of the test vehicle's centerline as it passes the anemometer.  Record the location of the anemometer relative to a reference point along the test track, to the nearest 10 feet. 
   (3) Mount the anemometer at a height that is within 6 inches of half the test vehicle's body height.
   (4) The height of vegetation surrounding the anemometer may not exceed 10 % of the anemometer's mounted height, within a radius equal to the anemometer's mounted height.
(f) Measure air speed and air direction onboard the vehicle at 10 Hz, in conjunction with time-of-day data, using an anemometer and suitable data loggers that meet the requirements of Sections 5.4 and 5.5 of SAE J2263.  Mount the anemometer 1 meter above the top of the leading edge of the trailer. Correct anemometer measurements using the wind speed and wind direction measurements described in paragraph (e) of this section as follows:
   (1) Calculate arithmetic mean values for vehicle speed, air speed, wind speed, wind direction over each 5-mph vehicle speed increment for each coastdown.
   (2) Calculate the theoretical air speed, vair,th, for each 5-mph increment using the following equation:
   
               Eq. 1037.523-1
      Where:
      = the mean wind speed over each 5-mph increment.
      = the mean vehicle speed over each 5-mph increment.
      = the mean wind direction over each 5-mph increment.  Let = 0 for air flow in travel direction 1, with values increasing counterclockwise.  For example, if the vehicle is traveling eastbound in direction 1, then = 270° means a wind from the south.
   (3) Perform a linear regression using all paired values of  and measured air speed, , to determine the air-speed correction coefficients, α0 and α1, based on the following equation:
   
               Eq. 1037.523-2
   (4) Correct measured air speed using the following equation:
   
               Eq. 1037.523-3
(g) You may split runs as described in paragraph (d)(2) of this section, but you may not split runs as described in Section 9.3.1 of SAE J2263.
(h) Follow the procedures specified in Section 10 of SAE J1263 or Section 11 of SAE J2263 to calculate coefficients for the road-load force equation.  Determine drag area, CDA, using the following procedure instead of what is specified in Section 10 of SAE J1263:
   (1) Calculate the vehicle's effective mass, Me, to account for rotational inertia by adding 56.7 kg to the measured vehicle mass, M, (in kg) for each tire making road contact.  
   (2) Calculate mean vehicle speed at each speed endpoint (70, 60, 25, and 15 mph) as follows:
      (i) Determine the timestamp corresponding to the point at which vehicle speed falls to 2.00 mph above the nominal starting speed of each speed range (70 or 25 mph), and determine the timestamp corresponding to vehicle speed 2.00 mph below the same speed setpoint. Consider the midpoint of this time range to be the time at which the vehicle reaches the starting speed.
      (ii) Repeat the calculation described in paragraph (h)(2)(i) of this section corresponding to the endpoint speed (60 or 15 mph) to determine the time at which the vehicle reaches the ending speed.
      (iii) Calculate the vehicle's average speed between the time that the vehicle reaches the starting and ending speeds for each interval by averaging the vehicle speed measurements in each interval, expressed in m/s to at least two decimal places.  
		(iv) If you correct for grade, also determine the change in elevation and the distance traveled during the interval, by averaging the elevation and distance traveled over each interval.
   (3) Calculate the road-load force, F, for each speed range using the following equation:
   
               Eq. 1037.523-4
   
   Where:
   Me = the vehicle's effective mass, in kg, expressed to at least the nearest 0.1 kg. 
    = average vehicle speed at the start or end of each speed range.
   = timestamp at which the vehicle reaches the starting or ending speed, in seconds, expressed to at least one decimal place.
   = average elevation at the start or end of each speed range, in m, expressed to at least one decimal place. .
    = distance traveled on the road surface  from a fixed reference location along the road to the start or end of each speed range, in m, expressed to at least one decimal place.
   Faxle = an estimate of rear-axle losses. Use 200 N for the high-speed range and 100 N for the low-speed range.
   g = gravitational acceleration = 9.81 m/s[2].
   (4) If you perform high-speed and low-speed coastdowns as described in paragraph (d)(2) of this section, average the F values for each set of consecutive low-speed runs.  Use this value as Flo in the calculations in this paragraph (h) to apply to each of the high-speed runs in a set of consecutive high-speed runs that immediately precede a set of consecutive low-speed runs. Otherwise, determine the Flo and Fhi values in the calculations in this paragraph (h) from the same run.
   (5) Calculate average air temperature  and air pressure  during each high-speed run.
   (6) Calculate average air speed during each speed range for each run, and .
   (7) Perform an iterative calculation to determine aerodynamic and mechanical forces as follows:
      (i) Assume initially that aerodynamic forces for the low-speed range are zero: Faero,lo = 0.
      (ii) Estimate high-speed aerodynamic forces by subtracting mechanical forces from the road-load force corresponding to the high-speed coastdown, Fhi, as follows:
      Faero,hi = Fhi  -  (Flo  -  Faero,lo)
      			Eq. 1037.523-5
      (iii) Calculate a new value for Faero,lo by adjusting the high-speed aerodynamic forces to account for speed, as follows:
      
      			Eq. 1037.523-6
      (iv) Repeat the steps in paragraphs (g)(7)(ii) and (iii) of this section until Faero,hi changes less than 1.0 %.
   (8) Calculate drag area, CDA, in m[2] for each high-speed run or segment using the following equation:
      
      			Eq. 1037.523-7
      Where:
       = mean air density in kg/m[3].
      
      			Eq. 1037.523-8
       = mean air pressure in kPa, expressed to at least one decimal place.
      R = molar gas constant = 287.058 J/(kg·K).
       = mean air temperature in °C, expressed to at least one decimal place.
  (9) Calculate an arithmetic mean CDA value from all the high-speed segments to determine the drag area for the test.
(i) [Reserved]
(j)  Include the following information in your application for certification:
   (1) The name, location, and description of your test facilities, including background/history, equipment and capability, and track and facility elevation, along with the grade and size/length of the track.
   (2) Test conditions for each test result, including date and time, wind speed and direction, ambient temperature and humidity, vehicle speed, driving distance, manufacturer name, test vehicle/model type, model year, applicable family, tire type and rolling resistance, weight of tractor-trailer (as tested), and driver identifier(s).
   (3) Average CDA result and all the individual run results (including voided or invalid runs).  

   § 1037.529  Wind-tunnel procedures for calculating drag area (CDA).
    (a) You may measure drag areas consistent with the modified SAE procedures described in this section using any wind tunnel recognized by the Subsonic Aerodynamic Testing Association.  If your wind tunnel is not capable of testing in accordance with these modified SAE procedures, you may ask us to approve your alternate test procedures if you demonstrate that your procedures produce equivalent data.  For purposes of this section, data are equivalent if they are the same or better with respect to repeatability and unbiased correlation with coastdown testing.  Note that, for wind tunnels not capable of these modified SAE procedures, good engineering judgment may require you to base your alternate method adjustment factor on more than one vehicle.  You may not develop your correction factor until we have approved your alternate method.  The applicable SAE procedures are SAE J1252, SAE J1594, and SAE J2071 (incorporated by reference in §1037.810).  The following modifications apply for SAE J1252: 
      (1) The minimum Reynold's number, , is 1.0 ∙10[6] instead of the value specified in section 5.2 of SAE J1252.  Your model frontal area at zero yaw angle may exceed the recommended 5 percent of the active test section area, provided it does not exceed 25 percent.
      (2) For full-scale wind tunnel testing, use good engineering judgment to select a test article (tractor and trailer) that is a reasonable representation of the test article used for the reference method testing.  For example, where your wind tunnel is not long enough to test the tractor with a standard 53 foot trailer, it may be appropriate to use shorter box trailer.  In such a case, the correlation developed using the shorter trailer would only be valid for testing with the shorter trailer.
      (3) For reduced-scale wind tunnel testing, a one-eighth (1/8th) or larger scale model of a heavy-duty tractor and trailer must be used, and the model must be of sufficient design to simulate airflow through the radiator inlet grill and across an engine geometry representative of those commonly used in your test vehicle.
   (b) You must perform wind tunnel testing and the coastdown procedure on the same tractor model and provide the results for both methods.  The wind tunnel tests performed under this section must simulate a vehicle speed of 55 mph.  For Phase 1 vehicles, conduct the wind tunnel tests at a zero yaw angle and, if so equipped, utilizing the moving/rolling floor (i.e., the moving/rolling floor should be on during the test, as opposed to static) for comparison to the coastdown procedure, which corrects to a zero yaw angle for the oncoming wind.  For Phase 2 vehicles, conduct the wind tunnel tests by measuring the drag area according to §1037.525(d)(1) and, if so equipped, utilizing the moving/rolling floor (i.e., the moving/rolling floor should be on during the test, as opposed to static) for comparison to the coastdown procedure. 
   (c) Include the following information in your request to use wind-tunnel testing:
      (1) Identify the name and location of the test facilities for your wind tunnel method.  Also include the following things to describe the test facility:
      (2) Background/history.
      (3) The layout (with diagram), type, and construction (structural and material) of the wind tunnel.
      (4) Wind tunnel design details:  corner turning vane type and material, air settling, mesh screen specification, air straightening method, tunnel volume, surface area, average duct area, and circuit length.
      (5) Wind tunnel flow quality:  temperature control and uniformity, airflow quality, minimum airflow velocity, flow uniformity, angularity and stability, static pressure variation, turbulence intensity, airflow acceleration and deceleration times, test duration flow quality, and overall airflow quality achievement.
      (6) Test/working section information: test section type (e.g., open, closed, adaptive wall) and shape (e.g., circular, square, oval), length, contraction ratio, maximum air velocity, maximum dynamic pressure, nozzle width and height, plenum dimensions and net volume, maximum allowed model scale, maximum model height above road, strut movement rate (if applicable), model support, primary boundary layer slot, boundary layer elimination method, and photos and diagrams of the test section.
      (7) Fan section description:  fan type, diameter, power, maximum rotational speed, maximum top speed, support type, mechanical drive, and sectional total weight.
      (8) Data acquisition and control (where applicable):  acquisition type, motor control, tunnel control, model balance, model pressure measurement, wheel drag balances, wing/body panel balances, and model exhaust simulation.
      (9) Moving ground plane or rolling road (if applicable):  construction and material, yaw table and range, moving ground length and width, belt type, maximum belt speed, belt suction mechanism, platen instrumentation, temperature control, and steering.
      (10) Facility correction factors and purpose. 
   
§ 1037.531  Using computational fluid dynamics to calculate drag area (CDA). 
This sections describes a procedure for using commercially available computational fluid dynamics (CFD) software code to determine CDA values.  For Phase 1 vehicles, conduct the analysis assuming zero yaw angle, and ambient conditions consistent with coastdown procedures.  For Phase 2 vehicles, conduct the analysis using yaw angles according to §1037.525(d)(1), and assuming ambient conditions consistent with coastdown procedures.  For simulating a wind tunnel test, the analysis should accurately model the particular wind tunnel and assume a wind tunnel blockage ratio consistent with SAE J1252 (incorporated by reference in §1037.810), or one that matches the selected wind tunnel, whichever is lower.  For simulation of open road conditions similar to that experienced during coastdown test procedures, the CFD analysis should assume a blockage ratio at or below 0.2 percent.  
(a) Take the following steps for CFD code with a Navier-Stokes formula solver:
   (1) Perform an unstructured, time-accurate, analysis using a mesh grid size with total volume element count of at least 50 million cells of hexahedral and/or polyhedral mesh cell shape, surface elements representing the geometry consisting of no less than 6 million elements, and a near-wall cell size corresponding to a y+ value of less than 300, with the smallest cell sizes applied to local regions of the tractor and trailer in areas of high flow gradients and smaller geometry features.  
   (2) Perform the analysis with a turbulence model and mesh deformation enabled (if applicable) with boundary layer resolution of +-95 percent. Once result convergence is achieved, demonstrate the convergence by supplying multiple, successive convergence values for the analysis.  The turbulence model may use k-epsilon (k-ε), shear stress transport k-omega (SST k-ω), or other commercially accepted methods.
(b) For Lattice-Boltzman based CFD code, perform an unstructured, time-accurate analysis using a mesh grid size with total surface elements of  at least 50 million cells using cubic volume elements and triangular and/or quadrilateral surface elements with a near wall cell size of no greater than 6 mm on local regions of the tractor and trailer in areas of high flow gradients and smaller geometry features, with cell sizes in other areas of the mesh grid starting at twelve millimeters and increasing in size from this value as the distance from the tractor-trailer model increases.  
(c) All CFD analysis should be conducted using the following conditions: 
   (1) To determine CDA values for a tractor, test with a tractor-trailer combination using the manufacturer's tractor and a standard trailer.  To determine CDA values for a trailer, test with a tractor-trailer combination using a standard tractor and the manufacturer's trailer. 
   (2) An environment with a blockage ratio at or below 0.2 percent to simulate open road conditions, a zero degree yaw angle between the oncoming wind and the tractor-trailer combination.
   (3) Ambient conditions consistent with the coastdown test procedures specified in this part.
   (4) Open grill with representative back pressures based on data from the tractor model,
   (5) Turbulence model and mesh deformation enabled. 
   (6) Tires and ground plane in motion consistent with and simulating a vehicle moving in the forward direction of travel.
   (7) The smallest cell size should be applied to local regions on the tractor and trailer in areas of high flow gradients and smaller geometry features (e.g., the a-pillar, mirror, visor, grille and accessories, trailer leading and trailing edges, rear bogey, tires, and tractor-trailer gap).
   (8)  Simulate a speed of 55 mph and, if not available from coastdown test procedures, a wind speed of 7 mph.  
(d) You may ask us to allow you to perform CFD analysis using parameters and criteria other than those specified in this section, consistent with good engineering judgment, if you can demonstrate that the specified conditions are not feasible (e.g., insufficient computing power to conduct such analysis, inordinate length of time to conduct analysis, equivalent flow characteristics with more feasible criteria/parameters) or improved criteria may yield better results (e.g., different mesh cell shape and size).  To support this request, we may require that you supply data demonstrating that your selected parameters/criteria will provide a sufficient level of detail to yield an accurate analysis, including comparison of key characteristics between your criteria/parameters and the criteria specified in paragraphs (a) and (b) of this section (e.g., pressure profiles, drag build-up, and/or turbulent/laminar flow at key points on the front of the tractor and/or over the length of the tractor-trailer combination).
(e) Include the following information in your request to determine CDA values using CFD:
   (1) Official name/title of the software product.
   (2) Date and version number for the software product.
   (3) Manufacturer/company name, address, phone number and web address for software product.
   (4) Identify if the software code is based on Navier-Stokes or Lattice-Boltzmann equations.

§ 1037.533  Constant-speed procedure for for calculating drag area (CDA).
This section describes how to use constant-speed aerodynamic drag testing to determine CDA.  The constant speed test requires that the driving torque, vehicle speed, air flow velocity, and yaw angle be measured at two different constant vehicle speeds under defined conditions on a test track.
(a) Test track. Set up your test track or road to meet the requirements in § 1037.527(b)(1)(ii).  The length of the track or road must be at least 1 mile.
(b) Vehicle torque and speed variation thresholds.  Vehicles must meet the following speed and torque variation limits during constant speed drag testing:
    (1) High speed test.
       (i) Speed variation limit:
       
       Where:
       = mean vehicle speed averaged over 10 second increments in the measurement section in km/h.
       = 1 second moving average of vehicle speed in km/h.
       (ii) Torque variation limit:
       
       Where:
       = Tsum average 10 second increments in the measurement section in Nm.
       Tsum = sum of corrected torque values from the left and right wheels in Nm.
       = 1 second moving average of Tsum in Nm.
    (2) Low speed test.
       (i) Speed variation limit:
       
       Where:
       = mean vehicle speed over 10 second increments in the measurement section in km/h.
       = 1 second moving average of vehicle speed in km/h.
        (ii) Torque variation limit:
       
       Where:
       = Tsum average per Xms second increments in the measurement section in Nm.
       Tsum = sum of corrected torque values from all wheels in Nm.
       = Xms second moving average of Tsum in Nm.
(c) Ambient conditions.  (1) The ambient conditions described in Section 7.1 through 7.4 of SAE J1263 (incorporated by reference in § 1037.810) must be met over the course of testing.
    (2) The road surface temperature must be <= 50 °C.  Use good engineering judgment to take a representative measurement of road surface temperature either directly or using a radiation thermometer.
(d) Vehicle setup and requirements.  Set up the vehicle for testing as described in § 1037.527. The trailer must meet specifications given in § 1037.501(g).
    (1) Verify that the axle alignment is within the manufacturer specifications.
    (2) The wheels must rotate freely. Verify that there is no inadvertent brake drag after the vehicle is instrumented.
(e) Measurement instrument calibration and verification.  Measurement instruments must meet the requirements of 40 CFR part 1065 subpart C.  Calibrate and verify measurement instruments according to 40 CFR part 1065 subpart D.
    (1) Torque.  Measure direct torque at all driven axles using one of the following measurement systems:
       (i) Hub torque meter.
       (ii) Rim torque meter.
       (iii) Half shaft torque meter.
       (iv) Driveshaft torque meter.
    (2) Measure the rotational speed where the torque is measured.  This can be calculated using the engine speed data collected from the CAN in conjunction with the transmission gear ratio and rear axle ratio, where applicable.
    (3) Gather vehicle speed at 10 Hz, in conjunction with time-of-day data, at the resolution and accuracy described in Section 5.3 of SAE J2263 (incorporated by reference in § 1037.810).
    (4) Collect wind speed, wind direction, air temperature, and air pressure data as described in § 1037.527(b)(3).
    (5) Mount an anemometer at the leading edge of the trailer approximately 1 meter above the top of the trailer to collect air speed and air direction data onboard the vehicle at 10 Hz, in conjunction with time-of-day data.
       (i) For air speeds in the range of 20  -  33 m/s and yaw angles in the range of 0 +-7 degrees, the anemometer must meet the following accuracy specifications:
           (A) Air speed: +- 2 % of actual reading.
           (B) Yaw angle: +- 1 degree.
       (ii) Align the anemometer using geometrical and optical aids.  After aligning the instrument, evaluate the misalignment of the installation to enable correction during the data processing.
    (6) Use a CAN-bus signal recorder that is capable of reading and recording the vehicle CAN-bus signals.
(f) Measurement signals and data recording. [Reserved].
(g) Test procedure.  The constant speed vehicle test is conducted by targeting the maximum vehicle velocity span between the measurement of mechanical resistance (low speed) and total running resistance (high speed).
    (1) Vehicle speed must meet the speed variation thresholds in paragraph (b) of this section.  The target speeds for the tests are as follows:
       (i)  Low speed testing, constant velocity of 10 mph.
       (ii) High speed testing, constant velocity of 50 mph.
       (iii) High speed testing, constant velocity of 70 mph.
    (2) Perform testing as follows:
       (i) Install the torque meters on the driven axles of the test vehicle, or on the driveshaft if using a driveshaft torque meter.
       (ii) Check the drive-wheels for proper rotation, with torque meters and half shafts installed, by manually rotating the wheels with the wheels off of the ground.
       (iii) Measure the total mass of the vehicle with an accuracy that meets the requirements in Section 5.9 of SAE J2263.
       (iv) Inflate the tires as described in Section 8.1 of SAE J2263.
       (v) Start the engine to pre-condition the vehicle by idling without the parking brake applied.
       (vi) If you have instrumented the vehicle with rim torque meters, lift the instrumented axle and zero the torque meters.
       (vii) Condition the vehicle as described in Section 8.3 of SAE J2263.
       (viii) If you have instrumented the vehicle with hub or shaft torque meters, bring the vehicle to a standstill on the selected standstill area of the test track.  Slow the vehicle down carefully and allow it to roll to a stop with the clutch disengaged or transmission in neutral and engine switched off.  Zero the torque meters within a minute of coming to a stop.  Continue to warm-up the vehicle for at least 2 km after the standstill phase is complete.
       (ix) Perform the drive speed tests by holding the drive speed constant in the stabilization and measurement sections.  Multiple passes may be performed to reach the amount of test time required.  For stabilization, drive the vehicle at the target speed for 200 meters before the measurement section for each speed and direction, including before each pass if multiple passes are needed.  When driving the vehicle through the measurement section, it must be driven straight without steering.  Perform and collect data for the drive speed tests as follows:
          (A) Collect 10 mph data for five minutes in each direction.
          (B) Collect 50 mph data for 7.5 minutes in each direction.
          (C) Collect 70 mph data for 15 minutes in each direction.
          (D) Collect 50 mph data for 7.5 minutes in each direction.
          (E) Collect 10 mph for five minutes in each direction.
       (x) Perform a post test drift check of the torque meters using one of the following procedures:
          (A) Axle lift.  If you have instrumented the vehicle with rim torque meters, lift the instrumented axle and zero the torque meters.  Record the signals of all torque meters for at least 30 seconds.
          (B) Coastdown.  If you have instrumented the vehicle with hub or shaft torque meters, bring the vehicle to a standstill on the selected standstill area of the test track.  Slow the vehicle down carefully and allow it to roll to a stop with the clutch disengaged or transmission in neutral and engine switched off.  Record the signals of all torque meters for at least 30 seconds.
          (C) Validation.  Torque meter drift must be <= 3.0 Nm.  If the drift exceeds this limit, then the test results are not valid and you must retest the vehicle.
       (xi) Perform the following general checks during the test:
          (A) Verify that the axle/wheel bearings are not overheating during the test using a hand-held infrared thermometer.
          (B) Recheck the vehicle configuration upon the completion of testing.  Note any differences in the vehicle or equipment setup, etc.
(h) Testing documentation.  In addition to the recording measurement data, document the testing by providing us with the following data:
    (1) A general description and pictures of the vehicle tested.
    (2) Vehicle maximum height and width.
    (3) Mileage at each step of the testing.
    (4) The following start times: warm-up phase, low-speed tests, and high-speed tests.
    (5) Vehicle fuel level and the amount of fuel added over the course of testing including the date, time, and mileage at the refuel point.
    (6) Number of vehicle occupants (if applicable: time and detail of changes).
    (7) Actual total vehicle mass (including mileage readings, occupants, and fuel level).
    (8) Timing of torque meter zeroing and drift check.
    (9) Test track type and driving direction for each data set.
    (10) Test track temperatures, if applicable.
    (11)  Documentation of extraordinary events, for example:
       (i) Close passing of another vehicle.
       (ii) Driving errors.
       (iii) Technical errors.
       (iv) Measurement errors.
    (12) Transmission gear utilized for the low speed test and high speed tests.
       (i) Calculations.  Time align all data.  Use the following calculations to determine constant speed aerodynamic drag:
       (1) Onboard air speed.  Correct the mobile anemometer air speed signal for instrument error, position error, and boundary layer effects using the calibration test data results in paragraph (e) of this section as follows:
           (i) Using the data generated, average the vehicle speed, v, air speed, vair,meas, wind speed, w, and wind direction, θw measurements over 10 second increments for each coastdown.
           (ii) Calculate the theoretical air speed for each 10 second increment from the vehicle speed, wind speed, and wind direction averages using the following equation:
           
           		Eq. 1037.533-1
           Where:
= the mean vehicle speed over the 10 second increment.
           = the mean wind speed over the 10 second increment.
           = the mean wind direction over the 10 second increment, counterclockwise relative to the air flow in travel direction 1.  For example, if the vehicle is traveling eastbound in direction 1, then = 0° means a wind from the west, = 90° means a wind from the north, and =  - 90° means a wind from the south, and = +-180° means a wind from the east.
           (iii) Plot all of the 10 second calculations of theoretical air speed, , versus the 10 second means of measured air speed, , to determine the air speed correction coefficients, intercept α0 and linear α1, based on the following equation:
           
                       Eq. 1037.533-2
           
           (iv) Correct the raw air speed measurements using the following equation:
           
                       Eq. 1037.533-3
       (2) Yaw angle.  Correct the mobile anemometer air angle signal for instrument error, misalignment error, position error, and boundary layer effects as follows:
           (i) Using the data generated, average the air speed, vair, wind speed, w, and wind direction, θw measurements over 10 second increments for each coastdown.
           (ii) Calculate the theoretical air direction for each 10 second increment using the following equation. 
           
           
              (B) Plot all of the 10 second calculations of theoretical air direction, , versus the 10 second means of measured air direction, , to determine the air direction correction coefficients, intercept β0 and linear β1, based on the following equation:
              
		Eq. 1037.533-4
              (C) Correct the raw air speed measurements using the following equation:
              
		Eq. 1037.533-5
       (3) Torque.  Correct torque measurement(s) for instrument error as follows:
       
       		Eq. 1037.533-6
       Where:
       T = corrected torque.
       Tr = torque meter reading.
       fTie = torque meter instrument error correction factor.
       fTd = torque meter drift correction factor.
       (4) Calculation of traction force.  Calculate traction force using the following equation:
       
       		Eq. 1037.533-7
       Where:
       Ftrac[speed] = traction force at the test speed.
       Ttotal[speed] = sum of all corrected torques at the test speed.
       neng = engine speed in rpm.
       igear = transmission ratio of engaged gear.
       iaxle = axle transmission ratio.
       vveh = vehicle speed.
       
       Average the Ftrac[speed] for each of the test speeds over 10 second increments.
       
       (5) Determination of drag area, CDA.  Calculate the CDA value for zero cross-wind conditions using the recorded data for traction force, air speed, and yaw angle using the following equations:
           (i) Calculate aerodynamic forces, Faero50 and Faero70, for every 10 second segment by subtracting the average low-speed traction force, F10avg, from the 10 second average high-speed traction force, F[speed]avg, for both the 50 mph and 70 mph runs, F[speed]. 
           Faero[speed] = F[speed]avg  -  F10avg
           		Eq. 1037.533-8
           (ii) Calculate the mean air density using the following equation:
           
                 	Eq. 1037.533-9
           Where:
            = mean air density in kg/m[3].
            = mean air pressure in kPa.
            = mean air temperature in °C.
           R = molar gas constant = 287.058 J/(kg·K).
           
           (iii) Average the corrected air speed and corrected yaw angle over every 10 second segment from the high-speed data to determine and .
           (iv) Calculate CDA using the following equation:
           
                 	Eq. 1037.533-10
           Where:
           Faero[speed] = aerodynamic force at 50 or 70 mph for every 10 second segment.
       
          (D) If less than 75 percent of the 10-second averages of corrected yaw angle, , are between -2 and 2 degrees, then plot all of the 10-second calculations of CDA versus the 10 second averages of corrected yaw angle, , to determine zero-yaw drag area CDA(0) using the following fourth-order polynomial regression equation:
          
          		Eq. 1037.533-11
          
          If 75 percent or more of the 10-second averages of corrected yaw angle, , are between -2 and 2 degrees, then determine zero-yaw drag area, CDA(0), by averaging the 10-second calculations of CDA where -2° < < 2°.

§ 1037.540  Special procedures for testing vehicles with hybrid power take-off. 
This section describes the procedure for quantifying the reduction in greenhouse gas emissions for vehicles as a result of running power take-off (PTO) devices with a hybrid energy delivery system.  The procedures are written to test the PTO by ensuring that the engine produces all of the energy with no net change in stored energy.  The full test for the hybrid vehicle is from a fully charged renewable energy storage system (RESS) to a depleted RESS and then back to a fully charged RESS.  These procedures may be used for testing any hybrid architecture for which you are requesting a vehicle certificate using either chassis testing or powertrain testing.  You must include all hardware for the PTO system.  You may ask us to modify the provisions of this section to allow testing hybrid vehicles other than electric-battery hybrids, consistent with good engineering judgment.
(a) Select two vehicles for testing as follows:
   (1) Select a vehicle with a hybrid energy delivery system to represent the vehicle family.  If your vehicle family includes more than one vehicle model, use good engineering judgment to select the vehicle type with the maximum number of PTO circuits that has the smallest potential reduction in greenhouse gas emissions.
   (2) Select an equivalent conventional vehicle as specified in §1037.615.
(b) Measure PTO emissions from the fully warmed-up conventional vehicle as follows:
   (1) Without adding any additional restrictions, instrument the vehicle with pressure transducers at the outlet of the hydraulic pump for each circuit.
   (2) Operate the PTO system with no load for at least 15 seconds.  Measure the pressure and record the average value over the last 10 seconds ().  Apply maximum operator demand to the PTO system until the pressure relief valve opens and pressure stabilizes; measure the pressure and record the average value over the last 10 seconds ().  
   (3) Denormalize the PTO duty cycle in Appendix II of this part using the following equation: 
    
   Where:
   prefi = the reference pressure at each point i in the PTO cycle.
   NPi = the normalized pressure at each point i in the PTO cycle.
    = the mean maximum pressure measured in paragraph (b)(2) of this section.
    = the mean minimum pressure measured in paragraph (b)(2) of this section.
   
   (4) If the PTO system has two circuits, repeat paragraph (b)(2) and (3) of this section for the second PTO circuit.
   (5) Install a system to control pressures in the PTO system during the cycle.
   (6) Start the engine.
   (7) Operate the vehicle over one or both of the denormalized PTO duty cycles in Appendix II of this part, as applicable.  Measure emissions during operation over each duty cycle using the provisions of 40 CFR part 1066.
   (8) For each duty cycle, validate the pressure in each circuit with the pressure specified from the cycle according to 40 CFR 1065.514.  Measured pressures must meet the specifications in the following table for a valid test: 
    Table 1 of §1037.540  -  Statistical criteria for validating duty cycles
                                   Parameter
                                   Pressure
                                  Slope, a1 
                           0.950 < a1 < 1.030
                       Absolute value of intercept, |a0|
                     < 2.0 % of maximum mapped pressure
                       Standard error of estimate, SEE 
                     < 10 % of maximum mapped pressure
                      Coefficient of determination, r[2] 
                                  > 0.970
   
(c) Measure PTO emissions from the fully warmed-up hybrid vehicle as follows:
   (1) Perform the steps in paragraphs (b)(1) through (5) of this section.
   (2) Prepare the vehicle for testing by operating it as needed to stabilize the battery at a full state of charge.  For electric hybrid vehicles, we recommend running back-to-back PTO tests until engine operation is initiated to charge the battery.  The battery should be fully charged once engine operation stops.  The ignition should remain in the "on" position. 
   (3) Turn the vehicle and PTO system off while the sampling system is being prepared. 
   (4) Turn the vehicle and PTO system on such that the PTO system is functional, whether it draws power from the engine or a battery. 
   (5) Operate the vehicle over one or both of the denormalized PTO duty cycles without turning the vehicle off, until the engine starts and then shuts down.  The test cycle is completed once the engine shuts down.  Measure emissions as described in paragraph (b)(7) of this section.  Use good engineering judgment to minimize the variability in testing between the two types of vehicles. 
   (6) Refer to paragraph (b)(8) of this section for cycle validation.
(d) Calculate the equivalent distance driven based on operating time for the PTO portion of the test by determining the time of the test (hours) and applying the conversion factor in paragraph (d)(4) of this section.  For testing where fractions of a cycle were run (for example, where three cycles are completed and the halfway point of a fourth PTO cycle is reached before the engine starts and shuts down again), use the following procedures to calculate the time of the test:  
   (1) Add up the time run for all complete tests, in hours.
   (2) For fractions of a test, use the following equation to calculate the time:
   
   
   Where:
   ttest = time of the incomplete test, in hours.
   i = measurement interval number.
   N = number of measurement intervals.
   NPcircuit_1 = normalized pressure command from circuit 1 of the PTO cycle.
   NPcircuit_2 = normalized pressure command from circuit 2 of the PTO cycle.  Let NPcircuit_2 = 1 if there is only one circuit.
   tcycle = time of a complete cycle, in hours.
   (3) Sum the time from complete cycles and from partial cycles.
   (4) Divide the total PTO operating time from paragraph (d)(3) of this section by a conversion factor of 0.0144 hr/mi to determine the equivalent distance driven.  This is based on an assumed fraction of engine operating time during which the PTO is operating of 28 percent, and an assumed average vehicle speed while driving of 27.1 mph, as follows:
   
(e) For Phase 1, calculate combined cycle-weighted emissions of the four duty cycles for vocational vehicles as follows:
   (1) Calculate the CO2 emission rates in grams per test without rounding.
   (2) Divide the CO2 mass from the PTO cycle by the distance determined in paragraph (d)(4) of this section and the standard payload to get the CO2 emission rate in g/ton-mile.
   (3) Calculate the g/ton-mile emission rate for the driving portion of the test specified in §1037.510 and add this to the CO2 g/ton-mile emission rate for the PTO portion of the test.
   (4) Follow the provisions of §1037.615 to calculate improvement factors and benefits for advanced technologies.
(f) For Phase 2, calculate the delta PTO emission results for input into GEM during vehicle certification as follows:
   (1) Calculate CO2 emission rates in grams per test, mCO2PTO, without rounding, as described in § 1037.550(k)(1). 
   (2) Correct the result from paragraph (f)(1) of this section for the test fuel's mass-specific net energy content as described in 40 CFR 1036.530(b).  Divide the resulting corrected CO2 mass by the distance determined in paragraph (d)(4) of this section and the standard payload to determine the CO2 emission rate in g/ton-mile.
   (3) Calculate the difference between the conventional PTO emissions result and the hybrid PTO emissions result for input into GEM. 

§ 1037.550 Powertrain testing.
This section describes the procedure for simulating a chassis test for both conventional and hybrid powertrains.  This testing is an optional approach that replaces the default fuel map in GEM for certifying Phase 2 vehicles.  It applies for vehicle manufacturers, but engine manufacturers may perform testing under this section as specified in 40 CFR 1036.630.  While this section includes the detailed equations you need to develop your own driver model and vehicle model, we recommend that you use the MATLAB/Simulink code provided at www.epa.gov/otaq/climate/gem.htm.
(a) Perform the powertrain test to establish measured CO2 emission rates at a range of speed and load settings.  Also measure NOx emissions (in g) during each of the specified sampling periods.  This section uses engine parameters and variables that are consistent with 40 CFR part 1065.  For molar mass values, see 40 CFR 1065.1005(f)(2).
(b) Select numerical values to characterize the powertrain emissions at each setting.  The selected values may not be lower than any corresponding measured values determined in this section.  You may select any value that is at or above the corresponding measured value.  These selected emission rates serve as worst-case values for certification.  Your declared emission rates are analogous to Family Emission Limits; these values serve as standards (or limit values), which means that a powertrain exceeding its declared CO2 emission level at any point is considered noncompliant.  
(c) Select a test engine and powertrain as described in §1037.235.  
(d) Set up the engine according to 40 CFR 1065.110.  The default test configuration involves connecting the powertrain's transmission output shaft directly to the dynamometer.  You may instead set up the dynamometer to connect at the wheel hubs if your powertrain configuration requires it, such as for hybrid powertrains. 
(e) Cool the powertrain during testing so temperatures for intake-air, oil, coolant, block, head, transmission, battery, and power electronics are within their expected ranges for normal operation.  You may use auxiliary coolers and fans.
(f) Set the dynamometer to operate in speed control.  Record data as described in 40 CFR 1065.202.  Design a vehicle model to measure torque and calculate the dynamometer speed setpoint at a rate of at least 100 Hz, as follows: 
    (1) Calculate the dynamometer's angular speed target, fnref,dyno, based on the simulated linear speed of the tires:
       
       	Eq. 1037.550-1
       Where:
       
       	Eq. 1037.550-2
       kd = axle ratio.  Set kd = 4.0 for all calculations in this section.
       ktopgear = transmission ratio in the highest available gear.
       v65 = reference speed.  Use 65 mph = 29.05 m/s.
       fn[speed] = engine's angular speed determined in paragraph (h) of this section.
       	Eq. 1037.550-3
       Where:
       vrefi = simulated vehicle reference speed.  Use unrounded result.
       i= a time-based counter corresponding to each measurement during the sampling period.  Let vref1=0; start calculations at i=2.  A 10-minute sampling period will generally involve 60,000 measurements.  
       T = instantaneous measured torque.
       Effaxle = axle efficiency.  Use Effaxle = 0.955 for T > 0, and use Effaxle = 1/0.955 for T < 0.  To calculate fnrefi,dyno for a dynamometer connected at the wheel hubs, as described in paragraph (f)(2) of this section, use Effaxle = 1.0. 
       M = vehicle mass for a vehicle class as determined in paragraph (h) of this section.
       g = gravitational acceleration.  Use g = 9.81 m/s[2].
       Crr = coefficient of rolling resistance for a vehicle class as determined in paragraph (h) of this section.
       Gi-1 = the percent grade interpolated at distance, Di-1 from the duty cycle in Appendix IV corresponding to measurement (i-1).
       
       	Eq. 1037.550-4
        = air density at reference conditions. Use  = 1.17 kg/m[3].
       CDA = drag area for a vehicle class as determined in paragraph (h) of this section.
       Fbrake = instantaneous braking force applied by the driver model.
       
       	Eq. 1037.550-5
       Δt = the time interval between measurements as measured by the test cell host computer; for example at 100 Hz this would be equal to 0.0100 seconds.
       Mrotating = inertial mass of rotating components as determined in paragraph (h) of this section.

       Example:
       Example is for Class 2b to 7 vocational vehicles with 6 speed automatic transmission at B speed (Test 4 in Table 1 of § 1037.550).
       kd = 4.0
       ktopgear = 0.6716
       fnrefB = 1870 rpm = 31.16 r/s
       v65 = 65 mph = 29.05 m/s
       T1000-1 = 500.0 Nm
       Crr = 6.9 kg/ton = 6.9∙10[-3] kg/kg
       M = 11408 kg
       CDA = 5.4 m[2]
       G1000-1 = 1.0% = 0.018
       
       
       
       
       Δt = 0.0100 s
       Mrotating = 454 kg
       
       vref1000 = 20.00128 m/s
       
   (2) For testing with the dynamometer connected at the wheel hubs, calculate fnref,dyno using the following equation:
      
      	Eq. 1037.550-6
(g) Design a driver model to mimic a human driver modulating the throttle and brake pedals to follow the test cycle as closely as possible.  The driver model must meet the requirements of § 1037.510 for steady-state testing and 40 CFR 1066.425(e) for transient testing.  Design the driver model to meet the following specifications:
   (1) Send a brake signal when throttle position is zero and vehicle speed is greater than the reference vehicle speed from the test cycle.  Include a delay before changing the brake signal to prevent dithering, consistent with good engineering judgment.
   (2) Allow braking only if throttle position is zero.
   (3) Compensate for the distance driven over the duty cycle over the course of the test. Use the following equation to perform the compensation in real time to determine your time in the cycle:
   
   	Eq. 1037.550-7
   Where:
   vvehicle = measured vehicle speed.
   vcycle = reference speed from the test cycle.  If vcycle,i-1 < 1.0 m/s, set vcycle,i-1 = vvehicle,i-1.
 
(h) Set up the driver model and the vehicle model in the test cell to test the powertrain, as follows:
   (1) For Class 2b through Class 7 vehicles, test the powertrain over eight different test runs.  For all test runs, set Mrotating to 454 kg, CDA to 5.4, kd to 4.0, and Effaxle to 0.955.   Set the tire radius, r, for each test run based on the vehicle configuration corresponding to the designated engine speed (A, B, C, or fntest, all from 40 CFR part 1065) at 65 mph.  These engine speeds apply equally for spark-ignition engines.  Use the following settings specific to each test run:
   
   Table 1 of § 1037.550  -  Vehicle Settings for Powertrain Testing of Class 2b through Class 7 Vehicles 
                                       
                                    Test 1
                                    Test 2
                                    Test 3
                                    Test 4
                                    Test 5
                                    Test 6
                                    Test 7
                                    Test 8
                                    M (kg)
                                     7,257
                                    11,408
                                     7,257
                                    11,408
                                     7,257
                                    11,408
                                     7,257
                                    11,408
                                 Crr (kg/ton)
                                      6.7
                                      6.9
                                      6.7
                                      6.9
                                      6.7
                                      6.9
                                      6.7
                                      6.9
                               r at engine speed
                                       A
                                       A
                                       B
                                       B
                                       C
                                       C
                              Maximum test speed
                              Maximum test speed
      
   (2) For Class 8 vehicles, test the powertrain over nine different test runs.  For all test runs, set Crr to 6.9, kd to 4.0, and Effaxle to 0.955.  Set the tire radius, r, for each test run based on the vehicle configuration corresponding to the designated engine speed (the minimum NTE exclusion speed as determined in 40 CFR 86.1370(b)(1), B, or fntest from 40 CFR part 1065) at 65 mph.  Use the settings specific to each test run from Table 2 of this section for general purpose vehicles, and from Table 3 of this section for heavy-haul tractors.  Tables 2 and 3 follow:

Table 2 of § 1037.550  -  Vehicle Settings for Powertrain Testing of Class 8 Vehicles  -  General Purpose Vehicles 
                                       
                                    Test 1
                                    Test 2
                                    Test 3
                                    Test 4
                                    Test 5
                                    Test 6
                                    Test 7
                                    Test 8
                                    Test 9
                                    M (kg)
                                    31,978
                                    22,679
                                    19,051
                                    31,978
                                    22,679
                                    19,051
                                    31,978
                                    22,679
                                    19,051
                                      CDA
                                      5.4
                                      4.7
                                      4.0
                                      5.4
                                      4.7
                                      4.0
                                      5.4
                                      4.7
                                      4.0
                                Mrotating (kg)
                                     1,134
                                      907
                                      680
                                     1,134
                                      907
                                      680
                                     1,134
                                      907
                                      680
                               r at engine speed
                          Minimum NTE exclusion speed
                          Minimum NTE exclusion speed
                          Minimum NTE exclusion speed
                                       B
                                       B
                                       B
                              Maximum test speed
                              Maximum test speed
                              Maximum test speed
                                          
Table 3 of § 1037.550  -  Vehicle Settings for Powertrain Testing of Heavy-Haul Tractors
                                       
                                    Test 1
                                    Test 2
                                    Test 3
                                    Test 4
                                    Test 5
                                    Test 6
                                    Test 7
                                    Test 8
                                    Test 9
                                    M (kg)
                                    40,895
                                    31,978
                                    22,679
                                    40,895
                                    31,978
                                    22,679
                                    40,895
                                    31,978
                                    22,679
                                      CDA
                                      6.1
                                      5.4
                                      4.7
                                      6.1
                                      5.4
                                      4.7
                                      6.1
                                      5.4
                                      4.7
                                Mrotating (kg)
                                     1,134
                                      907
                                      680
                                     1,134
                                      907
                                      680
                                     1,134
                                      907
                                      680
                               r at engine speed
                          Minimum NTE exclusion speed
                          Minimum NTE exclusion speed
                          Minimum NTE exclusion speed
                                       B
                                       B
                                       B
                              Maximum test speed
                              Maximum test speed
                              Maximum test speed

(i) Operate the powertrain over each of the duty cycles specified in § 1037.510(a)(2).
(j) Collect and measure emissions as described in 40 CFR part 1065.  For hybrid powertrains, correct for the net energy change of the energy storage device as described in 40 CFR 1066.501.
(k) For each test point, validate the measured output speed with the corresponding reference values.  You may delete points when the vehicle is stopped.  For steady-state tests (55 mph cruise, 65 mph cruise, and idle), apply cycle-validation criteria by treating the sampling periods from the three tests as a continuous sampling period.  Perform this validation based on the following parameters:

Table 4 of § 1037.550  -  Statistical criteria for validating duty cycles
                                   Parameter
                                 Speed Control
Slope, a1
                           0.990 < a1 < 1.010
Absolute value of intercept, |a0|
                       < 2.0 % of maximum test speed
Standard error of estimate, SEE
                       < 2.0 % of maximum test speed
Coefficient of determination, r[2]
                                  > 0.990

(l) [Reserved]
(m) Calculate mass of fuel consumed for all duty cycles except idle as follows:
   (1) For measurements involving measured fuel mass flow rate, calculate the mass of fuel for each duty cycle, mfuel[cycle], as follows:
   
   	Eq. 1037.550-8
   
   Where:
   N = total number of measurements over the duty cycle.  For batch fuel mass measurements, set N = 1.
   i = an indexing variable that represents one recorded value.
    = the fuel mass flow rate, for each point, i, starting from i = 1.
   ∆t = 1/frecord
   frecord = the data recording frequency.
   
   Example:
   N = 6680
    = 1.856 g/s
    = 1.962 g/s
   frecord = 10 Hz
   t = 1/10 = 0.1 s
   
   mfueltransient = 111.95 g
   
   (2) For measurements that do not involve measured fuel mass flow rate, calculate the mass of fuel for each duty cycle, mfuel[cycle], as follows:
      (i) For calculations that use continuous measurement of emissions and CO2 from urea, calculate mfuel[cycle] using the following equation:
      
      			Eq. 1037.550-9
      Where:
      N[event] = total number of measurements over the duty cycle.
      i = an indexing variable that represents one recorded emission value.
      wCref = reference carbon mass fraction of fuel as given in Table 1 of 40 CFR 1036.530.
      = exhaust molar flow rate from which you measured emissions.
      = amount of carbon from fuel in the exhaust per mole of dry exhaust.
      = amount of H2O in exhaust per mole of exhaust.
      j = an indexing variable that represents one recorded mass emission rate of CO2 from urea value.
      = mass emission rate of CO2 from the contribution of urea decomposition over the duty cycle as determined from 40 CFR 1036.535(a)(8).  If your engine does not utilize urea SCR for emission control, or if you choose not to perform this correction, set this value equal to 0.
      
      Example:
      MC = 12.0107 g/mol
      wCmeas = 0.867
      Nemission = 6680
      NCO2urea = 668
       = 2.876 mol/s 
       = 2.224 mol/s
       = 2.61∙10[-3] mol/mol 
      = 1.91∙10[-3] mol/mol 
      = 3.53∙10[-2] mol/mol
      = 3.13∙10[-2] mol/mol
      frecord-emission = 10 Hz
      temission = 1/10 = 0.1 s
      MCO2 = 44.0095 g/mol
      frecord-CO2urea = 1 Hz
      tCO2urea = 1/1 = 1.0 s
      = 0.0726 g/s
      = 0.0751 g/s
      
      mCO2transient = 1619.6 g
      (ii) If you measure batch emissions, calculate mfuel[cycle] using the following equation:
      
      			Eq. 1037.550-10
      (iii) If you measure continuous emissions and batch CO2 from urea, calculate mfuel[cycle] using the following equation:
      
   			Eq. 1037.550-11
      (iv) If you measure batch emissions and batch CO2 from urea, calculate mfuel[cycle] using the following equation:
      
   			Eq. 1037.550-12
   
(n) Determine the mass of CO2 emissions at idle as follows:
   (1) Measure fuel consumption with a fuel flow meter and report the mean fuel mass flow rate for each duty cycle, .
   (2) For measurements that do not involve measured fuel mass flow rate, calculate the fuel mass flow rate for each duty cycle, , for each set of vehicle settings, as follows:
   
   Eq. 1037.550-13
   Where:
   = the mean raw exhaust molar flow rate from which you measured emissions.
   = mass emission rate of CO2 from the contribution of urea decomposition over the duty cycle as determined from 40 CFR 1036.535(a)(8), for each point, i, starting from i = 1.  If your engine does not utilize urea SCR for emission control, or if you choose not to perform this correction, set this value equal to 0.
   
   MC = molar mass of carbon.
   wCmeas = carbon mass fraction of fuel as determined by 40 CFR 1065.655(d), except that you may not use the default properties in Table 1 of 40 CFR 1065.655 to determine α, , and wC for liquid fuels.
   = the mean raw exhaust molar flow rate from which you measured emissions according to 40 CFR 1065.655.
   = the mean concentration of carbon from fuel in the exhaust per mole of dry exhaust.
   = the mean concentration of H2O in exhaust per mole of dry exhaust.
   = the mean CO2 mass emission rate from urea decomposition as described in paragraph (c)(9) of this section.  If your engine does not utilize urea SCR for emission control, or if you choose not to perform this correction, set equal to 0.
   MCO2 = molar mass of carbon dioxide.
    
   Example: 
   MC = 12.0107 g/mol
   wCmeas = 0.867
   = 25.534 mol/s
   = 2.805∙10[-3] mol/mol 
   = 3.53∙10[-2] mol/mol
   = 0.0726 g/s
   MCO2 = 44.0095
   
   = 0.405 g/s = 1458.6 g/hr
(o) Include outputs in Table 5 as follows:
   (1) Your declared valued for CO2 emissions, as described in paragraph (b) of this section.  For idle, declare a CO2 mass emission rate, .  For all other cycles, declare CO2 mass emissions, mCO2[cycle], for each duty cycle.
   (2) Powertrain output speed per unit of vehicle speed. 
      (i) For dynamometers connected at the transmission output shaft:

      (ii) For dynamometers connected at the wheel hubs:

   (3) Positive work, W[cycle]powertrain, over the duty cycle at the transmission output or wheel hubs from the powertrain test.
   
      Table 5 of § 1037.550  -  Example test result output matrix for Class 8 vehicles.
                                       
                                    Test 1
                                    Test 2
                                    Test 3
                                    Test 4
                                    Test 5
                                    Test 6
                                    Test 7
                                    Test 8
                                    Test 9
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                              W[cycle]powertrain
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       

(p) Correct each result from paragraph (l)(1) of this section for the test fuel's mass-specific net energy content as described in paragraph of § 1036.530(b)(3). 
(q) For each test, record the engine speed and torque as defined in 40 CFR 1065.915(d)(5) with a minimum sampling frequency of 1 Hz.  These engine speed and torque values represent a duty cycle that can be used for separate testing with an engine mounted on an engine dynamometer, such as for a selective enforcement audit as described in §1037.301.

§ 1037.555 Special procedures for testing Phase 1 post-transmission hybrid systems.
This section describes the procedure for simulating a chassis test with a pre-transmission or post-transmission hybrid system for A to B testing.  These procedures may also be used to perform A to B testing with non-hybrid systems.
(a) Set up the engine according to 40 CFR 1065.110 to account for work inputs and outputs and accessory work.
(b) Collect CO2 emissions while operating the system over the test cycles specified in §1037.510(a)(1). 
(c) Collect and measure emissions as described in 40 CFR part 1066.  Calculate emission rates in grams per ton-mile without rounding.  Determine values for A, B, C, and M for the vehicle being simulated as specified in 40 CFR part 1066.  If you will apply an improvement factor or test results to multiple vehicle configurations, use values of A, B, C, M, kd, and r that represent the vehicle configuration with the smallest potential reduction in greenhouse gas emissions as a result of the hybrid capability. 
(d) Calculate the transmission output shaft's angular speed target for the driver model, fnref,driver, from the linear speed associated with the vehicle cycle using the following equation:

      Eq. 1037.555-1
Where:
vcyclei = vehicle speed of the test cycle for each point, i, starting from i=1.
kd = final drive ratio (the angular speed of the transmission output shaft divided by the angular speed of the drive axle), as declared by the manufacturer.
r = radius of the loaded tires, as declared by the manufacturer.
(e) Use speed control with a loop rate of at least 100 Hz to program the dynamometer to follow the test cycle, as follows: 
   (1) Calculate the transmission output shaft's angular speed target for the dynamometer, fnref,dyno, from the measured linear speed at the dynamometer rolls using the following equation:
   
      Eq. 1037.555-2
   Where:
   
      Eq. 1037.555-3
   T = instantaneous measured torque at the transmission output shaft.
   Fbrake = instantaneous brake force applied by the driver model to add force to slow down the vehicle.
   t = elapsed time in the driving schedule as measured by the dynamometer, in seconds. 
   (2) For each test, validate the measured transmission output shaft's speed with the corresponding reference values according to 40 CFR 1065.514(e). You may delete points when the vehicle is stopped.  Perform the validation based on speed values at the transmission output shaft.  For steady-state tests (55 mph and 65 mph cruise), apply cycle-validation criteria by treating the sampling periods from the two tests as a continuous sampling period.  Perform this validation based on the following parameters:
   
    Table 1 of § 1037.550  -  Statistical criteria for validating duty cycles
                                    Parameter
                                  Speed Control
   Slope, a1
                             0.950 < a1 < 1.030
   Absolute value of intercept, |a0|
                         < 2.0 % of maximum test speed
   Standard error of estimate, SEE
                          < 5 % of maximum test speed
   Coefficient of determination, r[2]
                                    > 0.970

(f) Send a brake signal when throttle position is equal to zero and vehicle speed is greater than the reference vehicle speed from the test cycle.  Set a delay before changing the brake state to prevent the brake signal from dithering, consistent with good engineering judgment.
(g) The driver model should be designed to follow the cycle as closely as possible and must meet the requirements of § 1037.510 for steady-state testing and 40 CFR 1066.430(e) for transient testing.  The driver model should be designed so that the brake and throttle are not applied at the same time.
(h) Correct for the net energy change of the energy storage device as described in 40 CFR 1066.501.
(i) Follow the provisions of §1037.510 to weight the cycle results and §1037.615 to calculate improvement factors and benefits for advanced technologies for Phase 1 vehicles. 

Subpart G -- Special Compliance Provisions
§ 1037.601  What compliance provisions apply?
(a) Engine and vehicle manufacturers, as well as owners and operators of vehicles subject to the requirements of this part, and all other persons, must observe the provisions of this part, the provisions of 40 CFR part 1068, and the provisions of the Clean Air Act.  The provisions of 40 CFR part 1068 apply for heavy-duty vehicles as specified in that part, subject to the following provisions:
   (1) Except as specifically allowed by this part, it is a violation of § 1068.101(a)(1) to introduce into U.S. commerce a tractor or vocational vehicle containing an engine not certified to the requirements of this part and 40 CFR part 86 corresponding to the calendar year for date of manufacture of the tractor or vocational vehicle.  Similarly, it is a violation to introduce into U.S. commerce a Phase 1 tractor containing an engine not certified for use in tractors; or to introduce into U.S. commerce a vocational vehicle containing a light heavy-duty or medium heavy-duty engine not certified for use in vocational vehicles.  These prohibitions apply especially to the vehicle manufacturer.  Note that this paragraph (a)(1) allows the use of Class 8 tractor engines in vocational vehicles.
   (2) The provisions of 40 CFR 1068.105(a) apply for vehicle manufacturers installing engines certified under 40 CFR part 1036 as further limited by this paragraph (a)(2).  If new engine emission standards apply in a given model year, you may install engines built before the date of the new or changed standards under the provisions of 40 CFR 1068.105(a) through March 31 of that year without our approval; you may not install such engines after March 31 of that year unless we approve it in advance.  In a written request for our approval, you must describe how your circumstances led you and your engine supplier to have normal inventories of engines that were not used up in the specified time frame. We will approve your request for up to three additional months to install up to 50 engines under this paragraph (a)(2) if we determine that the excess inventory is a result of unforeseeable circumstances and should not be considered circumvention of emission standards.
   (3)  The provisions of 40 CFR 1068.235 that allow for modifying certified vehicles and engines for competition do not apply for heavy-duty vehicles or heavy-duty engines.  Certified motor vehicles and motor vehicle engines and their emission control devices must remain in their certified configuration even if they are used solely for competition or if they become nonroad vehicles or engines; anyone modifying a certified motor vehicle or motor vehicle engine for any reason is subject to the tampering and defeat device prohibitions of 40 CFR 1068.101(b) and 42 U.S.C. 7522(a)(3).  Note that a new vehicle that will be used solely for competition may be excluded from the requirements of this part based on a determination that the vehicle is not a motor vehicle under 40 CFR 85.1703.  
   (5) The tampering prohibition in 40 CFR 1068.101(b)(1) applies for alternative fuel conversions as specified in 40 CFR part 85, subpart F.
   (6) The warranty-related prohibitions in section 203(a)(4) of the Act (42 U.S.C. 7522(a)(4)) apply to manufacturers of new heavy-duty highway vehicles in addition to the prohibitions described in 40 CFR 1068.101(b)(6).  We may assess a civil penalty up to $37,500 for each engine or vehicle in violation.
   (7) The hardship exemption provisions of 40 CFR 1068.245, 1068.250, and 1068.255 do not apply for heavy-duty vehicles.
   (7) A vehicle manufacturer that completes assembly of a vehicle at two or more facilities may ask to use as the date of manufacture for that vehicle the date on which manufacturing is completed at the place of main assembly, consistent with provisions of 49 CFR 567.4.  Note that such staged assembly is subject to the provisions of 40 CFR 1068.260(c).  Include your request in your application for certification, along with a summary of your staged-assembly process.  You may ask to apply this allowance to some or all of the vehicles in your vehicle family.  Our approval is effective when we grant your certificate.  We will not approve your request if we determine that you intend to use this allowance to circumvent the intent of this part.  
   (8) The provisions for selective enforcement audits apply as described in 40 CFR part 1068, subpart E, and §1037.301.
(b) Vehicles exempted from the applicable standards of 40 CFR part 86 are exempt from the standards of this part without request.  Similarly, vehicles are exempt without request if the installed engine is exempted from the applicable standards in 40 CFR part 86.
(c) The prohibitions of 40 CFR 86.1854 apply for vehicles subject to the requirements of this part.  The actions prohibited under this provision include the introduction into U.S. commerce of a complete or incomplete vehicle subject to the standards of this part where the vehicle is not covered by a valid certificate of conformity or exemption.
(d) The provisions of 40 CFR 85.1716 allow for approval of emergency vehicle field modifications.
(e) Under §1037.801, certain vehicles are considered to be new vehicles when they are imported into the United States, even if they have previously been used outside the country. Independent Commercial Importers may use the provisions of 40 CFR part 85, subpart P, and 40 CFR 85.1706(b) to receive a certificate of conformity for engines and vehicles meeting all the requirements of 40 CFR part 1036 and this part 1037.  
(f) Standards apply to multi-fuel engines and vehicles as described in 40 CFR 1036.601(d).
(g) All electric vehicles are deemed to have zero emissions of CO2, CH4, and N2O.  No emission testing is required for electric vehicles.  Use good engineering judgment to apply other requirements of this part to electric vehicles.

§1037.605  Installing engines certified to alternate standards for specialty vehicles.
(a) General provisions. This section allows vehicle manufacturers to introduce into U.S. commerce certain new motor vehicles if the engines are certified to alternate emission standards that are 
equivalent to standards that apply for nonroad engines under 40 CFR part 1039 or 1048.  See 40 CFR 86.007-11(g) and 40 CFR 86.008-10(g).  The provisions of this section apply for the following types of vehicles:
   (1) Vehicles with a hybrid powertrain in which the engine provides energy for the Rechargeable Energy Storage System.  
   (2) Amphibious vehicles. 
   (3) Vehicles with maximum speed at or below 45 miles per hour.  If your vehicle is speed-limited to meet this specification by reducing maximum speed below what is otherwise possible, this speed limitation must be programmed into the engine or vehicle's electronic control module in a way that is tamper-proof. If your vehicles are not inherently limited to a maximum speed at or below 45 miles per hour, they may qualify under this paragraph (a)(3) only if we approve your design to limit maximum speed as being tamper-proof in advance.
(b) Notification and reporting requirements. Send the Designated Compliance Officer written notification describing your plans before using the provisions of this section.  In addition, by February 28 of each calendar year (or less often if we tell you), send the Designated Compliance Officer a report with all the following information:
    (1) Identify your full corporate name, address, and telephone number.
    (2) List the vehicle and engine models for which you used this exemption in the previous year and identify the total number of vehicles. 
(c) Production limits. . You may produce up to 1,000 hybrid vehicles, up to 200 amphibious vehicles, and up to 200 speed-limited vehicles under this section in a given model year.  This includes vehicles produced by affiliated companies.  If you exceed this limit, the exemption is void for the number of vehicles that exceed the limit for the model year.  For the purpose of this paragraph (c), we will include all vehicles labeled or otherwise identified as exempt under this section.
(d) Vehicle standards. Vehicles using the provisions of this section remain subject to all other requirements of this part 1037.  For example, you must use GEM to demonstrate compliance with emission standards under subpart B of this part. 

§ 1037.610  Vehicles with off-cycle technologies.
(a) You may ask us to apply the provisions of this section for CO2 emission reductions resulting from vehicle technologies that were not in common use with heavy-duty vehicles before model year 2010 that are not reflected in the GEM simulation tool.  These may be described as off-cycle or innovative technologies.  These provisions may be applied for CO2 emission reductions reflected using the specified test procedures, provided they are not reflected in the GEM.  We will apply these provisions only for technologies that will result in measurable, demonstrable, and verifiable real-world CO2 emission reductions.  
(b) The provisions of this section may be applied as either an improvement factor or as a separate credit within the vehicle family, consistent with good engineering judgment.  We recommend that you base your credit/adjustment on A to B testing of pairs of vehicles differing only with respect to the technology in question. 
   (1) Calculate improvement factors as the ratio of in-use emissions with the technology divided by the in-use emissions without the technology.  Use the improvement-factor approach where good engineering judgment indicates that the actual benefit will be proportional to emissions measured over the test procedures specified in this part.  
   (2) Calculate separate credits (g/ton-mile) based on the difference between the in-use emission rate with the technology and the in-use emission rate without the technology.  Subtract this value from your GEM result and use this adjusted value to determine your FEL.  Use the separate-credit approach where good engineering judgment indicates that the actual benefit will be not be proportional to emissions measured over the test procedures specified in this part.
   (3) We may require you to discount or otherwise adjust your improvement factor or credit to account for uncertainty or other relevant factors.
(c) You may perform A to B testing by measuring emissions from the vehicles during chassis testing or from in-use on-road testing.  We recommend that you perform on-road testing according to SAE J1321 Joint TMC/SAE Fuel Consumption Test Procedure Type II Reaffirmed 1986-10 or SAE J1526 Joint TMC/SAE Fuel Consumption In-Service Test Procedure Type III Issued 1987-06 (see §1037.810 for information on availability of SAE standards), subject to the following provisions:
   (1) The minimum route distance is 100 miles.  
   (2) The route selected must be representative in terms of grade.  We will take into account published and relevant research in determining whether the grade is representative.  
   (3) The vehicle speed over the route must be representative of the drive-cycle weighting adopted for each regulatory subcategory.  For example, if the route selected for an evaluation of a combination tractor with a sleeper cab contains only interstate driving, the improvement factor would apply only to 86 percent of the weighted result.  
   (4) The ambient air temperature must be between (5 and 35) °C, unless the technology requires other temperatures for demonstration.  
   (5) We may allow you to use a Portable Emissions Measurement System (PEMS) device for measuring CO2 emissions during the on-road testing.
(d) Send your request to the Designated Compliance Officer.  We recommend that you do not begin collecting test data (for submission to EPA) before contacting us.  For technologies for which the engine manufacturer could also claim credits (such as transmissions in certain circumstances), we may require you to include a letter from the engine manufacturer stating that it will not seek credits for the same technology.  Your request must contain the following items:
   (1) A detailed description of the off-cycle technology and how it functions to reduce CO2 emissions under conditions not represented on the duty cycles required for certification.
   (2) A list of the vehicle configurations that will be equipped with the technology.
   (3) A detailed description and justification of the selected test vehicles.
   (4) All testing and simulation data required under this section, plus any other data you have considered in your analysis.  You may ask for our preliminary approval of your test plan under §1037.210.
   (5) A complete description of the methodology used to estimate the off-cycle benefit of the technology and all supporting data, including vehicle testing and in-use activity data.  Also include a statement regarding your recommendation for applying the provisions of this section for the given technology as an improvement factor or a credit.
   (6) An estimate of the off-cycle benefit by vehicle model, and the fleetwide benefit based on projected sales of vehicle models equipped with the technology.
   (7) A demonstration of the in-use durability of the off-cycle technology, based on any available engineering analysis or durability testing data (either by testing components or whole vehicles).
(e) We may seek public comment on your request, consistent with the provisions of 40 CFR 86.1866.  However, we will generally not seek public comment on credits or adjustments based on A to B chassis testing performed according to the duty-cycle testing requirements of this part or in-use testing performed according to paragraph (c) of this section.
(f) We may approve an improvement factor or credit for any vehicle family that is properly represented by your testing.  You may similarly continue to use an approved improvement factor or credit for any appropriate vehicle families in future model years through 2020.  Starting in model year 2021, you must request our approval before applying an improvement factor or credit under this section for any kind of technology, even if we approved an improvement factor or credit for similar vehicle models before model year 2021.

§ 1037.615  Hybrid vehicles and other advanced technologies.
(a) This section applies to Phase 1 for hybrid vehicles with regenerative braking, vehicles equipped with Rankine-cycle engines, electric vehicles, and fuel cell vehicles.  You may not generate credits for engine features for which the engines generate credits under 40 CFR part 1036. 
(b) Generate advanced technology emission credits for hybrid vehicles that include regenerative braking (or the equivalent) and energy storage systems, fuel cell vehicles, and vehicles equipped with Rankine-cycle engines as follows: 
   (1) Measure the effectiveness of the advanced system by chassis testing a vehicle equipped with the advanced system and an equivalent conventional vehicle, or by testing the hybrid systems and the equivalent non-hybrid systems as described in § 1037.550. Test the vehicles as specified in subpart F of this part. For purposes of this paragraph (b), a conventional vehicle is considered to be equivalent if it has the same footprint (as defined in 40 CFR 86.1803), vehicle service class, aerodynamic drag, and other relevant factors not directly related to the hybrid powertrain. If you use § 1037.540 to quantify the benefits of a hybrid system for PTO operation, the conventional vehicle must have the same number of PTO circuits and have equivalent PTO power. If you do not produce an equivalent vehicle, you may create and test a prototype equivalent vehicle. The conventional vehicle is considered Vehicle A and the advanced vehicle is considered Vehicle B. We may specify an alternate cycle if your vehicle includes a power take-off.
    (2) Calculate an improvement factor and g/ton-mile benefit using the following equations and parameters:
      (i) Improvement Factor = [(Emission Rate A)  -  (Emission Rate B)]/(Emission Rate A)
      (ii) g/ton-mile benefit = Improvement Factor x (GEM Result B)
      (iii) Emission Rates A and B are the g/ton-mile CO2 emission rates of the conventional and advanced vehicles, respectively, as measured under the test procedures specified in this section.  GEM Result B is the g/ton-mile CO2 emission rate resulting from emission modeling of the advanced vehicle as specified in §1037.520.
   (3) If you apply an improvement factor to multiple vehicle configurations using the same advanced technology, use the vehicle configuration with the smallest potential reduction in greenhouse gas emissions resulting from the hybrid capability.  
   (4) Use the equations of §1037.705 to convert the g/ton-mile benefit to emission credits (in Mg).  Use the g/ton-mile benefit in place of the (Std-FEL) term. 
(c) See §1037.540 for special testing provisions related to vehicles equipped with hybrid power take-off units.
(d) You may use an engineering analysis to calculate an improvement factor for fuel cell vehicles based on measured emissions from the fuel cell vehicle.
(e) For electric vehicles, calculate CO2 credits using an FEL of 0 g/ton-mile.
(f) As specified in subpart H of this part, credits generated under this section may be used under this part 1037 outside of the averaging set in which they were generated or used under 40 CFR part 1036.  
(g) You may certify using both provisions of this section and the off-cycle technology provisions of §1037.610, provided you do not double count emission benefits. 

§ 1037.620  Responsibilities for multiple manufacturers.
This section describes certain circumstances in which multiple manufacturers share responsibilities for vehicle they produce together.  This section does limit responsibilities that apply under the Act or these regulations for anyone meeting the definition of "manufacturer" in §1037.801. 
(a) The delegated assembly provisions of §1037.621 apply for certifying manufacturers that rely on other manufacturers to finish assembly in a certified configuration.  The provisions of §1037.622 apply for manufacturers that ship vehicles subject to the requirements of this section to a certifying secondary vehicle manufacturer.  The provisions of §1037.622 also apply to the secondary manufacturer.
(b) Manufacturers of aerodynamic devices may perform the aerodynamic testing described in §1037.525 to quantify CDA values for trailers and submit that data to EPA verification under §1037.211.  Trailer manufacturers may use such verified data to establish GEM inputs for certifying their trailers.  Both device manufacturers and trailer manufacturers are subject to the recall provisions described in 40 CFR part 1068, subpart F.

§ 1037.621  Delegated assembly.
(a) This section describes an exemption that allows certificate holders to sell or ship vehicles that are missing certain emission-related components if those components will be installed by a secondary vehicle manufacturer.  (Note: See §1037.622 for provisions related to manufacturers introducing into U.S. commerce partially complete vehicles for which a secondary vehicle manufacturer holds the certificate of conformity.)  This exemption is temporary as described in paragraph (f) of this section.
(b) The provisions of 40 CFR 1068.261 apply for vehicles subject to GHG standards under this part, with the following exceptions and clarifications:
   (1) Understand references to "engines" to refer to vehicles.  
   (2) Understand references to "aftertreatment components" to refer to any emission-related components needed for complying with GHG standards under this part.  
   (3) Understand "equipment manufacturers" to be secondary vehicle manufacturers.
   (4) The provisions of 40 CFR 1068.261(b), (c)(7), (d), and (e) do not apply. Accordingly, the provisions of 40 CFR 1068.261(c) apply regardless of pricing arrangements.

§ 1037.622  Shipment of incomplete vehicles to secondary vehicle manufacturers.
This section specifies how manufacturers may introduce partially complete vehicles into U.S. commerce.  The provisions of this section do not apply for trailers, except in unusual circumstances.  You may not use the provisions of this section to circumvent the intent of this part.
(a) The provisions of this section allow manufacturers to ship partially complete vehicles to secondary vehicle manufacturers or otherwise introduce them into U.S. commerce in the following circumstances:
   (1) Tractors.  Manufacturers may introduce partially complete tractors into U.S. commerce if they are covered by a certificate of conformity for tractors and will be in their certified tractor configuration before they reach the ultimate purchasers.  For example, this would apply for sleepers initially shipped without the sleeper compartments attached.  Small businesses that build custom sleeper cabs may modify complete or incomplete vehicles certified as tractors under this section, as long as they do not increase the effective frontal area of the certified configuration.  Note that delegated assembly provisions may apply (see §1037.621).
   (2) Vocational vehicles. Manufacturers may introduce partially complete vocational vehicles into U.S. commerce if they are covered by a certificate of conformity for vocational vehicles and will be in their certified vocational configuration before they reach the ultimate purchasers.  Note that delegated assembly provisions may apply (see §1037.621).
   (3) Uncertified vehicles that will be certified by secondary vehicle manufacturers. Manufacturers may introduce into U.S. commerce partially complete vehicles for which they do not hold a certificate of conformity only as allowed by paragraph (b) of this section; however, the requirements of this section do not apply for tractors or vocational vehicles built before January 1, 2022, that are produced by a secondary vehicle manufacturer if they are excluded from the standards of this part under § 1037.150(c).
(b) The provisions of this paragraph (b) apply where the secondary vehicle manufacturer has substantial control over the design and assembly of emission controls.  In determining whether a manufacturer has substantial control over the design and assembly of emission controls, we would consider the degree to which the secondary manufacturer would be able to ensure that the engine and vehicle will conform to the regulations in their final configurations. 
   (1) A secondary manufacturer may finish assembly of partially complete vehicles in the following cases:
      (i) It obtains a vehicle that is not fully assembled with the intent to manufacture a complete vehicle in a certified configuration.
      (ii) It obtains a vehicle with the intent to modify it to a certified configuration before it reaches the ultimate purchaser.  For example, this may apply for converting a gasoline-fueled vehicle to operate on natural gas under the terms of a valid certificate.
   (2) Manufacturers may introduce partially complete vehicles into U.S. commerce as described in this paragraph (b) if they have a written request for such vehicles from a secondary vehicle manufacturer that will finish the vehicle assembly and has certified the vehicle (or the vehicle has been exempted or excluded from the requirements of this part).  The written request must include a statement that the secondary manufacturer has a certificate of conformity (or exemption/exclusion) for the vehicle and identify a valid vehicle family name associated with each vehicle model ordered (or the basis for an exemption/exclusion). The original vehicle manufacturer must apply a removable label meeting the requirements of 40 CFR 1068.45 that identifies the corporate name of the original manufacturer and states that the vehicle is exempt under the provisions of §1037.622. The name of the certifying manufacturer must also be on the label or, alternatively, on the bill of lading that accompanies the vehicles during shipment. The original manufacturer may not apply a permanent emission control information label identifying the vehicle's eventual status as a certified vehicle.
   (3) If you are the secondary manufacturer and you will hold the certificate, you must include the following information in your application for certification:
      (i) Identify the original manufacturer of the partially complete vehicle or of the complete vehicle you will modify.
      (ii) Describe briefly how and where final assembly will be completed. Specify how you have the ability to ensure that the vehicles will conform to the regulations in their final configuration. (Note: This section prohibits using the provisions of this paragraph (b) unless you have substantial control over the design and assembly of emission controls.)
      (iii) State unconditionally that you will not distribute the vehicles without conforming to all applicable regulations.
   (4) If you are a secondary manufacturer and you are already a certificate holder for other families, you may receive shipment of partially complete vehicles after you apply for a certificate of conformity but before the certificate's effective date. This exemption allows the original manufacturer to ship vehicles after you have applied for a certificate of conformity. Manufacturers may introduce partially complete vehicles into U.S. commerce as described in this paragraph (b)(4) if they have a written request for such vehicles from a secondary manufacturer stating that the application for certification has been submitted (instead of the information we specify in paragraph (b)(2) of this section). We may set additional conditions under this paragraph (b)(4) to prevent circumvention of regulatory requirements. 
   (5) The provisions of this section also apply for shipping partially complete vehicles if the vehicle is covered by a valid exemption and there is no valid family name that could be used to represent the vehicle model. Unless we approve otherwise in advance, you may do this only when shipping engines to secondary manufacturers that are certificate holders. In this case, the secondary manufacturer must identify the regulatory cite identifying the applicable exemption instead of a valid family name when ordering engines from the original vehicle manufacturer.
   (6) Both original and secondary manufacturers must keep the records described in this section for at least five years, including the written request for exempted vehicles and the bill of lading for each shipment (if applicable). The written request is deemed to be a submission to EPA.
   (7) These provisions are intended only to allow secondary manufacturers to obtain or transport vehicles in the specific circumstances identified in this section so any exemption under this section expires when the vehicle reaches the point of final assembly identified in paragraph (b)(3)(ii) of this section.
   (8) For purposes of this section, an allowance to introduce partially complete vehicles into U.S. commerce includes a conditional allowance to sell, introduce, or deliver such vehicles into commerce in the United States or import them into the United States. It does not include a general allowance to offer such vehicles for sale because this exemption is intended to apply only for cases in which the certificate holder already has an arrangement to purchase the vehicles from the original manufacturer. This exemption does not allow the original manufacturer to subsequently offer the vehicles for sale to a different manufacturer who will hold the certificate unless that second manufacturer has also complied with the requirements of this part. The exemption does not apply for any individual vehicles that are not labeled as specified in this section or which are shipped to someone who is not a certificate holder.
   (9) We may suspend, revoke, or void an exemption under this section, as follows:
      (i) We may suspend or revoke your exemption if you fail to meet the requirements of this section. We may suspend or revoke an exemption related to a specific secondary manufacturer if that manufacturer sells vehicles that are in not in a certified configuration in violation of the regulations. We may disallow this exemption for future shipments to the affected secondary manufacturer or set additional conditions to ensure that vehicles will be assembled in the certified configuration.
      (ii) We may void an exemption for all the affected vehicles if you intentionally submit false or incomplete information or fail to keep and provide to EPA the records required by this section.
      (iii) The exemption is void for a vehicle that is shipped to a company that is not a certificate holder or for a vehicle that is shipped to a secondary manufacturer that is not in compliance with the requirements of this section.
      (iv) The secondary manufacturer may be liable for penalties for causing a prohibited act where the exemption is voided due to actions on the part of the secondary manufacturer.
(c) Provide instructions along with partially complete vehicles including all information necessary to ensure that an engine will be installed in its certified configuration.  

§ 1037.630  Special purpose tractors.
(a) General provisions.  This section allows a vehicle manufacturer to reclassify certain tractors as vocational tractors.  Vocational tractors are treated as vocational vehicles and are exempt from the standards of §1037.106.  Note that references to "tractors" outside of this section mean non-vocational tractors.
   (1)  This allowance is intended only for vehicles that do not typically operate at highway speeds, or would otherwise not benefit from efficiency improvements designed for line-haul tractors.  This allowance is limited to the following vehicle and application types:
      (i)  Low-roof tractors intended for intra-city pickup and delivery, such as those that deliver bottled beverages to retail stores.
      (ii) Tractors intended for off-road operation (including mixed service operation), such as those with reinforced frames and increased ground clearance. 
      (iii) Tractors with a GCWR over 120,000 pounds (through model year 2020 only).
   (2) Where we determine that a manufacturer is not applying this allowance in good faith, we may require the manufacturer to obtain preliminary approval before using this allowance.  
(b)  Requirements.  The following requirements apply with respect to tractors reclassified under this section:
   (1) The vehicle must fully conform to all requirements applicable to vocational vehicles under this part. 
   (2) Vehicles reclassified under this section must be certified as a separate vehicle family.  However, they remain part of the vocational regulatory subcategory and averaging set that applies for their weight class.
   (3) You must include the following additional statement on the vehicle's emission control information label under §1037.135: "THIS VEHICLE WAS CERTIFIED AS A VOCATIONAL TRACTOR UNDER 40 CFR 1037.630."
   (4) You must keep records for three years to document your basis for believing the vehicles will be used as described in paragraph (a)(1) of this section.  Include in your application for certification a brief description of your basis.
(c) Production limit.  No manufacturer may produce more than 21,000 vehicles under this section in any consecutive three model year period.  This means you may not exceed 6,000 in a given model year if the combined total for the previous two years was 15,000.  The production limit applies with respect to all Class 7 and Class 8 tractors certified or exempted as vocational tractors.  Note that in most cases, the provisions of paragraph (a) of this section will limit the allowable number of vehicles to be a number lower than the production limit of this paragraph (c). 
(d) Off-road exemption.  All the provisions of this section apply for vocational tractors exempted under §1037.631, except as follows:
   (1) The vehicles are required to comply with the requirements of §1037.631 instead of the requirements that would otherwise apply to vocational vehicles.  Vehicles complying with the requirements of §1037.631 and using an engine certified to the standards of 40 CFR part 1036 are deemed to fully conform to all requirements applicable to vocational vehicles under this part. 
   (2) The vehicles must be labeled as specified under §1037.631 instead of as specified in paragraph (b)(3) of this section.
   
§ 1037.631  Exemption for vocational vehicles intended for off-road use.
This section provides an exemption from the greenhouse gas standards of this part for certain vocational vehicles intended to be used extensively in off-road environments such as forests, oil fields, and construction sites.  This section does not exempt engines used in vocational vehicles from the standards of 40 CFR part 86 or part 1036.  Note that you may not include these exempted vehicles in any credit calculations under this part.  Note also that trailers intended for off-road use are generally excluded from the requirements of this part under §1037.5.
(a) Qualifying criteria. Vocational vehicles intended for off-road use are exempt without request, subject to the provisions of this section, if they are primarily designed to perform work off-road (such as in oil fields, mining, forests, or construction sites), and they meet at least one of the criteria of paragraph (a)(1) of this section and at least one of the criteria of paragraph (a)(2) of this section. 
    (1) The vehicle must have affixed components designed to work in an off-road environment (i.e., hazardous material equipment or off-road drill equipment) or be designed to operate at low speeds such that it is unsuitable for normal highway operation.
    (2) The vehicle must meet one of the following criteria:
       (i) Have an axle that has a gross axle weight rating (GAWR) at or above 29,000 pounds.
       (ii) Have a speed attainable in 2.0 miles of not more than 33 mph. 
       (iii) Have a speed attainable in 2.0 miles of not more than 45 mph, an unloaded vehicle weight that is not less than 95 percent of its gross vehicle weight rating, and no capacity to carry occupants other than the driver and operating crew.
(b) Tractors. The provisions of this section may apply for tractors only if each tractor qualifies as a vocational tractor under §1037.630.
   (c) Recordkeeping and reporting.  (1) You must keep records to document that your exempted vehicle configurations meet all applicable requirements of this section.  Keep these records for at least eight years after you stop producing the exempted vehicle model.  We may review these records at any time.  
   (2) You must also keep records of the individual exempted vehicles you produce, including the vehicle identification number and a description of the vehicle configuration. 
   (3) Within 90 days after the end of each model year, you must send to the Designated Compliance Officer a report with the following information:
      (i) A description of each exempted vehicle configuration, including an explanation of why it qualifies for this exemption.
      (ii) The number of vehicles exempted for each vehicle configuration.  
(d) Labeling.  You must include the following additional statement on the vehicle's emission control information label under §1037.135: "THIS VEHICLE WAS EXEMPTED UNDER 40 CFR 1037.631."

§1037.635 Glider kits.
Starting in model year 2018, §1037.601(a)(1) generally disallows the introduction into U.S. commerce of a new tractor or vocational vehicle (including a vehicle assembled from a glider kit) unless it has an engine that is certified to the standards that apply for the engine model year corresponding to the vehicle'sdate of manufacture.  For example, for a vehicle with a 2020 date of manufacture, the engine must meet the standards that apply for model year 2020.  Note that the engine may be from an earlier model year if the standards were identical.  This section describes an exemption from the certification requirement that applies for qualifying manufacturers.  Note that the Clean Air Act definition of "manufacturer" includes anyone who assembles motor vehicles, including entities that install engines in or otherwise complete assembly of glider kits.
(a) Vehicles conforming to the requirements of this section are exempt from the emission standards of this part.  Engines in such vehicles remain subject to the requirements of 40 CFR part 86 applicable for the engines' original model year, but are exempt from the standards of 40 CFR part 1036. 
(b) You are eligible for an exemption under this section if you are a small manufacturer and you sold vehicles in 2014 under the the provisions of §1037.150(j).  You must notify us of your plans to use this exemption before you introduce exempt vehicles into U.S. commerce. In your notification, you must identify your annual sales of such vehicles for calendar years 2010 through 2014. 
(c) In a given calendar year, you may sell up to 300 exempt vehicles under this section, or up to the highest annual sales volume you identify in paragraph (a) of this section, whichever is less.  
(d) Identify the number of exempt vehicles you sold under this section for the year in your annual report under §1037.250,
(e) Include the following statement on the label required under §1037.135: "THIS VEHICLE'S ENGINE IS EXEMPT UNDER 40 CFR 1037.635."
(f)This exemption is valid for a given vehicle only if you meet all the requirements and conditions of this section that apply with respect to that vehicle.  Introducing such a vehicle into U.S. commerce without meeting all applicable requirements and conditions violates 40 CFR 1068.101(a)(1).
(g) Companies that are not small manufacturers may sell uncertified incomplete vhicles without engines to small manufactuerrs for the purpose of producing exempt vehicles under this section, subject to the provisions of §1037.622.

§ 1037.640  Variable vehicle speed limiters. 
This section specifies provisions that apply for vehicle speed limiters (VSLs) that you model under §1037.520.  This does not apply for VSLs that you do not model under §1037.520.
(a) General.  The regulations of this part do not constrain how you may design VSLs for your vehicles.  For example, you may design your VSL to have a single fixed speed limit or a soft-top speed limit.  You may also design your VSL to expire after accumulation of a predetermined number of miles.  However, designs with soft tops or expiration features are subject to proration provisions under this section that do not apply to fixed VSLs that do not expire.
(b) Definitions. The following definitions apply for purposes of this section:
   (1) Default speed limit means the speed limit that normally applies for the vehicle, except as follows:
      (i) The default speed limit for adjustable VSLs must represent the speed limit that applies when the VSL is adjusted to its highest setting under paragraph (c) of this section.
      (ii) For VSLs with soft tops, the default speed does not include speeds possible only during soft-top operation.
      (iii) For expiring VSLs, the default does not include speeds that are possible only after expiration.
   (2) Soft-top speed limit means the highest speed limit that applies during soft-top operation.
   (3) Maximum soft-top duration means the maximum amount of time that a vehicle could operate above the default speed limit.  
   (4) Certified VSL means a VSL configuration that applies when a vehicle is new and until it expires.
   (5) Expiration point means the mileage at which a vehicle's certified VSL expires (or the point at which tamper protections expire). 
   (6) Effective speed limit has the meaning given in paragraph (d) of this section. 
(c) Adjustments.  You may design your VSL to be adjustable; however, this may affect the value you use in the GEM.
   (1) Except as specified in paragraph (c)(2) of this section, any adjustments that can be made to the engine, vehicle, or their controls that change the VSL's actual speed limit are considered to be adjustable operating parameters.  Compliance is based on the vehicle being adjusted to the highest speed limit within this range.
   (2) The following adjustments are not adjustable parameters:
      (i) Adjustments made only to account for changing tire size or final drive ratio.
      (ii) Adjustments protected by encrypted controls or passwords.
      (iii) Adjustments possible only after the VSL's expiration point.
   (d) Effective speed limit.  (1) For VSLs without soft tops or expiration points that expire before 1,259,000 miles, the effective speed limit is the highest speed limit that results by adjusting the VSL or other vehicle parameters consistent with the provisions of paragraph (c) of this section.
   (2)  For VSLs with soft tops and/or expiration points, the effective speed limit is calculated as specified in this paragraph (d)(2), which is based on 10 hours of operation per day (394 miles per day for day cabs and 551 miles per day for sleeper cabs).  Note that this calculation assumes that a fraction of this operation is speed limited (3.9 hours and 252 miles for day cabs, and 7.3 hours and 474 miles for sleeper cabs).  Use the following equation to calculate the effective speed limit, rounded to the nearest 0.1 mph:
   Effective speed = ExF * [STF* STSL + (1-STF) * DSL] + (1-ExF)*65 mph 
   Where:
   ExF = expiration point miles/1,259,000 miles
   STF = maximum number of allowable soft top operation hours per day / 3.9 hours for day cabs (or maximum miles per day / 252)
   STF = maximum number of allowable soft top operation hours per day / 7.3 hours for sleeper cabs (or maximum miles per day / 474)
   STSL = the soft top speed limit
   DSL = the default speed limit
   
§ 1037.645 In-use compliance with family emission limits (FELs).
You may ask us to apply a higher in-use FEL for certain in-use vehicles, subject to the provisions of this section.  Note that §1037.225 contains provisions related to changing FELs during a model year.
(a) Purpose.  This section is intended to address circumstances in which it is in the public interest to apply a higher in-use FEL based on forfeiting an appropriate number of emission credits.  
(b) FELs.  We may apply higher in-use FELs to your vehicles as follows:
      (1) Where your vehicle family includes more than one sub-family with different FELs, we may apply a higher FEL within the family than was applied to the vehicle's configuration in your final ABT report.  For example, if your vehicle family included three sub-families with FELs of 200 g/ton-mile, 210 g/ton-mile, and 220 g/ton-mile, we may apply a 220 g/ton-mile in-use FEL to vehicles that were originally designated as part of the 200 g/ton-mile or 210 g/ton-mile sub-families.
      (2) Without regard to the number of sub-families in your certified vehicle family, we may specify new sub-families with higher FELs than were included in your final ABT report.  We may apply these higher FELs as in-use FELs for your vehicles.  For example, if your vehicle family included three sub-families with FELs of 200 g/ton-mile, 210 g/ton-mile, and 220 g/ton-mile, we may specify a new 230 g/ton-mile sub-family.
      (3) In specifying sub-families and in-use FELs, we would intend to accurately reflect the actual in-use performance of your vehicles, consistent with the specified testing and modeling provisions of this part.
(c) Equivalent families.  We may apply the higher FELs to other families in other model years if they used equivalent emission controls.
(d) Credit forfeiture.  Where we specify higher in-use FELs under this section, you must forfeit CO2 emission credits based on the difference between the in-use FEL and the otherwise applicable FEL.  Calculate the amount of credits to be forfeited using the applicable equation in §1037.705, by substituting the otherwise applicable FEL for the standard and the in-use FEL for the otherwise applicable FEL.
(e) Requests.  Submit your request to the Designated Compliance Officer.  Include the following in your request:
      (1) The vehicle family name, model year, and name/description of the configuration(s) affected.
      (2) A list of other vehicle families/configurations/model years that may be affected.
      (3) The otherwise applicable FEL for each configuration along with your recommendations for higher in-use FELs.
      (4) Your source of credits for forfeiture. 
(f) Relation to recall.  You may not request higher in-use FELs for any vehicle families for which we have made a determination of nonconformance and ordered a recall.  You may, however, make such requests for vehicle families for which you are performing a voluntary emission recall.
(g) Approval.  We may approve your request if we determine that you meet the requirements of this section and such approval is in the public interest.  We may include appropriate conditions with our approval or we may approve your request with modifications.

§ 1037.650  Tire manufacturers.
This section describes how the requirements of this part apply with respect to tire manufacturers that choose to provide test data or emission warranties for purposes of this part.
(a) Testing.  You are responsible as follows for test tires and emission test results that you provide to vehicle manufacturers for the purpose of the manufacturer submitting them to EPA for certification under this part:  
(1) Such test results are deemed under §1037.825 to be submissions to EPA.  This means that you may be subject to criminal penalties under 18 U.S.C. 1001 if you knowingly submit false test results to the manufacturer.
(2) You may not cause a vehicle manufacturer to violate the regulations by rendering inaccurate emission test results you provide (or emission test results from testing of test tires you provide) to the vehicle manufacturer.  
(3) Your provision of test tires and emission test results to vehicle manufacturers for the purpose of certifying under this part is deemed to be an agreement to provide tires to EPA for confirmatory testing under §1037.201.
(b) Warranty.  You may contractually agree to process emission warranty claims on behalf of the manufacturer certifying the vehicle with respect to tires you produce.  
(1) Your fulfillment of the warranty requirements of this part is deemed to fulfill the vehicle manufacturer's warranty obligations under this part with respect to tires you warrant.
(2) You may not cause a vehicle manufacturer to violate the regulations by failing to fulfill the emission warranty requirements that you contractually agreed to fulfill. 
   
§ 1037.655  Post-useful life vehicle modifications.
This section specifies vehicle modifications that may occur in some but not all circumstances after a vehicle reaches the end of its regulatory useful life.  It does not apply with respect to modifications that occur within the useful life period.  It also does not apply with respect to engine modifications or recalibrations.  Note that many such modifications to the vehicle during the useful life and to the engine at any time are presumed to violate 42 U.S.C 7522(a)(3)(A).
(a)  General.  Except as allowed by this section, it is prohibited for any person to remove or render inoperative any emission control device installed to comply with the requirements of this part 1037.
(b)  Allowable modifications.  You may modify a vehicle for the purpose of reducing emissions, provided you have a reasonable technical basis for knowing that such modification will not increase emissions of any other pollutant.  Reasonable technical basis has the meaning given in 40 CFR 1068.30.  This generally requires you to have information that would lead an engineer or other person familiar with engine and vehicle design and function to reasonably believe that the modifications will not increase emissions of any regulated pollutant.
(c) Examples of allowable modifications.  The following are examples of allowable modifications:
    (1) It is generally allowable to remove tractor roof fairings after the end of the vehicle's useful life if the vehicle will no longer be used primarily to pull box trailers.
    (2) Other fairings may be removed after the end of the vehicle's useful life if the vehicle will no longer be used significantly on highways with vehicle speed of 55 miles per hour or higher.
(d) Examples of prohibited modifications.  The following are examples of modifications that are not allowable:
    (1)  No person may disable a vehicle speed limiter prior to its expiration point.
    (2)  No person may remove aerodynamic fairings from tractors that are used primarily to pull box trailers on highways.
      
§ 1037.660 Automatic engine shutdown systems.
This section specifies requirements that apply for certified automatic engine shutdown (AES) systems modeled under § 1037.520. It does not apply for AES systems you do not model under § 1037.520.
(a) Minimum requirements. Your AES system must meet all of the requirements of this paragraph (a) to be modeled under §1037.520.  The system must shut down the engine within 300 seconds when all the following conditions are met:
    (1) The transmission is set in neutral with the parking brake engaged (or the transmission is set to park if so equipped).
    (2) The operator has not reset the system timer within the 300 seconds by changing the position of the accelerator, brake, or clutch pedal; or by some other mechanism we approve.
    (3) None of the override conditions of paragraph (b) of this section are met.
(b) Override conditions.  The system may delay shutting the engine down while any of the conditions of this paragraph (b) apply.  Engines equipped with auto restart may restart during override conditions.  Note that these conditions allow the system to delay shutdown or restart, but do not allow it to reset the timer.  The system may delay shutdown -- 
    (1) While an exhaust emission control device is regenerating.  The period considered to be regeneration for purposes of this allowance must be consistent with good engineering judgment and may differ in length from the period considered to be regeneration for other purposes.  For example, in some cases it may be appropriate to include a cool down period for this purpose but not for infrequent regeneration adjustment factors.
    (2)  If necessary while servicing the vehicle, provided the deactivation of the AES system is accomplished using a diagnostic scan tool.  The system must be automatically reactivated when the engine is shutdown for more than 60 minutes.
    (3)  If the vehicle's main battery state-of-charge is not sufficient to allow the main engine to be restarted. 
    (4) If the external ambient temperature reaches a level below which or above which the cabin temperature cannot be maintained within reasonable heat or cold exposure threshold limit values for the health and safety of the operator (not merely comfort).  
    (5) If the vehicle's engine coolant temperature is too low according to the manufacturer's engine protection guidance.  This may also apply for fuel or oil temperatures.  This allows the engine to continue operating until it reaches a predefined temperature at which the shutdown sequence of paragraph (a) of this section would resume.
    (6) The system may delay shutdown while the vehicle's main engine is operating in power take-off (PTO) mode.  For purposes of this paragraph (b)(6), an engine is considered to be in PTO mode when a switch or setting designating PTO mode is enabled.  
   (c) Adjustments to AES systems. (1)  The AES system may include an expiration point (in miles) after which the AES system may be disabled. If your vehicle is equipped with an AES system that expires before 1,259,000 miles, adjust the model input as follows, rounded to the nearest 0.1 g/ton-mile: AES Input = 5 g CO2/ton-mile x (miles at expiration/1,259,000 miles)
   (2) For AES systems designed to limit idling to a specific number of hours less than 1,800 hours over any 12-month period, calculate an adjusted AES input using the following equation, rounded to the nearest 0.1 g/ton-mile: AES Input = 5 g CO2/ton-mile x (1 - (maximum allowable number of idling hours per year/1,800 hours)). This is an annual allowance that starts when the vehicle is new and resets every 12 months after that.  Manufacturers may propose an alternative method based on operating hours or miles instead of years.  
(d) Adjustable parameters.  Provisions that apply generally with respect to adjustable parameters also apply to the AES system operating parameters, except the following are not considered to be adjustable parameters:
   (1) Accelerator, brake, and clutch pedals, with respect to resetting the idle timer.  Parameters associated with other timer reset mechanisms we approve are also not adjustable parameters.
   (2) Bypass parameters allowed for vehicle service under paragraph (b)(2) of this section.
   (3) Parameters that are adjustable only after the expiration point.
   
§1037.665 In-use tractor testing.
Manufacturers with U.S.-directed production volumes of greater than 20,000 tractors must perform in-use testing as described in this section.
(a) The following test requirements apply for calendar years 2020 through 2027:
   (1) Each year, select for testing three sleeper cabs and two day cabs certified to Phase 1 or Phase 2 standards.  If we do not identify certain vehicle configurations for your testing, select models that you project to be among your 12 highest-selling vehicle configurations for the given year.
   (2) Set up the tractors on a chassis dynamometer and operate them over all applicable duty cycles from §1037.510(a).  Use standard payload.  Measure emissions of NOx, PM, CO, NMHC, CO2, CH4, and N2O.  Determine emission levels in g/hour for the idle test and g/ton-mile for other duty cycles. 
(b) We may require that you continue testing in 2028 and later.
(c) Send us an annual report with your test results for each duty cycle and the corresponding GEM results.  We may make your test data publicly available.

Subpart H -- Averaging, Banking, and Trading for Certification
§ 1037.701  General provisions.
(a) You may average, bank, and trade (ABT) emission credits for purposes of certification as described in this subpart and in subpart B of this part to show compliance with the standards of §§1037.105 through 1037.107.  Participation in this program is voluntary.  The provisions of 40 CFR part 86, subpart S, apply instead of the provisions of this subpart for showing compliance with the evaporative and refueling emission standards specified in §1037.103.
(b) The definitions of Subpart I of this part apply to this subpart.  The following definitions also apply: 
   (1) Actual emission credits means emission credits you have generated that we have verified by reviewing your final report.
   (2) Averaging set means a set of vehicles in which emission credits may be exchanged.  Credits generated by one vehicle may only be used by other vehicles in the same averaging set.  Note that an averaging set may comprise more than one regulatory subcategory.  See §1037.740.
   (3) Broker means any entity that facilitates a trade of emission credits between a buyer and seller.
   (4) Buyer means the entity that receives emission credits as a result of a trade.
   (5) Reserved emission credits means emission credits you have generated that we have not yet verified by reviewing your final report.
   (6) Seller means `the entity that provides emission credits during a trade.
   (7) Standard means the emission standard that applies under subpart B of this part for vehicles not participating in the ABT program of this subpart. 
   (8) Trade means to exchange emission credits, either as a buyer or seller.
(c) Emission credits may be exchanged only within an averaging set as specified in §1037.740.
(d) You may not use emission credits generated under this subpart to offset any emissions that exceed an FEL or standard, except as allowed by §1037.645.  
(e) You may use either of the following approaches to retire or forego emission credits:
   (1) You may trade emission credits generated from any number of your vehicles to the vehicle purchasers or other parties to retire the credits.  Identify any such credits in the reports described in §1037.730.  Vehicles must comply with the applicable FELs even if you donate or sell the corresponding emission credits under this paragraph (e).  Those credits may no longer be used by anyone to demonstrate compliance with any EPA emission standards.
   (2) You may certify a family using an FEL below the emission standard as described in this part and choose not to generate emission credits for that family.  If you do this, you do not need to calculate emission credits for those families and you do not need to submit or keep the associated records described in this subpart for that family.
(f) Emission credits may be used in the model year they are generated.  Surplus emission credits may be banked for future model years.  Surplus emission credits may sometimes be used for past model years, as described in §1037.745.  
(g) You may increase or decrease an FEL during the model year by amending your application for certification under §1037.225.  The new FEL may apply only to vehicles you have not already introduced into commerce.  
(h) See §1037.740 for special credit provisions that apply for credits generated under §1037.104(d)(7), §1037.615 or 40 CFR 1036.615.
(i) Unless the regulations explicitly allow it, you may not calculate credits more than once for any emission reduction.  For example, if you generate CO2 emission credits for a given hybrid vehicle under this part, no one may generate CO2 emission credits for the hybrid engine under 40 CFR part 1036.  However, credits could be generated for identical engine used in vehicles that did not generate credits under this part.
(j) You may use emission credits generated under the Phase 1 standards when certifying vehicles to Phase 2 standards.  No credit adjustments are required.

§ 1037.705  Generating and calculating emission credits.
(a) The provisions of this section apply separately for calculating emission credits for each pollutant.
(b) For each participating family or subfamily, calculate positive or negative emission credits relative to the otherwise applicable emission standard.  Calculate positive emission credits for a family or subfamily that has an FEL below the standard.  Calculate negative emission credits for a family or subfamily that has an FEL above the standard.  Sum your positive and negative credits for the model year before rounding.  Round the sum of emission credits to the nearest megagram (Mg), using consistent units with the following equation:
      Emission credits (Mg) = (Std - FEL) ∙ (PL) ∙ (Volume) ∙ (UL) ∙ (10[-6])
      Where:
      Std = the emission standard associated with the specific regulatory subcategory (g/ton-mile).
      FEL = the family emission limit for the vehicle subfamily (g/ton-mile).
      PL = standard payload, in tons.
      Volume = U.S.-directed production volume of the vehicle subfamily.  For example, if you produce three configurations with the same FEL, the subfamily production volume would be the sum of the production volumes for these three configurations.
      UL = useful life of the vehicle, in miles, as described in §1037.105 and §1037.106.  Use 250,000 miles for trailers. 
(c) As described in §1037.730, compliance with the requirements of this subpart is determined at the end of the model year based on actual U.S.-directed production volumes.  Keep appropriate records to document these production volumes.  Do not include any of the following vehicles to calculate emission credits:
   (1) Vehicles that you do not certify to the CO2 standards of this part because they are permanently exempted under subpart G of this part or under 40 CFR part 1068.
   (2) Exported vehicles.
   (3) Vehicles not subject to the requirements of this part, such as those excluded under §1037.5.
   (4) Any other vehicles, where we indicate elsewhere in this part 1037 that they are not to be included in the calculations of this subpart. 
   
§ 1037.710  Averaging.
(a) Averaging is the exchange of emission credits among your vehicle families.  You may average emission credits only within the same averaging set.
(b) You may certify one or more vehicle families (or subfamilies) to an FEL above the applicable standard, subject to any applicable FEL caps and other provisions in subpart B of this part, if you show in your application for certification that your projected balance of all emission-credit transactions in that model year is greater than or equal to zero or that a negative balance is allowed under §1037.745. 
(c) If you certify a vehicle family to an FEL that exceeds the otherwise applicable standard, you must obtain enough emission credits to offset the vehicle family's deficit by the due date for the final report required in §1037.730.  The emission credits used to address the deficit may come from your other vehicle families that generate emission credits in the same model year (or from later model years as specified in §1037.745), from emission credits you have banked from previous model years, or from emission credits generated in the same or previous model years that you obtained through trading.  Note that the option for using banked or traded credits does not apply for trailers. 

§ 1037.715  Banking.
(a) Banking is the retention of surplus emission credits by the manufacturer generating the emission credits for use in future model years for averaging or trading.  Note that §1037.107 does not allow banking for trailers.
(b) You may designate any emission credits you plan to bank in the reports you submit under §1037.730 as reserved credits.  During the model year and before the due date for the final report, you may designate your reserved emission credits for averaging or trading.
(c) Reserved credits become actual emission credits when you submit your final report.  However, we may revoke these emission credits if we are unable to verify them after reviewing your reports or auditing your records.
(d) Banked credits retain the designation of the averaging set in which they were generated.

§ 1037.720  Trading.
(a) Trading is the exchange of emission credits between manufacturers, or the transfer of credits to another party to retire them.  You may use traded emission credits for averaging, banking, or further trading transactions.  Traded emission credits remain subject to the averaging-set restrictions based on the averaging set in which they were generated.  Note that §1037.107 does not allow trading for trailers.
(b) You may trade actual emission credits as described in this subpart.  You may also trade reserved emission credits, but we may revoke these emission credits based on our review of your records or reports or those of the company with which you traded emission credits.  You may trade banked credits within an averaging set to any certifying manufacturer.
(c) If a negative emission credit balance results from a transaction, both the buyer and seller are liable, except in cases we deem to involve fraud.  See §1037.255(e) for cases involving fraud.  We may void the certificates of all vehicle families participating in a trade that results in a manufacturer having a negative balance of emission credits.  See §1037.745.

§ 1037.725  What must I include in my application for certification?
(a) You must declare in your application for certification your intent to use the provisions of this subpart for each vehicle family that will be certified using the ABT program.  You must also declare the FELs you select for the vehicle family or subfamily for each pollutant for which you are using the ABT program.  Your FELs must comply with the specifications of subpart B of this part, including the FEL caps.  FELs must be expressed to the same number of decimal places as the applicable standards.
(b) Include the following in your application for certification:
   (1) A statement that, to the best of your belief, you will not have a negative balance of emission credits for any averaging set when all emission credits are calculated at the end of the year; or a statement that you will have a negative balance of emission credits for one or more averaging sets but that it is allowed under §1037.745.
   (2) Calculations of projected emission credits (positive or negative) based on projected U.S.-directed production volumes.  We may require you to include similar calculations from your other vehicle families to project your net credit balances for the model year.  If you project negative emission credits for a family or subfamily, state the source of positive emission credits you expect to use to offset the negative emission credits.
   
§ 1037.730  ABT reports.
(a) If any of your vehicle families are certified using the ABT provisions of this subpart, you must send a final report within 90 days after the end of the model year.  You may ask us to extend the deadline for the final report by up to 30 days.
(b) Your final report must include the following information for each vehicle family participating in the ABT program:
   (1) Vehicle-family and subfamily designations, and averaging set.
   (2) The regulatory subcategory and emission standards that would otherwise apply to the vehicle family.
   (3) The FEL for each pollutant.  If you change the FEL after the start of production, identify the date that you started using the new FEL and/or give the vehicle identification number for the first vehicle covered by the new FEL.  In this case, identify each applicable FEL and calculate the positive or negative emission credits as specified in §1037.225.
   (4) The projected and actual U.S.-directed production volumes for the model year. If you changed an FEL during the model year, identify the actual U.S.-directed production volume associated with each FEL.
   (5) Useful life.
   (6) Calculated positive or negative emission credits for the whole vehicle family.  Identify any emission credits that you traded, as described in paragraph (d)(1) of this section.
   (7) If you have a negative credit balance for the averaging set in the given model year, specify whether the vehicle family (or certain subfamilies with the vehicle family) have a credit deficit for the year.  Consider for example, a manufacturer with three vehicle families ("A", "B", and "C") in a given averaging set.  If family A generates enough credits to offset the negative credits of family B but not enough to also offset the negative credits of family C (and the manufacturer has no banked credits in the averaging set), the manufacturer may designate families A and B as having no deficit for the model year, provided it designates family C as having a deficit for the model year.
(c) Your final report must include the following additional information:
   (1) Show that your net balance of emission credits from all your participating vehicle families in each averaging set in the applicable model year is not negative, except as allowed under §1037.745.  Your credit tracking must account for the limitation on credit life under §1037.40(c).
   (2) State whether you will retain any emission credits for banking. If you choose to retire emission credits that would otherwise be eligible for banking, identify the families that generated the emission credits, including the number of emission credits from each family.
   (3) State that the report's contents are accurate.
   (4) Identify the technologies that make up the certified configuration associated with each vehicle identification number.  You may identify this as a range of values for vehicles involving a single, identical certified configuration. 
(d) If you trade emission credits, you must send us a report within 90 days after the transaction, as follows:
	(1) As the seller, you must include the following information in your report:
      (i) The corporate names of the buyer and any brokers.
      (ii) A copy of any contracts related to the trade.
      (iii) The vehicle families that generated emission credits for the trade, including the number of emission credits from each family.
   (2) As the buyer, you must include the following information in your report:
      (i) The corporate names of the seller and any brokers.
      (ii) A copy of any contracts related to the trade.
      (iii) How you intend to use the emission credits, including the number of emission credits you intend to apply to each vehicle family (if known).
(e) Send your reports electronically to the Designated Compliance Officer using an approved information format.  If you want to use a different format, send us a written request with justification for a waiver.
(f) Correct errors in your final report as follows:
   (1) If you or we determine before the due date for the final report that errors mistakenly decreased your balance of emission credits, you may correct the errors and recalculate the balance of emission credits.  You may not make these corrections for errors that are determined after the due date for the final report.  If you report a negative balance of emission credits, we may disallow corrections under this paragraph (f)(1).
   (2) If you or we determine anytime that errors mistakenly increased your balance of emission credits, you must correct the errors and recalculate the balance of emission credits.
   
§ 1037.735  Recordkeeping.
(a) You must organize and maintain your records as described in this section.  
(b) Keep the records required by this section for at least eight years after the due date for the final report.  You may not use emission credits for any vehicles if you do not keep all the records required under this section.  You must therefore keep these records to continue to bank valid credits.  
(c) Keep a copy of the reports we require in §§1037.725 and 1037.730.
(d) Keep records of the vehicle identification number for each vehicle you produce.  You may identify these numbers as a range.  If you change the FEL after the start of production, identify the date you started using each FEL and the range of vehicle identification numbers associated with each FEL.  You must also identify the purchaser and destination for each vehicle you produce to the extent this information is available.
(e) We may require you to keep additional records or to send us relevant information not required by this section in accordance with the Clean Air Act.

§ 1037.740  Restrictions for using emission credits.
The following restrictions apply for using emission credits:
(a) Averaging sets. Except as specified in paragraph (b) of this section, emission credits may be exchanged only within an averaging set.  The following principal averaging sets apply for vehicles subject to this subpart:  
   (1) Class 2b through 5 vehicles that are subject to the standards of §1037.105. 
   (2) Class 6 and 7 vehicles.
   (3) Class 8 vehicles.(4) Long box vans.
   (5) Short box vans.
   (6) Long refrigerated vans.
   (7) Short refrigerated vans.
   (8) Note that other separate averaging sets also apply for emission credits not related to this part.  For example, vehicles certified to the greenhouse gas standards of 40 CFR 86.1819 comprise a single averaging set.  Separate averaging sets also apply for engines under 40 CFR part 1036, including engines used in vehicles subject to this subpart. 
(b) Credits from hybrid vehicles and other advanced technologies.  Credits you generate under §1037.615 in Phase 1 may be used for any of the averaging sets identified in paragraph (a) of this section; you may also use those credits to demonstrate compliance with the CO2 emission standards in 40 CFR 86.1819 and 40 CFR part 1036.  Similarly, you may use advanced-technology credits generated under 40 CFR 86.1819-14(d)(7) or 40 CFR 1036.615 to demonstrate compliance with the CO2 standards in this part.  
   (1) The maximum amount of credits you may bring into the following service class groups is 60,000 Mg per model year: 
      (i) Spark-ignition engines, light heavy-duty compression-ignition engines, and light heavy-duty vehicles.  This group comprises the averaging set listed in paragraphs (a)(1) of this section and the averaging set listed in 40 CFR 1036.740(a)(1) and (2).
      (ii) Medium heavy-duty compression-ignition engines and medium heavy-duty vehicles. This group comprises the averaging sets listed in paragraph (a)(2) of this section and 40 CFR 1036.740(a)(3).
      (iii) Heavy heavy-duty compression-ignition engines and heavy heavy-duty vehicles. This group comprises the averaging sets listed in paragraph (a)(3) of this section and 40 CFR 1036.740(a)(4).
   (2) Paragraph (b)(1) of this section does not limit the advanced technology credits that can be used within a service class group if they were generated in that same service class group.
(c) Credit life.  Credits may be used only for five model years after the year in which they are generated.  For example, credits you generate in model year 2018 may be used to demonstrate compliance with emission standards only through model year 2023.
(d) Other restrictions.  Other sections of this part specify additional restrictions for using emission credits under certain special provisions.

§ 1037.745  End-of-year CO2 credit deficits.
Except as allowed by this section, we may void the certificate of any vehicle family certified to an FEL above the applicable standard for which you do not have sufficient credits by the deadline for submitting the final report.  
(a)  Your certificate for a vehicle family for which you do not have sufficient CO2 credits will not be void if you remedy the deficit with surplus credits within three model years.  For example, if you have a credit deficit of 500 Mg for a vehicle family at the end of model year 2015, you must generate (or otherwise obtain) a surplus of at least 500 Mg in that same averaging set by the end of model year 2018.
(b) You may not bank or trade away CO2 credits in the averaging set in any model year in which you have a deficit.
(c) You may apply only surplus credits to your deficit.  You may not apply credits to a deficit from an earlier model year if they were generated in a model year for which any of your vehicle families for that averaging set had an end-of-year credit deficit.
(d) If you do not remedy the deficit with surplus credits within three model years, we may void your certificate for that vehicle family.  Note that voiding a certificate applies ab initio.  Where the net deficit is less than the total amount of negative credits originally generated by the family, we will void the certificate only with respect to the number of vehicles needed to reach the amount of the net deficit.  For example, if the original vehicle family generated 500 Mg of negative credits, and the manufacturer's net deficit after three years was 250 Mg, we would void the certificate with respect to half of the vehicles in the family.
(e) For purposes of calculating the statute of limitations, the following actions are all considered to occur at the expiration of the deadline for offsetting a deficit as specified in paragraph (a) of this section:
   (1) Failing to meet the requirements of paragraph (a) of this section.
   (2) Failing to satisfy the conditions upon which a certificate was issued relative to offsetting a deficit.
   (3) Selling, offering for sale, introducing or delivering into U.S. commerce, or importing vehicles that are found not to be covered by a certificate as a result of failing to offset a deficit.

§ 1037.750  What can happen if I do not comply with the provisions of this subpart?
(a) For each vehicle family participating in the ABT program, the certificate of conformity is conditioned upon full compliance with the provisions of this subpart during and after the model year.  You are responsible to establish to our satisfaction that you fully comply with applicable requirements.  We may void the certificate of conformity for a vehicle family if you fail to comply with any provisions of this subpart.
(b) You may certify your vehicle family or subfamily to an FEL above an applicable standard based on a projection that you will have enough emission credits to offset the deficit for the vehicle family.  See §1037.745 for provisions specifying what happens if you cannot show in your final report that you have enough actual emission credits to offset a deficit for any pollutant in a vehicle family.
(c) We may void the certificate of conformity for a vehicle family if you fail to keep records, send reports, or give us information we request.  Note that failing to keep records, send reports, or give us information we request is also a violation of 42 U.S.C. 7522(a)(2).
(d) You may ask for a hearing if we void your certificate under this section (see §1037.820).

§ 1037.755  Information provided to the Department of Transportation.
After receipt of each manufacturer's final report as specified in §1037.730 and completion of any verification testing required to validate the manufacturer's submitted final data, we will issue a report to the Department of Transportation with CO2 emission information and will verify the accuracy of each manufacturer's equivalent fuel consumption data required by NHTSA under 49 CFR 535.8.  We will send a report to DOT for each vehicle manufacturer based on each regulatory category and subcategory, including sufficient information for NHTSA to determine fuel consumption and associated credit values.  See 49 CFR 535.8 to determine if NHTSA deems submission of this information to EPA to also be a submission to NHTSA. 

Subpart I -- Definitions and Other Reference Information
§ 1037.801  Definitions. 
The following definitions apply to this part.  The definitions apply to all subparts unless we note otherwise.  All undefined terms have the meaning the Act gives to them.  The definitions follow:
	A to B testing means testing performed in pairs to allow comparison of two vehicles or other test articles.  Back-to-back tests are performed on Article A and Article B, changing only the variable(s) of interest for the two tests.  
	Act means the Clean Air Act, as amended, 42 U.S.C. 7401 - 7671q.
	Adjustable parameter means any device, system, or element of design that someone can adjust (including those which are difficult to access) and that, if adjusted, may affect measured or modeled emissions (as applicable).  You may ask us to exclude a parameter that is difficult to access if it cannot be adjusted to affect emissions without significantly degrading vehicle performance, or if you otherwise show us that it will not be adjusted in a way that affects emissions during in-use operation.
	Adjusted Loaded Vehicle Weight means the numerical average of vehicle curb weight and GVWR. 
	Advanced technology means vehicle technology certified under 40 CFR 86.1819-14(d)(7), 40 CFR 1036.615, or §1037.615.
	Aftertreatment means relating to a catalytic converter, particulate filter, or any other system, component, or technology mounted downstream of the exhaust valve (or exhaust port) whose design function is to decrease emissions in the vehicle exhaust before it is exhausted to the environment.  Exhaust-gas recirculation (EGR) and turbochargers are not aftertreatment.
Aircraft means any vehicle capable of sustained air travel more than 100 feet off the ground.
	Alcohol-fueled vehicle means a vehicle that is designed to run using an alcohol fuel.  For purposes of this definition, alcohol fuels do not include fuels with a nominal alcohol content below 25 percent by volume.
Alternative fuel conversion has the meaning given for clean alternative fuel conversion in 40 CFR 85.502.
Ambulance has the meaning given in 40 CFR 86.1803.
Amphibious vehicle means a motor vehicle that is also designed for operation on water.
Automatic tire inflation system means a system installed on a vehicle to keep each load-bearing tire inflated to within 10 percent of the target value with no operator input.
	Auxiliary emission control device means any element of design that senses temperature, motive speed, engine rpm, transmission gear, or any other parameter for the purpose of activating, modulating, delaying, or deactivating the operation of any part of the emission control system.
	Averaging set has the meaning given in §1037.701. 
Basic vehicle frontal area means the area enclosed by the geometric projection of the basic vehicle along the longitudinal axis onto a plane perpendicular to the longitudinal axis of the vehicle, including tires but excluding mirrors and air deflectors.
	Calibration means the set of specifications and tolerances specific to a particular design, version, or application of a component or assembly capable of functionally describing its operation over its working range.
	Carbon-related exhaust emissions (CREE) has the meaning given in 40 CFR 600.002.  Note that CREE represents the combined mass of carbon emitted as HC, CO, and CO2, expressed as having a molecular weight equal to that of CO2.  
	Carryover means relating to certification based on emission data generated from an earlier model year.
	Certification means relating to the process of obtaining a certificate of conformity for a vehicle family that complies with the emission standards and requirements in this part.  
	Certified emission level means the highest deteriorated emission level in a vehicle subfamily for a given pollutant from either transient or steady-state testing.  
	Class means relating to GVWR classes, as follows:
(1) Class 2b means heavy-duty motor vehicles at or below 10,000 pounds GVWR. 
(2) Class 3 means heavy-duty motor vehicles above 10,000 pounds GVWR but at or below 14,000 pounds GVWR. 
(3) Class 4 means heavy-duty motor vehicles above 14,000 pounds GVWR but at or below 16,000 pounds GVWR.
(4) Class 5 means heavy-duty motor vehicles above 16,000 pounds GVWR but at or below 19,500 pounds GVWR.
(5) Class 6 means heavy-duty motor vehicles above 19,500 pounds GVWR but at or below 26,000 pounds GVWR.
(6) Class 7 means heavy-duty motor vehicles above 26,000 pounds GVWR but at or below 33,000 pounds GVWR.
(7) Class 8 means heavy-duty motor vehicles above 33,000 pounds GVWR.
   Complete vehicle has the meaning given in the definition of vehicle in this section.
	Compression-ignition has the meaning given in §1037.101
	Date of manufacture means the date on which the certifying vehicle manufacturer completes its manufacturing operations, except as follows:
(1) Where the certificate holder is an engine manufacturer that does not manufacture the chassis, the date of manufacture of the vehicle is based on the date assembly of the vehicle is completed.
(2) We may approve an alternate date of manufacture based on the date on which the certifying (or primary) manufacturer completes assembly at the place of main assembly, consistent with the provisions of §1037.601 and 49 CFR 567.4.
	Day cab means a type of tractor cab that is not a sleeper cab or a heavy-haul tractor cab.
	Designated Compliance Officer means one of the following:
(1) For compression-ignition engines, Designated Compliance Officer means Director, Diesel Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov.
(2) For spark-ignition engines, Designated Compliance Officer means Director, Gasoline Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; nonroad-si-cert@epa.gov.
	Deteriorated emission level means the emission level that results from applying the appropriate deterioration factor to the official emission result of the emission-data vehicle.  Note that where no deterioration factor applies, references in this part to the deteriorated emission level mean the official emission result.
	Deterioration factor means the relationship between the highest emissions during the useful life and emissions at the low-hour test point, expressed in one of the following ways:
(1) For multiplicative deterioration factors, the ratio of the highest emissions to emissions at the low-hour test point.
(2) For additive deterioration factors, the difference between the highest emissions and emissions at the low-hour test point.
	Driver model means an automated controller that simulates a person driving a vehicle.
Dual-fuel means relating to a vehicle or engine designed for operation on two different fuels but not on a continuous mixture of those fuels.  For purposes of this part, such a vehicle or engine remains a dual-fuel vehicle or engine even if it is designed for operation on three or more different fuels.
	Electric vehicle means a vehicle that does not include an engine, and is powered solely by an external source of electricity and/or solar power.  Note that this does not include electric hybrid or fuel-cell vehicles that use a chemical fuel such as gasoline, diesel fuel, or hydrogen.  Electric vehicles may also be referred to as all-electric vehicles to distinguish them from hybrid vehicles.  
Emergency vehicle means a vehicle that is an ambulance or a fire truck.
	Emission control system means any device, system, or element of design that controls or reduces the emissions of regulated pollutants from a vehicle.
	Emission-data vehicle means a vehicle that is tested for certification.  This includes vehicle tested to establish deterioration factors.
	Emission-related maintenance means maintenance that substantially affects emissions or is likely to substantially affect emission deterioration.
	Excluded means relating to vehicles that are not subject to some or all of the requirements of this part as follows:
(1) A vehicle that has been determined not to be a "motor vehicle" is excluded from this part.
(2) Certain vehicles are excluded from the requirements of this part under §1037.5.
(3) Specific regulatory provisions of this part may exclude a vehicle generally subject to this part from one or more specific standards or requirements of this part.
	Exempted has the meaning given in 40 CFR 1068.30.
	Family emission limit (FEL) means an emission level declared by the manufacturer to serve in place of an otherwise applicable emission standard under the ABT program in subpart H of this part.  The family emission limit must be expressed to the same number of decimal places as the emission standard it replaces.  Note that an FEL may apply as a "subfamily" emission limit. 
Final drive ratio means the dimensionless number representing the angular speed of the transmission output shaft divided by the angular speed of the drive axle.
Fire truck has the meaning given in 40 CFR 86.1803.
Flexible-fuel means relating to an engine designed for operation on any mixture of two or more different fuels. 
	Fuel system means all components involved in transporting, metering, and mixing the fuel from the fuel tank to the combustion chamber(s), including the fuel tank, fuel pump, fuel filters, fuel lines, carburetor or fuel-injection components, and all fuel-system vents.  It also includes components for controlling evaporative emissions, such as fuel caps, purge valves, and carbon canisters.
	Fuel type means a general category of fuels such as diesel fuel or natural gas.  There can be multiple grades within a single fuel type, such as high-sulfur or low-sulfur diesel fuel.
Gaseous fuel means a fuel that has a boiling point below 20 °C.
Gear ratio means the angular velocity of the input gear divided by the angular velocity of the output gear.
Glider kit means any of the following:
(1) A new vehicle that is incomplete because it lacks an engine, transmission, or axle.
(2) A new vehicle produced with a used engine (including a rebuilt or remanufactured engine).
(3) Any other new equipment that is intended to become a motor vehicle with a previously used engine (including a rebuilt or remanufactured engine).
Glider vehicle means a new vehicle produced with a used engine.	
Good engineering judgment has the meaning given in 40 CFR 1068.30.  See 40 CFR 1068.5 for the administrative process we use to evaluate good engineering judgment.
Gross axle weight rating (GAWR) means  the value specified by the vehicle manufacturer as the maximum weight of a loaded axle or set of axles, consistent with good engineering judgment.  
	Gross combination weight rating (GCWR) means the value specified by the vehicle manufacturer as the maximum weight of a loaded vehicle and trailer, consistent with good engineering judgment.  For example, compliance with SAE J2807 is generally considered to be consistent with good engineering judgment, especially for Class 3 and smaller vehicles.
	Gross vehicle weight rating (GVWR) means the value specified by the vehicle manufacturer as the maximum design loaded weight of a single vehicle, consistent with good engineering judgment.  
	Heavy-duty engine means any engine used for (or for which the engine manufacturer could reasonably expect to be used for) motive power in a heavy-duty vehicle.
	Heavy-duty vehicle means any motor vehicle that has a GVWR above 8,500 pounds, a curb weight above 6,000 pounds, or a basic vehicle frontal area greater than 45 square feet.
Heavy-haul tractor means a tractor with GCWR above 120,000 pounds, a total gear reduction greater than or equal to 57:1, and a frame Resisting Bending Moment at or above 2,000,000 in-lbs per rail, or per rail and liner combination.  Total gear reduction is the transmission gear ratio in the lowest gear multiplied by the drive axle ratio.  A heavy-haul tractor is not a vocational tractor.
	Hybrid engine or hybrid powertrain means an engine or powertrain that includes energy storage features other than a conventional battery system or conventional flywheel.  Supplemental electrical batteries and hydraulic accumulators are examples of hybrid energy storage systems.  Note that certain provisions in this part treat hybrid engines and powertrains intended for vehicles that include regenerative braking different than those intended for vehicles that do not include regenerative braking.
	Hybrid vehicle means a vehicle that includes energy storage features (other than a conventional battery system or conventional flywheel) in addition to an internal combustion engine or other engine using consumable chemical fuel.  Supplemental electrical batteries and hydraulic accumulators are examples of hybrid energy storage systems  Note that certain provisions in this part treat hybrid vehicles that include regenerative braking different than those that do not include regenerative braking.
	Hydrocarbon (HC) means the hydrocarbon group on which the emission standards are based for each fuel type.  For alcohol-fueled vehicles, HC means nonmethane hydrocarbon equivalent (NMHCE) for exhaust emissions and total hydrocarbon equivalent (THCE) for evaporative emissions.  For all other vehicles, HC means nonmethane hydrocarbon (NMHC) for exhaust emissions and total hydrocarbon (THC) for evaporative emissions.
	Identification number means a unique specification (for example, a model number/serial number combination) that allows someone to distinguish a particular vehicle from other similar vehicles. 
	Incomplete vehicle has the meaning given in the definition of vehicle in this section.
	Innovative technology means technology certified under §1037.610.
	Light-duty truck means any motor vehicle rated at or below 8,500 pounds GVWR with a curb weight at or below 6,000 pounds and basic vehicle frontal area at or below 45 square feet, 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.
	Light-duty vehicle means a passenger car or passenger car derivative capable of seating 12 or fewer passengers.
	Low-mileage means relating to a vehicle with stabilized emissions and represents the undeteriorated emission level.  This would generally involve approximately 4000 miles of operation.
	Low rolling resistance tire means a tire on a vocational vehicle with a TRRL at or below of 7.7 kg/metric ton, a steer tire on a tractor with a TRRL at or below 7.7 kg/metric ton, or a drive tire on a tractor with a TRRL at or below 8.1 kg/metric ton.
	Manufacture means the physical and engineering process of designing, constructing, and/or assembling a vehicle. 
	Manufacturer has the meaning given in section 216(1) of the Act.  In general, this term includes any person who manufactures or assembles a vehicle for sale in the United States or otherwise introduces a new motor vehicle into commerce in the United States.  This includes importers who import vehicles or vehicles for resale and entities that assemble glider kits.  
	Medium-duty passenger vehicle (MDPV) has the meaning given in 40 CFR 86.1803.
	Model year means the manufacturer's annual new model production period, except as restricted under this definition and 40 CFR part 85, subpart X.  It must include January 1 of the calendar year for which the model year is named, may not begin before January 2 of the previous calendar year, and it must end by December 31 of the named calendar year. 
(1) The manufacturer who holds the certificate of conformity for the vehicle must assign the model year based on the date when its manufacturing operations are completed relative to its annual model year period.  In unusual circumstances where completion of your assembly is delayed, we may allow you to assign a model year one year earlier, provided it does not affect which regulatory requirements will apply.
 (2) Unless a vehicle is being shipped to a secondary manufacturer that will hold the certificate of conformity, the model year must be assigned prior to introduction of the vehicle into U.S. commerce.  The certifying manufacturer must redesignate the model year if it does not complete its manufacturing operations within the originally identified model year.  A vehicle introduced into U.S. commerce without a model year is deemed to have a model year equal to the calendar year of its introduction into U.S. commerce unless the certifying manufacturer assigns a later date.
	Motor vehicle has the meaning given in 40 CFR 85.1703. 
	New motor vehicle has the meaning given in the Act.  It generally means a motor vehicle meeting the criteria of either paragraph (1) or (2) of this definition.  New motor vehicles may be complete or incomplete.
(1) A motor vehicle for which the ultimate purchaser has never received the equitable or legal title is a new motor vehicle.  This kind of vehicle might commonly be thought of as "brand new" although a new motor vehicle may include previously used parts.  For example, vehicles commonly known as "glider kits" or "gliders" are "new motor vehicles".  Under this definition, the vehicle is new from the time it is produced until the ultimate purchaser receives the title or places it into service, whichever comes first.
   (2) An imported heavy-duty motor vehicle originally produced after the 1969 model year is a new motor vehicle.
	Noncompliant vehicle means a vehicle that was originally covered by a certificate of conformity, but is not in the certified configuration or otherwise does not comply with the conditions of the certificate.
	Nonconforming vehicle means a vehicle not covered by a certificate of conformity that would otherwise be subject to emission standards.
	Nonmethane hydrocarbons (NMHC) means the sum of all hydrocarbon species except methane, as measured according to 40 CFR part 1065.
	Off-cycle technology means technology certified under §1037.610.
	Official emission result means the measured emission rate for an emission-data vehicle on a given duty cycle before the application of any required deterioration factor, but after the applicability of regeneration adjustment factors.
	Owners manual means a document or collection of documents prepared by the vehicle manufacturer for the owners or operators to describe appropriate vehicle maintenance, applicable warranties, and any other information related to operating or keeping the vehicle.  The owners manual is typically provided to the ultimate purchaser at the time of sale.
	Oxides of nitrogen has the meaning given in 40 CFR 1065.1001.
	Particulate trap means a filtering device that is designed to physically trap all particulate matter above a certain size. 
	Percent has the meaning given in 40 CFR 1065.1001.  Note that this means percentages identified in this part are assumed to be infinitely precise without regard to the number of significant figures.  For example, one percent of 1,493 is 14.93.
	Placed into service means put into initial use for its intended purpose, excluding incidental use by the manufacturer or a dealer.
	Power take-off (PTO) means a secondary engine shaft (or equivalent) that provides substantial auxiliary power for purposes unrelated to vehicle propulsion or normal vehicle accessories such as air conditioning, power steering, and basic electrical accessories.  A typical PTO uses a secondary shaft on the engine to transmit power to a hydraulic pump that powers auxiliary equipment, such as a boom on a bucket truck.  You may ask us to consider other equivalent auxiliary power configurations (such as those with hybrid vehicles) as power take-off systems.
	Preliminary approval means approval granted by an authorized EPA representative prior to submission of an application for certification, consistent with the provisions of § 1037.210.
	Rechargeable Energy Storage System (RESS) means the component(s) of a hybrid engine or vehicle that store recovered energy for later use, such as the battery system in an electric hybrid vehicle. 
	Regulatory subcategory has the meaning given in §1037.230. 
	Relating to as used in this section means relating to something in a specific, direct manner. This expression is used in this section only to define terms as adjectives and not to broaden the meaning of the terms.
	Revoke has the meaning given in 40 CFR 1068.30.
	Roof height means the maximum height of a vehicle (rounded to the nearest inch), excluding narrow accessories such as exhaust pipes and antennas, but including any wide accessories such as roof fairings.  Measure roof height of the vehicle configured to have its maximum height that will occur during actual use, with properly inflated tires and no driver, passengers, or cargo onboard.  Roof height may also refer to the following categories:
(1) Low-roof means relating to a vehicle with a roof height of 120 inches or less.
(2) Mid-roof means relating to a vehicle with a roof height of 121 to 147 inches.  
(3) High-roof means relating to a vehicle with a roof height of 148 inches or more. 
	Round has the meaning given in 40 CFR 1065.1001.
	Scheduled maintenance means adjusting, repairing, removing, disassembling, cleaning, or replacing components or systems periodically to keep a part or system from failing, malfunctioning, or wearing prematurely.  It also may mean actions you expect are necessary to correct an overt indication of failure or malfunction for which periodic maintenance is not appropriate.
	Sleeper cab means a type of tractor cab that has a compartment behind the driver's seat intended to be used by the driver for sleeping.  This includes cabs accessible from the driver's compartment and those accessible from outside the vehicle.
	Small manufacturer means a manufacturer meeting the criteria specified in 13 CFR 121.201.  For manufacturers owned by a parent company, the employee and revenue limits apply to the total number employees and total revenue of the parent company and all its subsidiaries.	
Spark-ignition has the meaning given in §1037.101. 
	Standard payload means the payload assumed for each vehicle, in tons, for modeling and calculating emission credits, as follows:
(1) For vocational vehicles:
   (i) 2.85 tons for light heavy-duty vehicles.
   (ii) 5.6 tons for medium heavy-duty vehicles.
   (iii) 7.5 tons for heavy heavy-duty vocational vehicles. 
(2) For tractors:
   (i) 12.5 tons for Class 7.
   (ii) 19 tons for Class 8, other than heavy-haul tractors.
   (iii) 43 tons for heavy-haul tractors.
(3) For trailers:
   (i) 10 tons for short box vans.
   (ii) 19 tons for other trailers.
Standard tractor has the meaning given in §1037.501.
	Standard trailer has the meaning given in §1037.501.
	Suspend has the meaning given in 40 CFR 1068.30.
	Test sample means the collection of vehicles or components selected from the population of a vehicle family for emission testing.  This may include testing for certification, production-line testing, or in-use testing.
	Test vehicle means a vehicle in a test sample.
	Test weight means the vehicle weight used or represented during testing. 
	Tire rolling resistance level (TRRL) means a value with units of kg/metric ton that represents that rolling resistance of a tire configuration.  TRRLs are used as inputs to the GEM model under §1037.520.  Note that a manufacturer may assign a value higher than the measured rolling resistance of a tire configuration. 
	Total hydrocarbon has the meaning given in 40 CFR 1065.1001.  This generally means the combined mass of organic compounds measured by the specified procedure for measuring total hydrocarbon, expressed as a hydrocarbon with an atomic hydrogen-to-carbon ratio of 1.85:1.
	Total hydrocarbon equivalent has the meaning given in 40 CFR 1065.1001.  This generally means the sum of the carbon mass contributions of non-oxygenated hydrocarbons, alcohols and aldehydes, or other organic compounds that are measured separately as contained in a gas sample, expressed as exhaust hydrocarbon from petroleum-fueled vehicles.  The atomic hydrogen-to-carbon ratio of the equivalent hydrocarbon is 1.85:1.
	Tractor has the meaning given for "truck tractor" in 49 CFR 571.3.  This includes most heavy-duty vehicles specifically designed for the primary purpose of pulling trailers, but does not include vehicles designed to carry other loads.  For purposes of this definition "other loads" would not include loads carried in the cab, sleeper compartment, or toolboxes.  Examples of vehicles that are similar to tractors but that are not tractors under this part include dromedary tractors, automobile haulers, straight trucks with trailers hitches, and tow trucks.  Note that the provisions of this part that apply for tractors do not apply for tractors that are classified as vocational tractors under §1037.630. 
Trailer means a piece of equipment designed for carrying cargo and for being drawn by a tractor.  Trailers may be divided into different types and categories as described in paragraphs (1) through (4).  The types of equipment identified in paragraph (5) are not trailers.
(1) Box vans are trailers with an enclosed cargo space that is permanently attached to the chassis, with fixed sides, nose, and roof and is designed to carry a wide range of freight.  Tankers are not box vans. 
(2) Box vans with self-contained refrigeration systems are refrigerated vans.  All other box vans are dry vans.
(3) Trailers that are not box vans are non-box trailers.  This includes chassis that are designed only for temporarily mounted containers.
(4) Box trailers with length greater than 50 feet are long box trailers.  Other box trailers are short box trailers. 
(5) The following types of equipment are not trailers:
   (i) Containers that are not permanently mounted on chassis. 
   (ii) [Reserved]
	Ultimate purchaser means, with respect to any new vehicle, the first person who in good faith purchases such new vehicle for purposes other than resale.
	United States has the meaning given in 40 CFR 1068.30.
	Upcoming model year means for a vehicle family the model year after the one currently in production.
	U.S.-directed production volume means the number of vehicle units, subject to the requirements of this part, produced by a manufacturer for which the manufacturer has a reasonable assurance that sale was or will be made to ultimate purchasers in the United States.  This does not include vehicles certified to state emission standards that are different than the emission standards in this part. 
	Useful life means the period during which a vehicle is required to comply with all applicable emission standards.  
	Vehicle means equipment intended for use on highways that meets at least one of the criteria of paragraph (1) of this definition, as follows:
(1) The following equipment are vehicles:
   (i) A piece of equipment that is intended for self-propelled use on highways becomes a vehicle when it includes at least an engine, a transmission, and a frame.  (Note: For purposes of this definition, any electrical, mechanical, and/or hydraulic devices attached to engines for the purpose of powering wheels are considered to be transmissions.) 
   (ii) A piece of equipment that is intended for self-propelled use on highways becomes a vehicle when it includes a passenger compartment attached to a frame with axles.
   (iii) Trailers.  A trailer becomes a vehicle when it has a frame with axles attached.
(2) Vehicles other than trailers may be complete or incomplete vehicles as follows:
   (i) A complete vehicle is a functioning vehicle that has the primary load carrying device or container (or equivalent equipment) attached.  Examples of equivalent equipment would include fifth wheel trailer hitches, firefighting equipment, and utility booms.  
   (ii) An incomplete vehicle is a vehicle that is not a complete vehicle.  Incomplete vehicles may also be cab-complete vehicles.  This may include vehicles sold to secondary vehicle manufacturers.
   (iii) The primary use of the terms "complete vehicle" and "incomplete vehicle" are to distinguish whether a vehicle is complete when it is first sold as a vehicle.
   (iv) You may ask us to allow you to certify a vehicle as incomplete if you manufacture the engines and sell the unassembled chassis components, as long as you do not produce and sell the body components necessary to complete the vehicle.
	Vehicle configuration means a unique combination of vehicle hardware and calibration (related to measured or modeled emissions) within a vehicle family.  Vehicles with hardware or software differences, but that have no hardware or software differences related to measured or modeled emissions may be included in the same vehicle configuration.  Note that vehicles with hardware or software differences related to measured or modeled emissions are considered to be different configurations even if they have the same GEM inputs and FEL.  Vehicles within a vehicle configuration differ only with respect to normal production variability or factors unrelated to measured or modeled emissions.
	Vehicle family has the meaning given in §1037.230.
	Vehicle service class means a vehicle's weight class as specified in this definition.  Note that, while vehicle service class is similar to primary intended service class for engines, they are not necessarily the same.  For example, a medium heavy-duty vehicle may include a light heavy-duty engine.  Note also that while spark-ignition engines do not have a primary intended service class, vehicles using spark-ignition engines have a vehicle service class.
   (1) Light heavy-duty vehicles are those vehicles with GVWR below 19,500 pounds.  Vehicles In this class include heavy-duty pickup trucks and vans, motor homes and other recreational vehicles, and some straight trucks with a single rear axle. Typical applications would include personal transportation, light-load commercial delivery, passenger service, agriculture, and construction.
   (2) Medium heavy-duty vehicles are those vehicles with GVWR from 19,500 to 33,000 pounds.  Vehicles in this class include school buses, straight trucks with a single rear axle, city tractors, and a variety of special purpose vehicles such as small dump trucks, and refuse trucks. Typical applications would include commercial short haul and intra-city delivery and pickup. 
   (3) Heavy heavy-duty vehicles are those vehicles with GVWR above 33,000 pounds.  Vehicles in this class include tractors, urban buses, and other heavy trucks. 
	Vehicle subfamily or subfamily means a subset of a vehicle family including vehicles subject to the same FEL(s).
	Vocational tractor means a vehicle classified as a vocational tractor under §1037.630.
	Vocational vehicle means relating to a vehicle subject to the standards of §1037.105 (including vocational tractors).
	Void has the meaning given in 40 CFR 1068.30.
	Volatile liquid fuel means any fuel other than diesel or biodiesel that is a liquid at atmospheric pressure and has a Reid Vapor Pressure higher than 2.0 pounds per square inch.
	We (us, our) means the Administrator of the Environmental Protection Agency and any authorized representatives.

§ 1037.805  Symbols, acronyms, and abbreviations. 
	The following symbols, acronyms, and abbreviations apply to this part:
ABT
Averaging, banking, and trading.
AECD
auxiliary emission control device.
AES
Automatic engine shutdown.
CD
drag coefficient.
CDA
drag area.
CFD
computational fluid dynamics.
CFR
Code of Federal Regulations.
CH4
methane.
CO
carbon monoxide.
CO2
carbon dioxide.
CREE
carbon-related exhaust emissions.
DOT
Department of Transportation.
EPA
Environmental Protection Agency.
ETW
equivalent test weight.
FEL
Family Emission Limit.
g
grams.
GAWR
gross axle weight rating.
GCWR
gross combination weight rating.
GVWR
gross vehicle weight rating.
GWP
global-warming potential.
HC
hydrocarbon.
ISO
International Organization for Standardization.
kg
kilograms.
m
meter.
mm
millimeter
mph
miles per hour.
N2O
nitrous oxide.
NARA
National Archives and Records Administration.
NHTSA
National Highway Transportation Safety Administration.
NOx
oxides of nitrogen (NO and NO2).
PM
particulate matter.
PTO
power take-off.
RESS
rechargeable energy storage system.
rpm
revolutions per minute.
SAE 
Society of Automotive Engineers.
SKU
Stock-keeping unit.
TRRL
Tire rolling resistance level.
U.S.C.
United States Code.
VSL
vehicle speed limiter.
WF
work factor.

§ 1037.810  Incorporation by reference.
(a) Certain material is incorporated by reference into this part with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that specified in this section, the Environmental Protection Agency must publish a notice of the change in the Federal Register and the material must be available to the public. All approved material is available for inspection at U.S. EPA, Air and Radiation Docket and Information Center, 1301 Constitution Ave., NW., Room B102, EPA West Building, Washington, DC 20460, (202) 202-1744, and is available from the sources listed below. It is also available for inspection at the National Archives and Records Administration (NARA).  For information on the availability of this material at NARA, call 202 - 741 - 6030, or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
(b)  International Organization for Standardization, Case Postale 56, CH-1211 Geneva 20, Switzerland, (41) 22749 0111, www.iso.org, or central@iso.org.
   (1) ISO 28580:2009(E) "Passenger car, truck and bus tyres  -  Methods of measuring rolling resistance  -  Single point test and correlation of measurement results", First Edition, July 1, 2009; IBR approved for §1037.520(c) ("ISO 28580"). 
   (2) [Reserved]
(c) U.S. EPA, Office of Air and Radiation, 2565 Plymouth Road, Ann Arbor, MI 48105, www.epa.gov:
   (1) Greenhouse gas Emissions Model (GEM) simulation tool, Version 2.0.1, September 2012; IBR approved for § 1037.520. The computer code for this model is available as noted in paragraph (a) of this section. A working version of this software is also available for download at http://www.epa.gov/otaq/climate/gem.htm.
   (2) Greenhouse gas Emissions Model (GEM) simulation tool, Version 3.0, March 2014; IBR approved for § 1037.520. The computer code for this model is available as noted in paragraph (a) of this section. A working version of this software is also available for download at http://www.epa.gov/otaq/climate/gem.htm. 
(d) Society of Automotive Engineers, 400 Commonwealth Dr., Warrendale, PA 15096 - 0001, (877) 606-7323 (U.S. and Canada) or (724) 776 - 4970 (outside the U.S. and Canada), http://www.sae.org.
   (1) SAE J1252, SAE Wind Tunnel Test Procedure for Trucks and Buses, Revised July 1981, IBR approved for §1037.525(d), (e), and (f) ("SAE J1252").
   (2) SAE J1263, Road Load Measurement and Dynamometer Simulation Using Coastdown Techniques, revised March 2010, IBR approved for §§ 1037.525(b), 1037.527(a) and (b), and 1037.533(c) ("SAE J1263").
   (3) SAE J1594, Vehicle Aerodynamics Terminology, Revised July 2010, IBR approved for §1037.525(d) ("SAE J1594").
   (4) SAE J2071, Aerodynamic Testing of Road Vehicles - Open Throat Wind Tunnel Adjustment, Revised June 1994, IBR approved for §1037.525(d) ("SAE J2071").
   (5) SAE J2263, Road Load Measurement Using Onboard Anemometry and Coastdown Techniques, revised December 2008, IBR approved for §§ 1037.527(a) and (b) and 1037.540(e) and (g) ("SAE J2263").
   (6) SAE J2343, Recommended Practice for LNG Medium and Heavy-Duty Powered Vehicles, Revised July 2008, IBR approved for §1037.103(e) ("SAE J2343").
(e) BASF Corporation, 100 Park Avenue, Florham Park, NJ 07932, (973) 245-6000, http://www.basf.com.
   (1) BASF TI/EVO 0137 e, Emgard[(R)] FE 75W-90 Fuel Efficient Synthetic Gear Lubricant, April 2012, IBR approved for §1037.515(d).
   (2) [Reserved]
   
§ 1037.815  Confidential information.
The provisions of 40 CFR 1068.10 apply for information you consider confidential.

§ 1037.820  Requesting a hearing.
(a) You may request a hearing under certain circumstances, as described elsewhere in this part.  To do this, you must file a written request, including a description of your objection and any supporting data, within 30 days after we make a decision.
(b) For a hearing you request under the provisions of this part, we will approve your request if we find that your request raises a substantial factual issue.
(c) If we agree to hold a hearing, we will use the procedures specified in 40 CFR part 1068, subpart G.

§ 1037.825  Reporting and recordkeeping requirements. 
(a) This part includes various requirements to submit and record data or other information.  Unless we specify otherwise, store required records in any format and on any media and keep them readily available for eight years after you send an associated application for certification, or eight years after you generate the data if they do not support an application for certification.  You may not rely on anyone else to meet recordkeeping requirements on your behalf unless we specifically authorize it.  We may review these records at any time.  You must promptly send us organized, written records in English if we ask for them.  We may require you to submit written records in an electronic format. 
(b) The regulations in §1037.255 and 40 CFR 1068.25 and 1068.101 describe your obligation to report truthful and complete information.  This includes information not related to certification. Failing to properly report information and keep the records we specify violates 40 CFR 1068.101(a)(2), which may involve civil or criminal penalties.  
(c) Send all reports and requests for approval to the Designated Compliance Officer (see §1037.801).
(d) Any written information we require you to send to or receive from another company is deemed to be a required record under this section.  Such records are also deemed to be submissions to EPA.  Keep these records for eight years unless the regulations specify a different period.  We may require you to send us these records whether or not you are a certificate holder.
(e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq), the Office of Management and Budget approves the reporting and recordkeeping specified in the applicable regulations.  The following items illustrate the kind of reporting and recordkeeping we require for vehicles regulated under this part:
   (1) We specify the following requirements related to vehicle certification in this part 1037:
      (i) In subpart C of this part we identify a wide range of information required to certify vehicles.
      (ii) In subpart G of this part we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various special compliance provisions. 
      (iii) In §1037.725, 1037.730, and 1037.735 we specify certain records related to averaging, banking, and trading.
    (2) We specify the following requirements related to testing in 40 CFR part 1066:
      (i) In 40 CFR 1066.2 we give an overview of principles for reporting information.
      (ii) In 40 CFR 1066.25 we establish basic guidelines for storing test information.
      (iii) In 40 CFR 1066.695 we identify the specific information and data items to record when measuring emissions.
    (3) We specify the following requirements related to the general compliance provisions in 40 CFR part 1068:
      (i) In 40 CFR 1068.5 we establish a process for evaluating good engineering judgment related to testing and certification.
      (ii) In 40 CFR 1068.25 we describe general provisions related to sending and keeping information
      (iii) In 40 CFR 1068.27 we require manufacturers to make engines available for our testing or inspection if we make such a request.
      (iv) In 40 CFR 1068.105 we require vehicle manufacturers to keep certain records related to duplicate labels from engine manufacturers.
      (v) In 40 CFR 1068.120 we specify recordkeeping related to rebuilding engines.
      (vi) In 40 CFR part 1068, subpart C, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various exemptions.
      (vii) In 40 CFR part 1068, subpart D, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to importing engines.
      (viii) In 40 CFR 1068.450 and 1068.455 we specify certain records related to testing production-line engines in a selective enforcement audit.
      (ix) In 40 CFR 1068.501 we specify certain records related to investigating and reporting emission-related defects.
      (x) In 40 CFR 1068.525 and 1068.530 we specify certain records related to recalling nonconforming engines.
      

Appendix I to Part 1037  --  Heavy-duty Transient Test Cycle
                                       
                                     Time
                                     Speed
                                     Speed
                                     sec.
                                      mph
                                      m/s
                                       1
                                     0.00
                                     0.00
                                       2
                                     0.00
                                     0.00
                                       3
                                     0.00
                                     0.00
                                       4
                                     0.00
                                     0.00
                                       5
                                     0.00
                                     0.00
                                       6
                                     0.00
                                     0.00
                                       7
                                     0.41
                                     0.18
                                       8
                                     1.18
                                     0.53
                                       9
                                     2.26
                                     1.01
                                      10
                                     3.19
                                     1.43
                                      11
                                     3.97
                                     1.77
                                      12
                                     4.66
                                     2.08
                                      13
                                     5.32
                                     2.38
                                      14
                                     5.94
                                     2.66
                                      15
                                     6.48
                                     2.90
                                      16
                                     6.91
                                     3.09
                                      17
                                     7.28
                                     3.25
                                      18
                                     7.64
                                     3.42
                                      19
                                     8.02
                                     3.59
                                      20
                                     8.36
                                     3.74
                                      21
                                     8.60
                                     3.84
                                      22
                                     8.74
                                     3.91
                                      23
                                     8.82
                                     3.94
                                      24
                                     8.82
                                     3.94
                                      25
                                     8.76
                                     3.92
                                      26
                                     8.66
                                     3.87
                                      27
                                     8.58
                                     3.84
                                      28
                                     8.52
                                     3.81
                                      29
                                     8.46
                                     3.78
                                      30
                                     8.38
                                     3.75
                                      31
                                     8.31
                                     3.71
                                      32
                                     8.21
                                     3.67
                                      33
                                     8.11
                                     3.63
                                      34
                                     8.00
                                     3.58
                                      35
                                     7.94
                                     3.55
                                      36
                                     7.94
                                     3.55
                                      37
                                     7.80
                                     3.49
                                      38
                                     7.43
                                     3.32
                                      39
                                     6.79
                                     3.04
                                      40
                                     5.81
                                     2.60
                                      41
                                     4.65
                                     2.08
                                      42
                                     3.03
                                     1.35
                                      43
                                     1.88
                                     0.84
                                      44
                                     1.15
                                     0.51
                                      45
                                     1.14
                                     0.51
                                      46
                                     1.12
                                     0.50
                                      47
                                     1.11
                                     0.50
                                      48
                                     1.19
                                     0.53
                                      49
                                     1.57
                                     0.70
                                      50
                                     2.31
                                     1.03
                                      51
                                     3.37
                                     1.51
                                      52
                                     4.51
                                     2.02
                                      53
                                     5.56
                                     2.49
                                      54
                                     6.41
                                     2.87
                                      55
                                     7.09
                                     3.17
                                      56
                                     7.59
                                     3.39
                                      57
                                     7.99
                                     3.57
                                      58
                                     8.32
                                     3.72
                                      59
                                     8.64
                                     3.86
                                      60
                                     8.91
                                     3.98
                                      61
                                     9.13
                                     4.08
                                      62
                                     9.29
                                     4.15
                                      63
                                     9.40
                                     4.20
                                      64
                                     9.39
                                     4.20
                                      65
                                     9.20
                                     4.11
                                      66
                                     8.84
                                     3.95
                                      67
                                     8.35
                                     3.73
                                      68
                                     7.81
                                     3.49
                                      69
                                     7.22
                                     3.23
                                      70
                                     6.65
                                     2.97
                                      71
                                     6.13
                                     2.74
                                      72
                                     5.75
                                     2.57
                                      73
                                     5.61
                                     2.51
                                      74
                                     5.65
                                     2.53
                                      75
                                     5.80
                                     2.59
                                      76
                                     5.95
                                     2.66
                                      77
                                     6.09
                                     2.72
                                      78
                                     6.21
                                     2.78
                                      79
                                     6.31
                                     2.82
                                      80
                                     6.34
                                     2.83
                                      81
                                     6.47
                                     2.89
                                      82
                                     6.65
                                     2.97
                                      83
                                     6.88
                                     3.08
                                      84
                                     7.04
                                     3.15
                                      85
                                     7.05
                                     3.15
                                      86
                                     7.01
                                     3.13
                                      87
                                     6.90
                                     3.08
                                      88
                                     6.88
                                     3.08
                                      89
                                     6.89
                                     3.08
                                      90
                                     6.96
                                     3.11
                                      91
                                     7.04
                                     3.15
                                      92
                                     7.17
                                     3.21
                                      93
                                     7.29
                                     3.26
                                      94
                                     7.39
                                     3.30
                                      95
                                     7.48
                                     3.34
                                      96
                                     7.57
                                     3.38
                                      97
                                     7.61
                                     3.40
                                      98
                                     7.59
                                     3.39
                                      99
                                     7.53
                                     3.37
                                      100
                                     7.46
                                     3.33
                                      101
                                     7.40
                                     3.31
                                      102
                                     7.39
                                     3.30
                                      103
                                     7.38
                                     3.30
                                      104
                                     7.37
                                     3.29
                                      105
                                     7.37
                                     3.29
                                      106
                                     7.39
                                     3.30
                                      107
                                     7.42
                                     3.32
                                      108
                                     7.43
                                     3.32
                                      109
                                     7.40
                                     3.31
                                      110
                                     7.39
                                     3.30
                                      111
                                     7.42
                                     3.32
                                      112
                                     7.50
                                     3.35
                                      113
                                     7.57
                                     3.38
                                      114
                                     7.60
                                     3.40
                                      115
                                     7.60
                                     3.40
                                      116
                                     7.61
                                     3.40
                                      117
                                     7.64
                                     3.42
                                      118
                                     7.68
                                     3.43
                                      119
                                     7.74
                                     3.46
                                      120
                                     7.82
                                     3.50
                                      121
                                     7.90
                                     3.53
                                      122
                                     7.96
                                     3.56
                                      123
                                     7.99
                                     3.57
                                      124
                                     8.02
                                     3.59
                                      125
                                     8.01
                                     3.58
                                      126
                                     7.87
                                     3.52
                                      127
                                     7.59
                                     3.39
                                      128
                                     7.20
                                     3.22
                                      129
                                     6.52
                                     2.91
                                      130
                                     5.53
                                     2.47
                                      131
                                     4.36
                                     1.95
                                      132
                                     3.30
                                     1.48
                                      133
                                     2.50
                                     1.12
                                      134
                                     1.94
                                     0.87
                                      135
                                     1.56
                                     0.70
                                      136
                                     0.95
                                     0.42
                                      137
                                     0.42
                                     0.19
                                      138
                                     0.00
                                     0.00
                                      139
                                     0.00
                                     0.00
                                      140
                                     0.00
                                     0.00
                                      141
                                     0.00
                                     0.00
                                      142
                                     0.00
                                     0.00
                                      143
                                     0.00
                                     0.00
                                      144
                                     0.00
                                     0.00
                                      145
                                     0.00
                                     0.00
                                      146
                                     0.00
                                     0.00
                                      147
                                     0.00
                                     0.00
                                      148
                                     0.00
                                     0.00
                                      149
                                     0.00
                                     0.00
                                      150
                                     0.00
                                     0.00
                                      151
                                     0.00
                                     0.00
                                      152
                                     0.00
                                     0.00
                                      153
                                     0.00
                                     0.00
                                      154
                                     0.00
                                     0.00
                                      155
                                     0.00
                                     0.00
                                      156
                                     0.00
                                     0.00
                                      157
                                     0.00
                                     0.00
                                      158
                                     0.00
                                     0.00
                                      159
                                     0.00
                                     0.00
                                      160
                                     0.00
                                     0.00
                                      161
                                     0.00
                                     0.00
                                      162
                                     0.00
                                     0.00
                                      163
                                     0.00
                                     0.00
                                      164
                                     0.00
                                     0.00
                                      165
                                     0.00
                                     0.00
                                      166
                                     0.00
                                     0.00
                                      167
                                     0.00
                                     0.00
                                      168
                                     0.00
                                     0.00
                                      169
                                     0.00
                                     0.00
                                      170
                                     0.00
                                     0.00
                                      171
                                     0.00
                                     0.00
                                      172
                                     1.11
                                     0.50
                                      173
                                     2.65
                                     1.18
                                      174
                                     4.45
                                     1.99
                                      175
                                     5.68
                                     2.54
                                      176
                                     6.75
                                     3.02
                                      177
                                     7.59
                                     3.39
                                      178
                                     7.75
                                     3.46
                                      179
                                     7.63
                                     3.41
                                      180
                                     7.67
                                     3.43
                                      181
                                     8.70
                                     3.89
                                      182
                                     10.20
                                     4.56
                                      183
                                     11.92
                                     5.33
                                      184
                                     12.84
                                     5.74
                                      185
                                     13.27
                                     5.93
                                      186
                                     13.38
                                     5.98
                                      187
                                     13.61
                                     6.08
                                      188
                                     14.15
                                     6.33
                                      189
                                     14.84
                                     6.63
                                      190
                                     16.49
                                     7.37
                                      191
                                     18.33
                                     8.19
                                      192
                                     20.36
                                     9.10
                                      193
                                     21.47
                                     9.60
                                      194
                                     22.35
                                     9.99
                                      195
                                     22.96
                                     10.26
                                      196
                                     23.46
                                     10.49
                                      197
                                     23.92
                                     10.69
                                      198
                                     24.42
                                     10.92
                                      199
                                     24.99
                                     11.17
                                      200
                                     25.91
                                     11.58
                                      201
                                     26.26
                                     11.74
                                      202
                                     26.38
                                     11.79
                                      203
                                     26.26
                                     11.74
                                      204
                                     26.49
                                     11.84
                                      205
                                     26.76
                                     11.96
                                      206
                                     27.07
                                     12.10
                                      207
                                     26.64
                                     11.91
                                      208
                                     25.99
                                     11.62
                                      209
                                     24.77
                                     11.07
                                      210
                                     24.04
                                     10.75
                                      211
                                     23.39
                                     10.46
                                      212
                                     22.73
                                     10.16
                                      213
                                     22.16
                                     9.91
                                      214
                                     21.66
                                     9.68
                                      215
                                     21.39
                                     9.56
                                      216
                                     21.43
                                     9.58
                                      217
                                     20.67
                                     9.24
                                      218
                                     17.98
                                     8.04
                                      219
                                     13.15
                                     5.88
                                      220
                                     7.71
                                     3.45
                                      221
                                     3.30
                                     1.48
                                      222
                                     0.88
                                     0.39
                                      223
                                     0.00
                                     0.00
                                      224
                                     0.00
                                     0.00
                                      225
                                     0.00
                                     0.00
                                      226
                                     0.00
                                     0.00
                                      227
                                     0.00
                                     0.00
                                      228
                                     0.00
                                     0.00
                                      229
                                     0.00
                                     0.00
                                      230
                                     0.00
                                     0.00
                                      231
                                     0.00
                                     0.00
                                      232
                                     0.00
                                     0.00
                                      233
                                     0.00
                                     0.00
                                      234
                                     0.00
                                     0.00
                                      235
                                     0.00
                                     0.00
                                      236
                                     0.00
                                     0.00
                                      237
                                     0.00
                                     0.00
                                      238
                                     0.00
                                     0.00
                                      239
                                     0.00
                                     0.00
                                      240
                                     0.00
                                     0.00
                                      241
                                     0.00
                                     0.00
                                      242
                                     0.00
                                     0.00
                                      243
                                     0.00
                                     0.00
                                      244
                                     0.00
                                     0.00
                                      245
                                     0.00
                                     0.00
                                      246
                                     0.00
                                     0.00
                                      247
                                     0.00
                                     0.00
                                      248
                                     0.00
                                     0.00
                                      249
                                     0.00
                                     0.00
                                      250
                                     0.00
                                     0.00
                                      251
                                     0.00
                                     0.00
                                      252
                                     0.00
                                     0.00
                                      253
                                     0.00
                                     0.00
                                      254
                                     0.00
                                     0.00
                                      255
                                     0.00
                                     0.00
                                      256
                                     0.00
                                     0.00
                                      257
                                     0.00
                                     0.00
                                      258
                                     0.00
                                     0.00
                                      259
                                     0.50
                                     0.22
                                      260
                                     1.57
                                     0.70
                                      261
                                     3.07
                                     1.37
                                      262
                                     4.57
                                     2.04
                                      263
                                     5.65
                                     2.53
                                      264
                                     6.95
                                     3.11
                                      265
                                     8.05
                                     3.60
                                      266
                                     9.13
                                     4.08
                                      267
                                     10.05
                                     4.49
                                      268
                                     11.62
                                     5.19
                                      269
                                     12.92
                                     5.78
                                      270
                                     13.84
                                     6.19
                                      271
                                     14.38
                                     6.43
                                      272
                                     15.64
                                     6.99
                                      273
                                     17.14
                                     7.66
                                      274
                                     18.21
                                     8.14
                                      275
                                     18.90
                                     8.45
                                      276
                                     19.44
                                     8.69
                                      277
                                     20.09
                                     8.98
                                      278
                                     21.89
                                     9.79
                                      279
                                     24.15
                                     10.80
                                      280
                                     26.26
                                     11.74
                                      281
                                     26.95
                                     12.05
                                      282
                                     27.03
                                     12.08
                                      283
                                     27.30
                                     12.20
                                      284
                                     28.10
                                     12.56
                                      285
                                     29.44
                                     13.16
                                      286
                                     30.78
                                     13.76
                                      287
                                     32.09
                                     14.35
                                      288
                                     33.24
                                     14.86
                                      289
                                     34.46
                                     15.40
                                      290
                                     35.42
                                     15.83
                                      291
                                     35.88
                                     16.04
                                      292
                                     36.03
                                     16.11
                                      293
                                     35.84
                                     16.02
                                      294
                                     35.65
                                     15.94
                                      295
                                     35.31
                                     15.78
                                      296
                                     35.19
                                     15.73
                                      297
                                     35.12
                                     15.70
                                      298
                                     35.12
                                     15.70
                                      299
                                     35.04
                                     15.66
                                      300
                                     35.08
                                     15.68
                                      301
                                     35.04
                                     15.66
                                      302
                                     35.34
                                     15.80
                                      303
                                     35.50
                                     15.87
                                      304
                                     35.77
                                     15.99
                                      305
                                     35.81
                                     16.01
                                      306
                                     35.92
                                     16.06
                                      307
                                     36.23
                                     16.20
                                      308
                                     36.42
                                     16.28
                                      309
                                     36.65
                                     16.38
                                      310
                                     36.26
                                     16.21
                                      311
                                     36.07
                                     16.12
                                      312
                                     35.84
                                     16.02
                                      313
                                     35.96
                                     16.08
                                      314
                                     36.00
                                     16.09
                                      315
                                     35.57
                                     15.90
                                      316
                                     35.00
                                     15.65
                                      317
                                     34.08
                                     15.24
                                      318
                                     33.39
                                     14.93
                                      319
                                     32.20
                                     14.39
                                      320
                                     30.32
                                     13.55
                                      321
                                     28.48
                                     12.73
                                      322
                                     26.95
                                     12.05
                                      323
                                     26.18
                                     11.70
                                      324
                                     25.38
                                     11.35
                                      325
                                     24.77
                                     11.07
                                      326
                                     23.46
                                     10.49
                                      327
                                     22.39
                                     10.01
                                      328
                                     20.97
                                     9.37
                                      329
                                     20.09
                                     8.98
                                      330
                                     18.90
                                     8.45
                                      331
                                     18.17
                                     8.12
                                      332
                                     16.48
                                     7.37
                                      333
                                     15.07
                                     6.74
                                      334
                                     12.23
                                     5.47
                                      335
                                     10.08
                                     4.51
                                      336
                                     7.71
                                     3.45
                                      337
                                     7.32
                                     3.27
                                      338
                                     8.63
                                     3.86
                                      339
                                     10.77
                                     4.81
                                      340
                                     12.65
                                     5.66
                                      341
                                     13.88
                                     6.20
                                      342
                                     15.03
                                     6.72
                                      343
                                     15.64
                                     6.99
                                      344
                                     16.99
                                     7.60
                                      345
                                     17.98
                                     8.04
                                      346
                                     19.13
                                     8.55
                                      347
                                     18.67
                                     8.35
                                      348
                                     18.25
                                     8.16
                                      349
                                     18.17
                                     8.12
                                      350
                                     18.40
                                     8.23
                                      351
                                     19.63
                                     8.78
                                      352
                                     20.32
                                     9.08
                                      353
                                     21.43
                                     9.58
                                      354
                                     21.47
                                     9.60
                                      355
                                     21.97
                                     9.82
                                      356
                                     22.27
                                     9.96
                                      357
                                     22.69
                                     10.14
                                      358
                                     23.15
                                     10.35
                                      359
                                     23.69
                                     10.59
                                      360
                                     23.96
                                     10.71
                                      361
                                     24.27
                                     10.85
                                      362
                                     24.34
                                     10.88
                                      363
                                     24.50
                                     10.95
                                      364
                                     24.42
                                     10.92
                                      365
                                     24.38
                                     10.90
                                      366
                                     24.31
                                     10.87
                                      367
                                     24.23
                                     10.83
                                      368
                                     24.69
                                     11.04
                                      369
                                     25.11
                                     11.23
                                      370
                                     25.53
                                     11.41
                                      371
                                     25.38
                                     11.35
                                      372
                                     24.58
                                     10.99
                                      373
                                     23.77
                                     10.63
                                      374
                                     23.54
                                     10.52
                                      375
                                     23.50
                                     10.51
                                      376
                                     24.15
                                     10.80
                                      377
                                     24.30
                                     10.86
                                      378
                                     24.15
                                     10.80
                                      379
                                     23.19
                                     10.37
                                      380
                                     22.50
                                     10.06
                                      381
                                     21.93
                                     9.80
                                      382
                                     21.85
                                     9.77
                                      383
                                     21.55
                                     9.63
                                      384
                                     21.89
                                     9.79
                                      385
                                     21.97
                                     9.82
                                      386
                                     21.97
                                     9.82
                                      387
                                     22.01
                                     9.84
                                      388
                                     21.85
                                     9.77
                                      389
                                     21.62
                                     9.67
                                      390
                                     21.62
                                     9.67
                                      391
                                     22.01
                                     9.84
                                      392
                                     22.81
                                     10.20
                                      393
                                     23.54
                                     10.52
                                      394
                                     24.38
                                     10.90
                                      395
                                     24.80
                                     11.09
                                      396
                                     24.61
                                     11.00
                                      397
                                     23.12
                                     10.34
                                      398
                                     21.62
                                     9.67
                                      399
                                     19.90
                                     8.90
                                      400
                                     18.86
                                     8.43
                                      401
                                     17.79
                                     7.95
                                      402
                                     17.25
                                     7.71
                                      403
                                     16.91
                                     7.56
                                      404
                                     16.75
                                     7.49
                                      405
                                     16.75
                                     7.49
                                      406
                                     16.87
                                     7.54
                                      407
                                     16.37
                                     7.32
                                      408
                                     16.37
                                     7.32
                                      409
                                     16.49
                                     7.37
                                      410
                                     17.21
                                     7.69
                                      411
                                     17.41
                                     7.78
                                      412
                                     17.37
                                     7.77
                                      413
                                     16.87
                                     7.54
                                      414
                                     16.72
                                     7.47
                                      415
                                     16.22
                                     7.25
                                      416
                                     15.76
                                     7.05
                                      417
                                     14.72
                                     6.58
                                      418
                                     13.69
                                     6.12
                                      419
                                     12.00
                                     5.36
                                      420
                                     10.43
                                     4.66
                                      421
                                     8.71
                                     3.89
                                      422
                                     7.44
                                     3.33
                                      423
                                     5.71
                                     2.55
                                      424
                                     4.22
                                     1.89
                                      425
                                     2.30
                                     1.03
                                      426
                                     1.00
                                     0.45
                                      427
                                     0.00
                                     0.00
                                      428
                                     0.61
                                     0.27
                                      429
                                     1.19
                                     0.53
                                      430
                                     1.61
                                     0.72
                                      431
                                     1.53
                                     0.68
                                      432
                                     2.34
                                     1.05
                                      433
                                     4.29
                                     1.92
                                      434
                                     7.25
                                     3.24
                                      435
                                     10.20
                                     4.56
                                      436
                                     12.46
                                     5.57
                                      437
                                     14.53
                                     6.50
                                      438
                                     16.22
                                     7.25
                                      439
                                     17.87
                                     7.99
                                      440
                                     19.74
                                     8.82
                                      441
                                     21.01
                                     9.39
                                      442
                                     22.23
                                     9.94
                                      443
                                     22.62
                                     10.11
                                      444
                                     23.61
                                     10.55
                                      445
                                     24.88
                                     11.12
                                      446
                                     26.15
                                     11.69
                                      447
                                     26.99
                                     12.07
                                      448
                                     27.56
                                     12.32
                                      449
                                     28.18
                                     12.60
                                      450
                                     28.94
                                     12.94
                                      451
                                     29.83
                                     13.34
                                      452
                                     30.78
                                     13.76
                                      453
                                     31.82
                                     14.22
                                      454
                                     32.78
                                     14.65
                                      455
                                     33.24
                                     14.86
                                      456
                                     33.47
                                     14.96
                                      457
                                     33.31
                                     14.89
                                      458
                                     33.08
                                     14.79
                                      459
                                     32.78
                                     14.65
                                      460
                                     32.39
                                     14.48
                                      461
                                     32.13
                                     14.36
                                      462
                                     31.82
                                     14.22
                                      463
                                     31.55
                                     14.10
                                      464
                                     31.25
                                     13.97
                                      465
                                     30.94
                                     13.83
                                      466
                                     30.71
                                     13.73
                                      467
                                     30.56
                                     13.66
                                      468
                                     30.79
                                     13.76
                                      469
                                     31.13
                                     13.92
                                      470
                                     31.55
                                     14.10
                                      471
                                     31.51
                                     14.09
                                      472
                                     31.47
                                     14.07
                                      473
                                     31.44
                                     14.05
                                      474
                                     31.51
                                     14.09
                                      475
                                     31.59
                                     14.12
                                      476
                                     31.67
                                     14.16
                                      477
                                     32.01
                                     14.31
                                      478
                                     32.63
                                     14.59
                                      479
                                     33.39
                                     14.93
                                      480
                                     34.31
                                     15.34
                                      481
                                     34.81
                                     15.56
                                      482
                                     34.20
                                     15.29
                                      483
                                     32.39
                                     14.48
                                      484
                                     30.29
                                     13.54
                                      485
                                     28.56
                                     12.77
                                      486
                                     26.45
                                     11.82
                                      487
                                     24.79
                                     11.08
                                      488
                                     23.12
                                     10.34
                                      489
                                     20.73
                                     9.27
                                      490
                                     18.33
                                     8.19
                                      491
                                     15.72
                                     7.03
                                      492
                                     13.11
                                     5.86
                                      493
                                     10.47
                                     4.68
                                      494
                                     7.82
                                     3.50
                                      495
                                     5.70
                                     2.55
                                      496
                                     3.57
                                     1.60
                                      497
                                     0.92
                                     0.41
                                      498
                                     0.00
                                     0.00
                                      499
                                     0.00
                                     0.00
                                      500
                                     0.00
                                     0.00
                                      501
                                     0.00
                                     0.00
                                      502
                                     0.00
                                     0.00
                                      503
                                     0.00
                                     0.00
                                      504
                                     0.00
                                     0.00
                                      505
                                     0.00
                                     0.00
                                      506
                                     0.00
                                     0.00
                                      507
                                     0.00
                                     0.00
                                      508
                                     0.00
                                     0.00
                                      509
                                     0.00
                                     0.00
                                      510
                                     0.00
                                     0.00
                                      511
                                     0.00
                                     0.00
                                      512
                                     0.00
                                     0.00
                                      513
                                     0.00
                                     0.00
                                      514
                                     0.00
                                     0.00
                                      515
                                     0.00
                                     0.00
                                      516
                                     0.00
                                     0.00
                                      517
                                     0.00
                                     0.00
                                      518
                                     0.00
                                     0.00
                                      519
                                     0.00
                                     0.00
                                      520
                                     0.00
                                     0.00
                                      521
                                     0.00
                                     0.00
                                      522
                                     0.50
                                     0.22
                                      523
                                     1.50
                                     0.67
                                      524
                                     3.00
                                     1.34
                                      525
                                     4.50
                                     2.01
                                      526
                                     5.80
                                     2.59
                                      527
                                     6.52
                                     2.91
                                      528
                                     6.75
                                     3.02
                                      529
                                     6.44
                                     2.88
                                      530
                                     6.17
                                     2.76
                                      531
                                     6.33
                                     2.83
                                      532
                                     6.71
                                     3.00
                                      533
                                     7.40
                                     3.31
                                      534
                                     7.67
                                     3.43
                                      535
                                     7.33
                                     3.28
                                      536
                                     6.71
                                     3.00
                                      537
                                     6.41
                                     2.87
                                      538
                                     6.60
                                     2.95
                                      539
                                     6.56
                                     2.93
                                      540
                                     5.94
                                     2.66
                                      541
                                     5.45
                                     2.44
                                      542
                                     5.87
                                     2.62
                                      543
                                     6.71
                                     3.00
                                      544
                                     7.56
                                     3.38
                                      545
                                     7.59
                                     3.39
                                      546
                                     7.63
                                     3.41
                                      547
                                     7.67
                                     3.43
                                      548
                                     7.67
                                     3.43
                                      549
                                     7.48
                                     3.34
                                      550
                                     7.29
                                     3.26
                                      551
                                     7.29
                                     3.26
                                      552
                                     7.40
                                     3.31
                                      553
                                     7.48
                                     3.34
                                      554
                                     7.52
                                     3.36
                                      555
                                     7.52
                                     3.36
                                      556
                                     7.48
                                     3.34
                                      557
                                     7.44
                                     3.33
                                      558
                                     7.28
                                     3.25
                                      559
                                     7.21
                                     3.22
                                      560
                                     7.09
                                     3.17
                                      561
                                     7.06
                                     3.16
                                      562
                                     7.29
                                     3.26
                                      563
                                     7.75
                                     3.46
                                      564
                                     8.55
                                     3.82
                                      565
                                     9.09
                                     4.06
                                      566
                                     10.04
                                     4.49
                                      567
                                     11.12
                                     4.97
                                      568
                                     12.46
                                     5.57
                                      569
                                     13.00
                                     5.81
                                      570
                                     14.26
                                     6.37
                                      571
                                     15.37
                                     6.87
                                      572
                                     17.02
                                     7.61
                                      573
                                     18.17
                                     8.12
                                      574
                                     19.21
                                     8.59
                                      575
                                     20.17
                                     9.02
                                      576
                                     20.66
                                     9.24
                                      577
                                     21.12
                                     9.44
                                      578
                                     21.43
                                     9.58
                                      579
                                     22.66
                                     10.13
                                      580
                                     23.92
                                     10.69
                                      581
                                     25.42
                                     11.36
                                      582
                                     25.53
                                     11.41
                                      583
                                     26.68
                                     11.93
                                      584
                                     28.14
                                     12.58
                                      585
                                     30.06
                                     13.44
                                      586
                                     30.94
                                     13.83
                                      587
                                     31.63
                                     14.14
                                      588
                                     32.36
                                     14.47
                                      589
                                     33.24
                                     14.86
                                      590
                                     33.66
                                     15.05
                                      591
                                     34.12
                                     15.25
                                      592
                                     35.92
                                     16.06
                                      593
                                     37.72
                                     16.86
                                      594
                                     39.26
                                     17.55
                                      595
                                     39.45
                                     17.64
                                      596
                                     39.83
                                     17.81
                                      597
                                     40.18
                                     17.96
                                      598
                                     40.48
                                     18.10
                                      599
                                     40.75
                                     18.22
                                      600
                                     41.02
                                     18.34
                                      601
                                     41.36
                                     18.49
                                      602
                                     41.79
                                     18.68
                                      603
                                     42.40
                                     18.95
                                      604
                                     42.82
                                     19.14
                                      605
                                     43.05
                                     19.25
                                      606
                                     43.09
                                     19.26
                                      607
                                     43.24
                                     19.33
                                      608
                                     43.59
                                     19.49
                                      609
                                     44.01
                                     19.67
                                      610
                                     44.35
                                     19.83
                                      611
                                     44.55
                                     19.92
                                      612
                                     44.82
                                     20.04
                                      613
                                     45.05
                                     20.14
                                      614
                                     45.31
                                     20.26
                                      615
                                     45.58
                                     20.38
                                      616
                                     46.00
                                     20.56
                                      617
                                     46.31
                                     20.70
                                      618
                                     46.54
                                     20.81
                                      619
                                     46.61
                                     20.84
                                      620
                                     46.92
                                     20.98
                                      621
                                     47.19
                                     21.10
                                      622
                                     47.46
                                     21.22
                                      623
                                     47.54
                                     21.25
                                      624
                                     47.54
                                     21.25
                                      625
                                     47.54
                                     21.25
                                      626
                                     47.50
                                     21.23
                                      627
                                     47.50
                                     21.23
                                      628
                                     47.50
                                     21.23
                                      629
                                     47.31
                                     21.15
                                      630
                                     47.04
                                     21.03
                                      631
                                     46.77
                                     20.91
                                      632
                                     45.54
                                     20.36
                                      633
                                     43.24
                                     19.33
                                      634
                                     41.52
                                     18.56
                                      635
                                     39.79
                                     17.79
                                      636
                                     38.07
                                     17.02
                                      637
                                     36.34
                                     16.25
                                      638
                                     34.04
                                     15.22
                                      639
                                     32.45
                                     14.51
                                      640
                                     30.86
                                     13.80
                                      641
                                     28.83
                                     12.89
                                      642
                                     26.45
                                     11.82
                                      643
                                     24.27
                                     10.85
                                      644
                                     22.04
                                     9.85
                                      645
                                     19.82
                                     8.86
                                      646
                                     17.04
                                     7.62
                                      647
                                     14.26
                                     6.37
                                      648
                                     11.52
                                     5.15
                                      649
                                     8.78
                                     3.93
                                      650
                                     7.17
                                     3.21
                                      651
                                     5.56
                                     2.49
                                      652
                                     3.72
                                     1.66
                                      653
                                     3.38
                                     1.51
                                      654
                                     3.11
                                     1.39
                                      655
                                     2.58
                                     1.15
                                      656
                                     1.66
                                     0.74
                                      657
                                     0.67
                                     0.30
                                      658
                                     0.00
                                     0.00
                                      659
                                     0.00
                                     0.00
                                      660
                                     0.00
                                     0.00
                                      661
                                     0.00
                                     0.00
                                      662
                                     0.00
                                     0.00
                                      663
                                     0.00
                                     0.00
                                      664
                                     0.00
                                     0.00
                                      665
                                     0.00
                                     0.00
                                      666
                                     0.00
                                     0.00
                                      667
                                     0.00
                                     0.00
                                      668
                                     0.00
                                     0.00

Appendix II to Part 1037  --  Power Take-Off Test Cycle
Cycle Simulation
                                     Mode
                              Start Time of Mode
                      Normalized Pressure, Circuit 1 (%)
                      Normalized Pressure, Circuit 2 (%)
Utility
                                       0
                                       0
                                      0.0
                                      0.0
Utility
                                       1
                                      33
                                     80.5
                                      0.0
Utility
                                       2
                                      40
                                      0.0
                                      0.0
Utility
                                       3
                                      145
                                     83.5
                                      0.0
Utility
                                       4
                                      289
                                      0.0
                                      0.0
Refuse
                                       5
                                      361
                                      0.0
                                     13.0
Refuse
                                       6
                                      363
                                      0.0
                                     38.0
Refuse
                                       7
                                      373
                                      0.0
                                     53.0
Refuse
                                       8
                                      384
                                      0.0
                                     73.0
Refuse
                                       9
                                      388
                                      0.0
                                      0.0
Refuse
                                      10
                                      401
                                      0.0
                                     13.0
Refuse
                                      11
                                      403
                                      0.0
                                     38.0
Refuse
                                      12
                                      413
                                      0.0
                                     53.0
Refuse
                                      13
                                      424
                                      0.0
                                     73.0
Refuse
                                      14
                                      442
                                     11.2
                                      0.0
Refuse
                                      15
                                      468
                                     29.3
                                      0.0
Refuse
                                      16
                                      473
                                      0.0
                                      0.0
Refuse
                                      17
                                      486
                                     11.2
                                      0.0
Refuse
                                      18
                                      512
                                     29.3
                                      0.0
Refuse
                                      19
                                      517
                                      0.0
                                      0.0
Refuse
                                      20
                                      530
                                     12.8
                                     11.1
Refuse
                                      21
                                      532
                                     12.8
                                     38.2
Refuse
                                      22
                                      541
                                     12.8
                                     53.4
Refuse
                                      23
                                      550
                                     12.8
                                     73.5
Refuse
                                      24
                                      553
                                      0.0
                                      0.0
Refuse
                                      25
                                      566
                                     12.8
                                     11.1
Refuse
                                      26
                                      568
                                     12.8
                                     38.2
Refuse
                                      27
                                      577
                                     12.8
                                     53.4
Refuse
                                      28
                                      586
                                     12.8
                                     73.5
Refuse
                                      29
                                      589
                                      0.0
                                      0.0
Refuse
                                      30
                                      600
                                      0.0
                                      0.0


Appendix III to Part 1037  --  Emission Control Identifiers
This appendix identifies abbreviations for emission control information labels, as required under §1037.135.
Vehicle Speed Limiters
	-VSL  -  Vehicle speed limiter 
	-VSLS  -  "Soft-top" vehicle speed limiter
	-VSLE  -  Expiring vehicle speed limiter
	-VSLD  -  Vehicle speed limiter with both "soft-top" and expiration

Idle Reduction Technology 
	-IRT5  -  Engine shutoff after 5 minutes or less of idling
-IRTE  -  Expiring engine shutoff

Tires
	-LRRA  -  Low rolling resistance tires (all)
    -LRRD  -  Low rolling resistance tires (drive)
    -LRRS  -  Low rolling resistance tires (steer)

Aerodynamic Components
	-ATS  -  Aerodynamic side skirt and/or fuel tank fairing
	-ARF  -  Aerodynamic roof fairing
	-ARFR  -  Adjustable height aerodynamic roof fairing
	-TGR  -  Gap reducing tractor fairing (tractor to trailer gap) 
	-TGRT  -  Gap reducing trailer fairing (tractor to trailer gap)
	-TATS  -  Trailer aerodynamic side skirt
	-TARF  -  Trailer aerodynamic rear fairing
	-TAUD  -  Trailer aerodynamic underbody device

Other Components
	-ADVH  -  Vehicle includes advanced hybrid technology components 
    -ADVO  -  Vehicle includes other advanced technology components (i.e., non-hybrid system)
	-INV  -  Vehicle includes innovative (off-cycle) technology components
	-ATI  -  Automatic tire inflation system
	-WRTW  -  Weight-reducing trailer wheels
	-WRTC  -  Weight-reducing trailer upper coupler plate
	-WRTS  -  Weight-reducing trailer axle sub-frames
	-WBSW  -  Wide-based single trailer tires with steel wheel
	-WBAW  -  Wide-based single trailer tires with aluminum wheel
	-WBLW  -  Wide-based single trailer tires with light-weight aluminum alloy wheel
	-DWSW  -  Dual-wide trailer tires with steel wheel
	-DWAW  -  Dual-wide trailer tires with aluminum wheel
	-DWLW  -  Dual-wide trailer tires with light-weight aluminum alloy wheel

Appendix IV to Part 1037  --  Heavy-duty Grade Profile for Phase 2 Steady-State Test Cycles

                                       
                                   Distance
                                     Grade
                                       m
                                       %
                                       0
                                       0
                                       2
                                       0
                                       5
                                       0
                                       7
                                     -0.01
                                      10
                                     -0.03
                                      12
                                     -0.04
                                      15
                                     -0.04
                                      17
                                     -0.07
                                      20
                                     -0.09
                                      22
                                     -0.1
                                      25
                                     -0.12
                                      27
                                     -0.12
                                      29
                                     -0.13
                                      32
                                     -0.15
                                      145
                                     -0.15
                                      148
                                     -0.16
                                      256
                                     -0.16
                                      258
                                     -0.17
                                      263
                                     -0.17
                                      266
                                     -0.18
                                      273
                                     -0.18
                                      275
                                     -0.19
                                      354
                                     -0.19
                                      357
                                     -0.18
                                      374
                                     -0.18
                                      376
                                     -0.17
                                      391
                                     -0.17
                                      394
                                     -0.16
                                      455
                                     -0.16
                                      457
                                     -0.15
                                      470
                                     -0.15
                                      472
                                     -0.14
                                      602
                                     -0.14
                                      605
                                     -0.15
                                      720
                                     -0.15
                                      723
                                     -0.14
                                      770
                                     -0.14
                                      772
                                     -0.15
                                      782
                                     -0.15
                                      784
                                     -0.16
                                      794
                                     -0.16
                                      797
                                     -0.17
                                      807
                                     -0.17
                                      809
                                     -0.18
                                      917
                                     -0.18
                                      920
                                     -0.17
                                      922
                                     -0.17
                                      925
                                     -0.16
                                      927
                                     -0.15
                                      930
                                     -0.15
                                      932
                                     -0.14
                                      934
                                     -0.14
                                      937
                                     -0.13
                                      939
                                     -0.12
                                      942
                                     -0.12
                                      944
                                     -0.11
                                      947
                                     -0.11
                                      949
                                     -0.1
                                      952
                                     -0.1
                                      954
                                     -0.09
                                      957
                                     -0.08
                                      959
                                     -0.08
                                      962
                                     -0.07
                                     1038
                                     -0.07
                                     1040
                                       0
                                     1043
                                     0.06
                                     1045
                                     0.13
                                     1048
                                     0.19
                                     1050
                                     0.26
                                     1052
                                     0.32
                                     1055
                                     0.38
                                     1057
                                     0.45
                                     1060
                                     0.51
                                     1062
                                     0.58
                                     1111
                                     0.58
                                     1114
                                     0.62
                                     1116
                                     0.67
                                     1119
                                     0.71
                                     1121
                                     0.71
                                     1124
                                      0.8
                                     1126
                                     0.85
                                     1128
                                     0.89
                                     1131
                                     0.94
                                     1133
                                     0.99
                                     1136
                                     1.03
                                     1163
                                     1.03
                                     1165
                                     1.17
                                     1168
                                     1.24
                                     1170
                                     1.24
                                     1172
                                     1.38
                                     1175
                                     1.45
                                     1177
                                     1.52
                                     1180
                                     1.59
                                     1182
                                     1.66
                                     1185
                                     1.73
                                     1258
                                     1.73
                                     1260
                                     1.74
                                     1262
                                     1.75
                                     1265
                                     1.76
                                     1267
                                     1.76
                                     1270
                                     1.77
                                     1272
                                     1.78
                                     1275
                                     1.79
                                     1277
                                      1.8
                                     1279
                                     1.81
                                     1282
                                     1.82
                                     1357
                                     1.82
                                     1360
                                     1.81
                                     1364
                                     1.81
                                     1367
                                      1.8
                                     1372
                                      1.8
                                     1374
                                     1.79
                                     1377
                                     1.79
                                     1379
                                     1.78
                                     1384
                                     1.78
                                     1386
                                     1.77
                                     1394
                                     1.77
                                     1396
                                     1.76
                                     1401
                                     1.76
                                     1403
                                     1.75
                                     1486
                                     1.75
                                     1488
                                     1.76
                                     1561
                                     1.76
                                     1564
                                     1.77
                                     1598
                                     1.77
                                     1600
                                     1.78
                                     1695
                                     1.78
                                     1698
                                     1.77
                                     1703
                                     1.77
                                     1705
                                     1.76
                                     1710
                                     1.76
                                     1713
                                     1.75
                                     1717
                                     1.75
                                     1720
                                     1.74
                                     1725
                                     1.74
                                     1727
                                     1.73
                                     1735
                                     1.73
                                     1737
                                     1.72
                                     1742
                                     1.72
                                     1744
                                     1.71
                                     1769
                                     1.71
                                     1771
                                      1.7
                                     1774
                                     1.69
                                     1776
                                     1.68
                                     1778
                                     1.67
                                     1781
                                     1.66
                                     1783
                                     1.65
                                     1786
                                     1.64
                                     1788
                                     1.63
                                     1791
                                     1.62
                                     1793
                                     1.61
                                     1818
                                     1.61
                                     1820
                                     1.58
                                     1822
                                     1.55
                                     1825
                                     1.52
                                     1827
                                     1.49
                                     1830
                                     1.46
                                     1832
                                     1.43
                                     1835
                                     1.41
                                     1837
                                     1.38
                                     1840
                                     1.35
                                     1842
                                     1.32
                                     1940
                                     1.32
                                     1943
                                     1.27
                                     1945
                                     1.21
                                     1947
                                     1.16
                                     1950
                                     1.11
                                     1952
                                     1.06
                                     1955
                                     1.01
                                     1957
                                     0.96
                                     1960
                                     0.91
                                     1962
                                     0.85
                                     1965
                                      0.8
                                     1989
                                      0.8
                                     1992
                                     0.77
                                     1994
                                     0.74
                                     1997
                                     0.71
                                     1999
                                     0.71
                                     2002
                                     0.65
                                     2004
                                     0.61
                                     2006
                                     0.58
                                     2009
                                     0.55
                                     2011
                                     0.52
                                     2014
                                     0.49
                                     2016
                                     0.44
                                     2019
                                     0.38
                                     2021
                                     0.33
                                     2024
                                     0.28
                                     2026
                                     0.23
                                     2029
                                     0.18
                                     2031
                                     0.12
                                     2034
                                     0.07
                                     2036
                                     0.02
                                     2038
                                     -0.03
                                     2165
                                     -0.03
                                     2167
                                     -0.09
                                     2170
                                     -0.12
                                     2172
                                     -0.15
                                     2175
                                     -0.18
                                     2177
                                     -0.2
                                     2180
                                     -0.23
                                     2182
                                     -0.26
                                     2185
                                     -0.26
                                     2187
                                     -0.32
                                     2190
                                     -0.33
                                     2192
                                     -0.34
                                     2194
                                     -0.36
                                     2197
                                     -0.37
                                     2199
                                     -0.38
                                     2202
                                     -0.39
                                     2204
                                     -0.41
                                     2207
                                     -0.42
                                     2209
                                     -0.43
                                     2212
                                     -0.45
                                     2269
                                     -0.45
                                     2271
                                     -0.46
                                     2278
                                     -0.46
                                     2281
                                     -0.47
                                     2288
                                     -0.47
                                     2291
                                     -0.48
                                     2298
                                     -0.48
                                     2301
                                     -0.49
                                     2308
                                     -0.49
                                     2311
                                     -0.5
                                     2360
                                     -0.5
                                     2362
                                     -0.49
                                     2367
                                     -0.49
                                     2370
                                     -0.48
                                     2377
                                     -0.48
                                     2380
                                     -0.47
                                     2436
                                     -0.47
                                     2439
                                     -0.46
                                     2483
                                     -0.46
                                     2485
                                     -0.45
                                     2508
                                     -0.45
                                     2510
                                     -0.44
                                     2530
                                     -0.44
                                     2532
                                     -0.43
                                     2672
                                     -0.43
                                     2675
                                     -0.44
                                     2694
                                     -0.44
                                     2697
                                     -0.45
                                     2717
                                     -0.45
                                     2719
                                     -0.46
                                     2817
                                     -0.46
                                     2820
                                     -0.47
                                     2881
                                     -0.47
                                     2884
                                     -0.46
                                     2899
                                     -0.46
                                     2901
                                     -0.45
                                     2916
                                     -0.45
                                     2918
                                     -0.44
                                     3034
                                     -0.44
                                     3036
                                     -0.43
                                     3157
                                     -0.43
                                     3159
                                     -0.42
                                     3233
                                     -0.42
                                     3236
                                     -0.43
                                     3398
                                     -0.43
                                     3401
                                     -0.42
                                     3570
                                     -0.42
                                     3573
                                     -0.43
                                     3580
                                     -0.43
                                     3583
                                     -0.44
                                     3588
                                     -0.44
                                     3590
                                     -0.45
                                     3789
                                     -0.45
                                     3792
                                     -0.44
                                     3802
                                     -0.44
                                     3804
                                     -0.43
                                     3861
                                     -0.43
                                     3863
                                     -0.45
                                     3866
                                     -0.47
                                     3868
                                     -0.49
                                     3871
                                     -0.51
                                     3873
                                     -0.53
                                     3875
                                     -0.55
                                     3878
                                     -0.57
                                     3880
                                     -0.59
                                     3883
                                     -0.59
                                     3885
                                     -0.63
                                     3984
                                     -0.63
                                     3986
                                     -0.65
                                     3989
                                     -0.66
                                     3991
                                     -0.68
                                     3994
                                     -0.69
                                     3996
                                     -0.71
                                     3999
                                     -0.72
                                     4001
                                     -0.74
                                     4004
                                     -0.75
                                     4006
                                     -0.75
                                     4008
                                     -0.78
                                     4011
                                     -0.8
                                     4013
                                     -0.81
                                     4016
                                     -0.83
                                     4018
                                     -0.84
                                     4021
                                     -0.84
                                     4023
                                     -0.87
                                     4026
                                     -0.89
                                     4028
                                     -0.9
                                     4031
                                     -0.92
                                     4033
                                     -0.93
                                     4110
                                     -0.93
                                     4112
                                     -0.95
                                     4115
                                     -0.99
                                     4117
                                      -1
                                     4119
                                     -1.02
                                     4122
                                     -1.04
                                     4124
                                     -1.06
                                     4127
                                     -1.07
                                     4129
                                     -1.09
                                     4132
                                     -1.11
                                     4233
                                     -1.11
                                     4236
                                     -1.1
                                     4243
                                     -1.1
                                     4246
                                     -1.09
                                     4288
                                     -1.09
                                     4290
                                     -1.08
                                     4385
                                     -1.08
                                     4387
                                     -1.07
                                     4399
                                     -1.07
                                     4402
                                     -1.06
                                     4429
                                     -1.06
                                     4432
                                     -1.04
                                     4434
                                     -1.03
                                     4437
                                     -1.01
                                     4439
                                     -0.99
                                     4442
                                     -0.97
                                     4444
                                     -0.97
                                     4447
                                     -0.93
                                     4449
                                     -0.91
                                     4452
                                     -0.9
                                     4454
                                     -0.88
                                     4553
                                     -0.88
                                     4556
                                     -0.83
                                     4558
                                     -0.83
                                     4561
                                     -0.74
                                     4563
                                     -0.74
                                     4566
                                     -0.64
                                     4568
                                     -0.59
                                     4571
                                     -0.55
                                     4573
                                     -0.5
                                     4576
                                     -0.45
                                     4578
                                     -0.41
                                     4603
                                     -0.41
                                     4605
                                     -0.39
                                     4608
                                     -0.37
                                     4610
                                     -0.35
                                     4613
                                     -0.33
                                     4615
                                     -0.32
                                     4618
                                     -0.3
                                     4620
                                     -0.28
                                     4623
                                     -0.26
                                     4625
                                     -0.24
                                     4628
                                     -0.23
                                     4652
                                     -0.23
                                     4655
                                     -0.2
                                     4657
                                     -0.2
                                     4660
                                     -0.16
                                     4662
                                     -0.14
                                     4665
                                     -0.11
                                     4667
                                     -0.09
                                     4670
                                     -0.07
                                     4672
                                     -0.05
                                     4675
                                     -0.02
                                     4677
                                       0
                                     4751
                                       0
                                     4753
                                     -0.01
                                     4756
                                     -0.01
                                     4758
                                     -0.02
                                     4760
                                     -0.02
                                     4763
                                     -0.03
                                     4765
                                     -0.03
                                     4768
                                     -0.04
                                     4770
                                     -0.04
                                     4773
                                     -0.05
                                     4873
                                     -0.05
                                     4875
                                     -0.06
                                     4880
                                     -0.06
                                     4883
                                     -0.07
                                     4885
                                     -0.07
                                     4888
                                     -0.08
                                     4893
                                     -0.08
                                     4895
                                     -0.09
                                     4976
                                     -0.09
                                     4979
                                     -0.08
                                     4981
                                     -0.08
                                     4984
                                     -0.07
                                     4991
                                     -0.07
                                     4993
                                     -0.06
                                     5072
                                     -0.06
                                     5075
                                     -0.05
                                     5084
                                     -0.05
                                     5087
                                     -0.04
                                     5094
                                     -0.04
                                     5097
                                     -0.03
                                     5107
                                     -0.03
                                     5109
                                     -0.02
                                     5200
                                     -0.02
                                     5202
                                     -0.03
                                     5210
                                     -0.03
                                     5212
                                     -0.04
                                     5340
                                     -0.04
                                     5343
                                     -0.03
                                     5345
                                     -0.03
                                     5347
                                     -0.02
                                     5352
                                     -0.02
                                     5355
                                     -0.01
                                     5357
                                       0
                                     5360
                                       0
                                     5362
                                     0.01
                                     5414
                                     0.01
                                     5416
                                     0.05
                                     5419
                                     0.05
                                     5421
                                     0.12
                                     5424
                                     0.15
                                     5426
                                     0.19
                                     5429
                                     0.22
                                     5431
                                     0.26
                                     5434
                                     0.29
                                     5436
                                     0.33
                                     5438
                                     0.36
                                     5512
                                     0.36
                                     5515
                                     0.41
                                     5517
                                     0.47
                                     5519
                                     0.52
                                     5522
                                     0.57
                                     5524
                                     0.62
                                     5527
                                     0.68
                                     5529
                                     0.73
                                     5532
                                     0.78
                                     5534
                                     0.84
                                     5537
                                     0.89
                                     5561
                                     0.89
                                     5564
                                      0.9
                                     5566
                                     0.91
                                     5568
                                     0.92
                                     5571
                                     0.92
                                     5573
                                     0.93
                                     5576
                                     0.94
                                     5578
                                     0.95
                                     5581
                                     0.96
                                     5583
                                     0.97
                                     5586
                                     0.98
                                     5588
                                       1
                                     5590
                                     1.02
                                     5593
                                     1.03
                                     5595
                                     1.05
                                     5598
                                     1.07
                                     5600
                                     1.09
                                     5603
                                     1.11
                                     5605
                                     1.13
                                     5608
                                     1.15
                                     5610
                                     1.17
                                     5612
                                     1.18
                                     5615
                                     1.19
                                     5617
                                      1.2
                                     5620
                                     1.21
                                     5622
                                     1.21
                                     5625
                                     1.23
                                     5627
                                     1.24
                                     5630
                                     1.25
                                     5632
                                     1.26
                                     5634
                                     1.27
                                     5732
                                     1.27
                                     5734
                                     1.26
                                     5739
                                     1.26
                                     5742
                                     1.25
                                     5749
                                     1.25
                                     5752
                                     1.24
                                     5759
                                     1.24
                                     5761
                                     1.23
                                     5769
                                     1.23
                                     5771
                                     1.22
                                     5776
                                     1.22
                                     5779
                                     1.21
                                     5810
                                     1.21
                                     5813
                                      1.2
                                     5825
                                      1.2
                                     5828
                                     1.19
                                     5977
                                     1.19
                                     5980
                                      1.2
                                     5997
                                      1.2
                                     5999
                                     1.21
                                     6102
                                     1.21
                                     6105
                                      1.2
                                     6122
                                      1.2
                                     6124
                                     1.19
                                     6166
                                     1.19
                                     6169
                                      1.2
                                     6205
                                      1.2
                                     6208
                                     1.21
                                     6215
                                     1.21
                                     6218
                                     1.22
                                     6299
                                     1.22
                                     6301
                                     1.21
                                     6306
                                     1.21
                                     6308
                                     1.19
                                     6311
                                     1.19
                                     6313
                                     1.18
                                     6316
                                     1.18
                                     6318
                                     1.17
                                     6370
                                     1.17
                                     6372
                                     1.16
                                     6375
                                     1.15
                                     6377
                                     1.15
                                     6380
                                     1.14
                                     6382
                                     1.14
                                     6385
                                     1.13
                                     6387
                                     1.13
                                     6389
                                     1.12
                                     6392
                                     1.11
                                     6419
                                     1.11
                                     6421
                                     1.07
                                     6424
                                     1.04
                                     6426
                                     1.04
                                     6429
                                     0.97
                                     6431
                                     0.94
                                     6434
                                     0.91
                                     6436
                                     0.87
                                     6439
                                     0.84
                                     6441
                                     0.84
                                     6443
                                     0.77
                                     6517
                                     0.77
                                     6520
                                     0.73
                                     6522
                                      0.7
                                     6525
                                     0.66
                                     6527
                                     0.62
                                     6529
                                     0.58
                                     6532
                                     0.55
                                     6534
                                     0.51
                                     6537
                                     0.47
                                     6539
                                     0.43
                                     6542
                                      0.4
                                     6566
                                      0.4
                                     6569
                                     0.34
                                     6571
                                     0.29
                                     6574
                                     0.24
                                     6576
                                     0.19
                                     6579
                                     0.14
                                     6581
                                     0.08
                                     6584
                                     0.03
                                     6586
                                     -0.02
                                     6589
                                     -0.07
                                     6591
                                     -0.12
                                     6665
                                     -0.12
                                     6668
                                     -0.15
                                     6670
                                     -0.17
                                     6673
                                     -0.2
                                     6675
                                     -0.22
                                     6678
                                     -0.24
                                     6680
                                     -0.27
                                     6683
                                     -0.29
                                     6685
                                     -0.31
                                     6687
                                     -0.31
                                     6690
                                     -0.36
                                     6692
                                     -0.36
                                     6695
                                     -0.44
                                     6697
                                     -0.6
                                     6700
                                     -0.6
                                     6702
                                     -0.75
                                     6705
                                     -0.75
                                     6707
                                     -0.91
                                     6710
                                     -0.99
                                     6712
                                     -1.07
                                     6715
                                     -1.14
                                     6839
                                     -1.14
                                     6841
                                     -1.21
                                     6844
                                     -1.28
                                     6846
                                     -1.35
                                     6849
                                     -1.42
                                     6851
                                     -1.49
                                     6854
                                     -1.56
                                     6856
                                     -1.63
                                     6859
                                     -1.7
                                     6861
                                     -1.77
                                     6864
                                     -1.84
                                     6866
                                     -1.85
                                     6964
                                     -1.85
                                     6966
                                     -1.86
                                     6969
                                     -1.87
                                     6971
                                     -1.88
                                     6974
                                     -1.9
                                     6976
                                     -1.91
                                     6979
                                     -1.92
                                     6981
                                     -1.94
                                     6984
                                     -1.95
                                     6986
                                     -1.96
                                     6989
                                     -1.98
                                     7115
                                     -1.98
                                     7117
                                     -1.97
                                     7128
                                     -1.97
                                     7130
                                     -1.96
                                     7138
                                     -1.96
                                     7140
                                     -1.95
                                     7295
                                     -1.95
                                     7298
                                     -1.94
                                     7323
                                     -1.94
                                     7326
                                     -1.95
                                     7336
                                     -1.95
                                     7339
                                     -1.96
                                     7451
                                     -1.96
                                     7454
                                     -1.94
                                     7456
                                     -1.94
                                     7459
                                     -1.93
                                     7461
                                     -1.93
                                     7464
                                     -1.92
                                     7466
                                     -1.92
                                     7469
                                     -1.91
                                     7471
                                     -1.9
                                     7474
                                     -1.9
                                     7477
                                     -1.89
                                     7479
                                     -1.88
                                     7482
                                     -1.87
                                     7484
                                     -1.87
                                     7487
                                     -1.86
                                     7489
                                     -1.85
                                     7492
                                     -1.84
                                     7494
                                     -1.83
                                     7574
                                     -1.83
                                     7576
                                     -1.78
                                     7579
                                     -1.72
                                     7581
                                     -1.67
                                     7584
                                     -1.62
                                     7587
                                     -1.57
                                     7589
                                     -1.52
                                     7592
                                     -1.47
                                     7594
                                     -1.42
                                     7597
                                     -1.37
                                     7599
                                     -1.32
                                     7651
                                     -1.32
                                     7653
                                     -1.26
                                     7656
                                     -1.2
                                     7658
                                     -1.14
                                     7661
                                     -1.08
                                     7663
                                     -1.02
                                     7666
                                     -0.96
                                     7668
                                     -0.9
                                     7671
                                     -0.84
                                     7673
                                     -0.78
                                     7676
                                     -0.72
                                     7679
                                     -0.64
                                     7681
                                     -0.56
                                     7684
                                     -0.47
                                     7686
                                     -0.39
                                     7689
                                     -0.31
                                     7691
                                     -0.22
                                     7694
                                     -0.14
                                     7696
                                     -0.06
                                     7699
                                     0.03
                                     7701
                                     0.11
                                     7827
                                     0.11
                                     7829
                                     0.17
                                     7832
                                     0.24
                                     7834
                                      0.3
                                     7837
                                      0.3
                                     7839
                                     0.43
                                     7841
                                     0.49
                                     7844
                                     0.56
                                     7846
                                     0.62
                                     7849
                                     0.69
                                     7851
                                     0.75
                                     7949
                                     0.75
                                     7952
                                     0.74
                                     7954
                                     0.72
                                     7956
                                     0.72
                                     7959
                                      0.7
                                     7961
                                     0.68
                                     7964
                                     0.67
                                     7966
                                     0.66
                                     7969
                                     0.64
                                     7971
                                     0.63
                                     7973
                                     0.62
                                     7976
                                     0.61
                                     7983
                                     0.61
                                     7986
                                      0.6
                                     7988
                                     0.59
                                     7993
                                     0.59
                                     7995
                                     0.58
                                     8051
                                     0.58
                                     8054
                                     0.57
                                     8144
                                     0.57
                                     8147
                                     0.58
                                     8149
                                     0.58
                                     8152
                                     0.59
                                     8154
                                      0.6
                                     8157
                                      0.6
                                     8159
                                     0.61
                                     8162
                                     0.62
                                     8164
                                     0.63
                                     8167
                                     0.63
                                     8169
                                     0.64
                                     8248
                                     0.64
                                     8250
                                     0.65
                                     8265
                                     0.65
                                     8267
                                     0.66
                                     8270
                                     0.65
                                     8272
                                     0.64
                                     8275
                                     0.63
                                     8277
                                     0.63
                                     8280
                                     0.62
                                     8282
                                     0.61
                                     8285
                                     0.61
                                     8287
                                      0.6
                                     8290
                                     0.59
                                     8393
                                     0.59
                                     8395
                                      0.6
                                     8398
                                     0.61
                                     8400
                                     0.61
                                     8403
                                     0.62
                                     8405
                                     0.63
                                     8408
                                     0.64
                                     8410
                                     0.65
                                     8413
                                     0.66
                                     8440
                                     0.66
                                     8442
                                     0.67
                                     8444
                                     0.68
                                     8447
                                     0.69
                                     8449
                                      0.7
                                     8452
                                     0.71
                                     8454
                                     0.72
                                     8457
                                     0.72
                                     8459
                                     0.73
                                     8462
                                     0.73
                                     8464
                                     0.75
                                     8467
                                     0.76
                                     8469
                                     0.77
                                     8472
                                     0.78
                                     8474
                                     0.79
                                     8476
                                     0.79
                                     8479
                                      0.8
                                     8481
                                     0.81
                                     8484
                                     0.82
                                     8486
                                     0.83
                                     8489
                                     0.84
                                     8491
                                     0.87
                                     8494
                                     0.91
                                     8496
                                     0.95
                                     8499
                                     0.98
                                     8501
                                     1.02
                                     8503
                                     1.06
                                     8506
                                      1.1
                                     8508
                                     1.13
                                     8511
                                     1.13
                                     8513
                                      1.2
                                     8516
                                      1.2
                                     8518
                                     1.24
                                     8521
                                     1.31
                                     8523
                                     1.35
                                     8526
                                     1.39
                                     8528
                                     1.42
                                     8530
                                     1.46
                                     8533
                                      1.5
                                     8535
                                     1.53
                                     8538
                                     1.57
                                     8611
                                     1.57
                                     8614
                                     1.64
                                     8616
                                      1.7
                                     8618
                                     1.77
                                     8621
                                     1.83
                                     8623
                                      1.9
                                     8626
                                     1.97
                                     8628
                                     2.03
                                     8631
                                      2.1
                                     8633
                                     2.16
                                     8635
                                     2.23
                                     8662
                                     2.23
                                     8665
                                     2.25
                                     8667
                                     2.27
                                     8670
                                      2.3
                                     8672
                                     2.32
                                     8674
                                     2.34
                                     8677
                                     2.36
                                     8679
                                     2.37
                                     8682
                                     2.39
                                     8684
                                     2.41
                                     8711
                                     2.41
                                     8713
                                     2.39
                                     8716
                                     2.35
                                     8718
                                     2.34
                                     8721
                                     2.32
                                     8723
                                      2.3
                                     8725
                                     2.28
                                     8728
                                     2.26
                                     8730
                                     2.26
                                     8733
                                     2.24
                                     8735
                                     2.22
                                     8805
                                     2.22
                                     8808
                                     2.16
                                     8810
                                     2.16
                                     8812
                                     2.05
                                     8815
                                     2.05
                                     8817
                                     1.93
                                     8820
                                     1.87
                                     8822
                                     1.81
                                     8824
                                     1.75
                                     8827
                                     1.69
                                     8829
                                     1.69
                                     8831
                                     1.64
                                     8901
                                     1.64
                                     8903
                                     1.62
                                     8905
                                     1.62
                                     8908
                                     1.57
                                     8910
                                     1.55
                                     8913
                                     1.53
                                     8915
                                     1.51
                                     8917
                                     1.49
                                     8920
                                     1.47
                                     8922
                                     1.45
                                     8925
                                     1.43
                                     8927
                                     1.43
                                     8930
                                     1.41
                                     8932
                                     1.39
                                     8934
                                     1.36
                                     8937
                                     1.36
                                     8939
                                     1.32
                                     8942
                                     1.32
                                     8944
                                     1.29
                                     8946
                                     1.27
                                     8949
                                     1.25
                                     8951
                                     1.23
                                     8954
                                     1.22
                                     8956
                                      1.2
                                     8959
                                     1.18
                                     8961
                                     1.16
                                     8963
                                     1.15
                                     8966
                                     1.13
                                     8968
                                     1.11
                                     8971
                                     1.09
                                     8973
                                     1.07
                                     9056
                                     1.07
                                     9059
                                     1.06
                                     9066
                                     1.06
                                     9069
                                     1.05
                                     9076
                                     1.05
                                     9079
                                     1.04
                                     9086
                                     1.04
                                     9088
                                     1.03
                                     9093
                                     1.03
                                     9096
                                     1.02
                                     9304
                                     1.02
                                     9306
                                     1.01
                                     9348
                                     1.01
                                     9350
                                       1
                                     9487
                                       1
                                     9490
                                     0.99
                                     9500
                                     0.99
                                     9502
                                     0.98
                                     9547
                                     0.98
                                     9549
                                     0.97
                                     9610
                                     0.97
                                     9613
                                     0.96
                                     9706
                                     0.96
                                     9709
                                     0.97
                                     9711
                                     0.98
                                     9714
                                     0.99
                                     9716
                                       1
                                     9719
                                       1
                                     9721
                                     1.01
                                     9723
                                     1.02
                                     9726
                                     1.03
                                     9728
                                     1.04
                                     9731
                                     1.05
                                     9765
                                     1.05
                                     9768
                                     1.06
                                     9773
                                     1.06
                                     9775
                                     1.07
                                     9927
                                     1.07
                                     9930
                                     1.06
                                     9932
                                     1.05
                                     9934
                                     1.04
                                     9937
                                     1.03
                                     9939
                                     1.02
                                     9942
                                       1
                                     9944
                                     0.99
                                     9947
                                     0.98
                                     9949
                                     0.98
                                     9952
                                     0.96
                                     10006
                                     0.96
                                     10008
                                     0.95
                                     10011
                                     0.95
                                     10013
                                     0.94
                                     10015
                                     0.93
                                     10018
                                     0.93
                                     10020
                                     0.92
                                     10025
                                     0.92
                                     10028
                                     0.91
                                     10050
                                     0.91
                                     10052
                                      0.9
                                     10055
                                     0.89
                                     10057
                                     0.89
                                     10060
                                     0.88
                                     10062
                                     0.87
                                     10065
                                     0.86
                                     10067
                                     0.85
                                     10070
                                     0.84
                                     10072
                                     0.83
                                     10074
                                     0.82
                                     10148
                                     0.82
                                     10151
                                     0.81
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                                     0.79
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                                     0.77
                                     10158
                                     0.76
                                     10161
                                     0.74
                                     10163
                                     0.72
                                     10165
                                     0.71
                                     10168
                                     0.69
                                     10170
                                     0.68
                                     10173
                                     0.66
                                     10175
                                     0.66
                                     10178
                                     0.63
                                     10180
                                     0.61
                                     10183
                                     0.59
                                     10185
                                     0.58
                                     10188
                                     0.56
                                     10190
                                     0.55
                                     10192
                                     0.53
                                     10195
                                     0.51
                                     10197
                                      0.5
                                     10200
                                     0.49
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                                     0.47
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                                     0.46
                                     10207
                                     0.45
                                     10210
                                     0.44
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                                     0.42
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                                     0.41
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                                      0.4
                                     10220
                                     0.39
                                     10222
                                     0.38
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                                     0.38
                                     10227
                                     0.35
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                                     0.34
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                                     0.33
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                                     0.32
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                                      0.3
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                                     0.29
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                                     0.28
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                                     0.27
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                                     0.26
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                                     0.21
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                                     0.21
                                     10254
                                      0.1
                                     10256
                                     0.05
                                     10259
                                       0
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                                     -0.05
                                     10264
                                     -0.1
                                     10266
                                     -0.15
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                                     -0.2
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                                     -0.25
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                                     -0.25
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                                     -0.27
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                                     -0.29
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                                     -0.3
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                                     -0.3
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                                     -0.34
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                                     -0.36
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                                     -0.38
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                                     -0.39
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                                     -0.43
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                                     -0.48
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                                     -0.5
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                                     -0.5
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                                     -0.55
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                                     -0.58
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                                     -0.6
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                                     -0.63
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                                     -0.65
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                                     -0.68
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                                     -0.68
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                                     -0.69
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                                     -0.7
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                                     -0.7
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                                     -0.71
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                                     -0.72
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                                     -0.72
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                                     -0.73
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                                     -0.74
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                                     -0.75
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                                     -0.76
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                                     -0.77
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                                     -0.78
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                                     -0.79
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                                     -0.8
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                                     -0.8
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                                     -0.81
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                                     -0.81
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                                     -0.82
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                                     -0.83
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                                     -0.83
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                                     -0.82
                                     10605
                                     -0.82
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                                     -0.81
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                                     -0.81
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                                     -0.82
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                                     -0.82
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                                     -0.83
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                                     -0.83
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                                     -0.84
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                                     -0.86
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                                     -0.86
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                                     -0.87
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                                     -0.87
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                                     -0.9
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                                     -0.92
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                                     -0.95
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                                     -0.98
                                     10729
                                      -1
                                     10731
                                      -1
                                     10734
                                     -1.06
                                     10736
                                     -1.08
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                                     -1.11
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                                     -1.11
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                                     -1.14
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                                     -1.14
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                                     -1.18
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                                     -1.18
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                                     -1.28
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                                     -1.33
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                                     -1.38
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                                     -1.43
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                                     -1.47
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                                     -1.52
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                                     -1.57
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                                     -1.62
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                                     -1.62
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                                     -1.64
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                                     -1.66
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                                     -1.68
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                                     -1.7
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                                     -1.72
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                                     -1.74
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                                     -1.76
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                                     -1.78
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                                     -1.8
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                                     -1.82
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                                     -1.84
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                                     -1.85
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                                     -1.87
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                                     -1.89
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                                     -1.91
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                                     -1.93
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                                     -1.95
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                                     -1.97
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                                     -1.99
                                     10940
                                     -2.01
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                                     -2.01
                                     11043
                                      -2
                                     11048
                                      -2
                                     11050
                                     -1.98
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                                     -1.98
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                                     -1.97
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                                     -1.96
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                                     -1.96
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                                     -1.95
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                                     -1.95
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                                     -1.63
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                                     -1.3
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                                     -1.31
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                                     -1.32
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                                     -1.33
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                                     -1.37
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                                     -1.4
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                                     -1.41
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                                     -1.5
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                                     -1.57
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                                     -1.59
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                                     -1.61
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                                     -1.64
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                                     -1.9
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                                     -1.91
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                                     -1.91
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                                     -1.92
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                                     -1.97
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                                     -1.98
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                                     -1.98
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                                     -1.96
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                                     -1.95
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                                     -1.93
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                                     -1.92
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                                     -1.9
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                                     -1.89
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                                     -1.87
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                                     -1.86
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                                     -1.84
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                                     -1.83
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                                     -1.8
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                                     -1.77
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                                     -1.75
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                                     -1.72
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                                     -1.69
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                                     -1.66
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                                     -1.63
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                                     -1.61
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                                     -1.58
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                                     -1.55
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                                     -1.52
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                                     -1.49
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                                     -1.38
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                                     -1.35
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                                     -1.33
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                                     -1.3
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                                     -1.27
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                                     -1.18
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                                     -0.99
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                                     -0.9
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                                     -0.81
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                                     -0.72
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                                     -0.62
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                                     -0.53
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                                     -0.35
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                                     -0.16
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                                     -0.06
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                                     0.03
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                                     0.13
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                                     0.22
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                                     0.31
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                                     0.41
                                     12811
                                      0.5
                                     12813
                                      0.6
                                     12816
                                     0.66
                                     12818
                                     0.72
                                     12821
                                     0.79
                                     12823
                                     0.85
                                     12826
                                     0.91
                                     12828
                                     0.97
                                     12831
                                     1.04
                                     12833
                                      1.1
                                     12836
                                      1.1
                                     12838
                                     1.22
                                     12888
                                     1.22
                                     12890
                                     1.25
                                     12893
                                     1.27
                                     12895
                                     1.29
                                     12898
                                     1.31
                                     12900
                                     1.33
                                     12902
                                     1.35
                                     12905
                                     1.37
                                     12907
                                     1.39
                                     12910
                                     1.41
                                     12912
                                     1.43
                                     12999
                                     1.43
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                                     1.42
                                     13032
                                     1.42
                                     13035
                                     1.41
                                     13039
                                     1.41
                                     13042
                                      1.4
                                     13044
                                      1.4
                                     13047
                                     1.39
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                                     1.39
                                     13051
                                     1.38
                                     13158
                                     1.38
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                                     1.39
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                                     1.39
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                                      1.4
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                                      1.4
                                     13170
                                     1.41
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                                     1.41
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                                     1.42
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                                     1.42
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                                     1.43
                                     13332
                                     1.43
                                     13334
                                     1.42
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                                     1.42
                                     13410
                                     1.41
                                     13504
                                     1.41
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                                      1.4
                                     13759
                                      1.4
                                     13761
                                     1.41
                                     13864
                                     1.41
                                     13867
                                     1.42
                                     13882
                                     1.42
                                     13884
                                     1.43
                                     13896
                                     1.43
                                     13899
                                     1.44
                                     13909
                                     1.44
                                     13911
                                     1.45
                                     14029
                                     1.45
                                     14031
                                     1.44
                                     14036
                                     1.44
                                     14039
                                     1.45
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                                     1.45
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                                     1.46
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                                     1.46
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                                     1.47
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                                     1.47
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                                     1.48
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                                     1.48
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                                     1.46
                                     14164
                                     1.44
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                                     1.42
                                     14169
                                      1.4
                                     14171
                                     1.38
                                     14174
                                     1.36
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                                     1.34
                                     14178
                                     1.33
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                                     1.31
                                     14183
                                     1.29
                                     14208
                                     1.29
                                     14210
                                     1.26
                                     14213
                                     1.23
                                     14215
                                     1.19
                                     14218
                                     1.16
                                     14220
                                     1.13
                                     14223
                                      1.1
                                     14225
                                     1.07
                                     14228
                                     1.04
                                     14230
                                       1
                                     14232
                                     0.97
                                     14257
                                     0.97
                                     14259
                                     0.91
                                     14262
                                     0.85
                                     14264
                                     0.78
                                     14267
                                     0.72
                                     14269
                                     0.66
                                     14272
                                     0.59
                                     14274
                                     0.53
                                     14277
                                     0.47
                                     14279
                                      0.4
                                     14282
                                     0.34
                                     14379
                                     0.34
                                     14381
                                     0.21
                                     14384
                                     0.08
                                     14386
                                     -0.04
                                     14389
                                     -0.17
                                     14391
                                     -0.3
                                     14393
                                     -0.43
                                     14396
                                     -0.56
                                     14398
                                     -0.68
                                     14401
                                     -0.81
                                     14403
                                     -0.94
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                                     -0.94
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                                     -0.98
                                     14531
                                     -1.03
                                     14533
                                     -1.07
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                                     -1.12
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                                     -1.16
                                     14541
                                     -1.21
                                     14543
                                     -1.25
                                     14546
                                     -1.3
                                     14548
                                     -1.34
                                     14551
                                     -1.39
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                                     -1.39
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                                     -1.38
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                                     -1.38
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                                     -1.37
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                                     -1.37
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                                     -1.36
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                                     -1.36
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                                     -1.35
                                     14807
                                     -1.35
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                                     -1.34
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                                     -1.34
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                                     -1.33
                                     14820
                                     -1.33
                                     14823
                                     -1.32
                                     14828
                                     -1.32
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                                     -1.31
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                                     -1.31
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                                     -1.3
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                                     -1.29
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                                     -1.3
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                                     -1.31
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                                     -1.32
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                                     -1.34
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                                     -1.35
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                                     -1.36
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                                     -1.37
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                                     -1.38
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                                     -1.4
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                                     -1.38
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                                     -1.36
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                                     -1.34
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                                     -1.32
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                                     -1.3
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                                     -1.27
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                                     -1.25
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                                     -1.23
                                     15249
                                     -1.21
                                     15251
                                     -1.19
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                                     -1.19
                                     15354
                                     -1.1
                                     15357
                                      -1
                                     15359
                                     -0.91
                                     15362
                                     -0.82
                                     15364
                                     -0.73
                                     15367
                                     -0.64
                                     15369
                                     -0.55
                                     15372
                                     -0.46
                                     15374
                                     -0.37
                                     15377
                                     -0.28
                                     15379
                                     -0.2
                                     15382
                                     -0.12
                                     15384
                                     -0.04
                                     15387
                                     0.03
                                     15389
                                     0.11
                                     15392
                                     0.19
                                     15394
                                     0.26
                                     15397
                                     0.34
                                     15399
                                     0.42
                                     15402
                                     0.49
                                     15501
                                     0.49
                                     15503
                                     0.59
                                     15506
                                     0.69
                                     15508
                                     0.79
                                     15511
                                     0.89
                                     15513
                                     0.99
                                     15516
                                     1.08
                                     15518
                                     1.18
                                     15521
                                     1.28
                                     15523
                                     1.38
                                     15525
                                     1.48
                                     15598
                                     1.48
                                     15601
                                     1.51
                                     15603
                                     1.55
                                     15606
                                     1.58
                                     15608
                                     1.62
                                     15610
                                     1.65
                                     15613
                                     1.68
                                     15615
                                     1.72
                                     15618
                                     1.75
                                     15620
                                     1.79
                                     15623
                                     1.82
                                     15625
                                     1.83
                                     15627
                                     1.85
                                     15630
                                     1.85
                                     15632
                                     1.87
                                     15635
                                     1.88
                                     15637
                                     1.89
                                     15639
                                     1.91
                                     15642
                                     1.92
                                     15644
                                     1.93
                                     15647
                                     1.94
                                     15721
                                     1.94
                                     15723
                                     1.93
                                     15726
                                     1.93
                                     15728
                                     1.92
                                     15730
                                     1.92
                                     15733
                                     1.91
                                     15738
                                     1.91
                                     15740
                                      1.9
                                     15742
                                      1.9
                                     15745
                                     1.89
                                     15747
                                     1.89
                                     15749
                                     1.88
                                     15752
                                     1.88
                                     15754
                                     1.87
                                     15757
                                     1.87
                                     15759
                                     1.86
                                     15761
                                     1.86
                                     15764
                                     1.85
                                     15773
                                     1.85
                                     15776
                                     1.84
                                     15783
                                     1.84
                                     15785
                                     1.83
                                     15867
                                     1.83
                                     15870
                                     1.84
                                     15877
                                     1.84
                                     15879
                                     1.85
                                     15962
                                     1.85
                                     15965
                                     1.86
                                     15977
                                     1.86
                                     15979
                                     1.87
                                     16141
                                     1.87
                                     16144
                                     1.88
                                     16259
                                     1.88
                                     16262
                                     1.89
                                     16266
                                     1.89
                                     16269
                                      1.9
                                     16276
                                      1.9
                                     16279
                                     1.91
                                     16328
                                     1.91
                                     16330
                                      1.9
                                     16333
                                     1.89
                                     16335
                                     1.88
                                     16338
                                     1.87
                                     16340
                                     1.86
                                     16342
                                     1.85
                                     16345
                                     1.85
                                     16347
                                     1.84
                                     16350
                                     1.83
                                     16352
                                     1.82
                                     16377
                                     1.82
                                     16379
                                     1.79
                                     16382
                                     1.77
                                     16384
                                     1.75
                                     16387
                                     1.72
                                     16389
                                      1.7
                                     16392
                                     1.68
                                     16394
                                     1.65
                                     16396
                                     1.63
                                     16399
                                     1.61
                                     16401
                                     1.58
                                     16500
                                     1.58
                                     16502
                                     1.54
                                     16504
                                      1.5
                                     16507
                                     1.45
                                     16509
                                     1.41
                                     16512
                                     1.36
                                     16514
                                     1.32
                                     16517
                                     1.27
                                     16519
                                     1.23
                                     16522
                                     1.19
                                     16524
                                     1.14
                                     16527
                                     1.11
                                     16529
                                     1.08
                                     16531
                                     1.05
                                     16534
                                     1.02
                                     16536
                                       1
                                     16539
                                     0.97
                                     16541
                                     0.94
                                     16544
                                     0.91
                                     16546
                                     0.88
                                     16549
                                     0.85
                                     16625
                                     0.85
                                     16627
                                     0.84
                                     16630
                                     0.83
                                     16632
                                     0.81
                                     16634
                                     0.79
                                     16637
                                     0.79
                                     16639
                                     0.77
                                     16642
                                     0.75
                                     16644
                                     0.74
                                     16649
                                     0.74
                                     16651
                                     0.73
                                     16678
                                     0.73
                                     16680
                                     0.74
                                     16692
                                     0.74
                                     16695
                                     0.75
                                     16772
                                     0.75
                                     16774
                                     0.76
                                     16777
                                     0.76
                                     16779
                                     0.77
                                     16782
                                     0.77
                                     16784
                                     0.78
                                     16789
                                     0.78
                                     16791
                                     0.79
                                     16897
                                     0.79
                                     16899
                                     0.78
                                     16919
                                     0.78
                                     16921
                                     0.77
                                     16936
                                     0.77
                                     16939
                                     0.76
                                     17012
                                     0.76
                                     17015
                                     0.77
                                     17062
                                     0.77
                                     17064
                                     0.78
                                     17081
                                     0.78
                                     17084
                                     0.79
                                     17103
                                     0.79
                                     17106
                                      0.8
                                     17153
                                      0.8
                                     17155
                                     0.81
                                     17177
                                     0.81
                                     17180
                                     0.82
                                     17266
                                     0.82
                                     17268
                                     0.81
                                     17278
                                     0.81
                                     17280
                                      0.8
                                     17293
                                      0.8
                                     17295
                                     0.79
                                     17408
                                     0.79
                                     17410
                                     0.77
                                     17413
                                     0.76
                                     17415
                                     0.75
                                     17418
                                     0.74
                                     17420
                                     0.74
                                     17423
                                     0.73
                                     17425
                                     0.72
                                     17428
                                     0.71
                                     17430
                                      0.7
                                     17455
                                      0.7
                                     17457
                                     0.68
                                     17460
                                     0.66
                                     17462
                                     0.64
                                     17464
                                     0.62
                                     17467
                                     0.59
                                     17469
                                     0.57
                                     17472
                                     0.55
                                     17474
                                     0.53
                                     17477
                                     0.51
                                     17479
                                     0.49
                                     17528
                                     0.49
                                     17531
                                     0.43
                                     17533
                                     0.37
                                     17536
                                     0.31
                                     17538
                                     0.31
                                     17541
                                     0.18
                                     17543
                                     0.12
                                     17546
                                     0.06
                                     17548
                                       0
                                     17551
                                     -0.06
                                     17553
                                     -0.12
                                     17649
                                     -0.12
                                     17652
                                     -0.13
                                     17654
                                     -0.27
                                     17657
                                     -0.42
                                     17659
                                     -0.42
                                     17662
                                     -0.71
                                     17664
                                     -0.86
                                     17667
                                      -1
                                     17669
                                     -1.15
                                     17672
                                     -1.29
                                     17674
                                     -1.44
                                     17677
                                     -1.58
                                     17801
                                     -1.58
                                     17803
                                     -1.61
                                     17806
                                     -1.64
                                     17808
                                     -1.67
                                     17811
                                     -1.69
                                     17813
                                     -1.72
                                     17816
                                     -1.75
                                     17818
                                     -1.78
                                     17821
                                     -1.81
                                     17823
                                     -1.83
                                     17826
                                     -1.86
                                     17851
                                     -1.86
                                     17854
                                     -1.87
                                     17856
                                     -1.88
                                     17859
                                     -1.89
                                     17861
                                     -1.89
                                     17864
                                     -1.9
                                     17866
                                     -1.91
                                     17869
                                     -1.92
                                     17871
                                     -1.92
                                     17874
                                     -1.93
                                     17876
                                     -1.94
                                     17879
                                     -1.93
                                     17884
                                     -1.93
                                     17886
                                     -1.91
                                     17889
                                     -1.91
                                     17891
                                     -1.9
                                     17894
                                     -1.89
                                     17896
                                     -1.88
                                     17899
                                     -1.88
                                     17901
                                     -1.87
                                     18028
                                     -1.87
                                     18030
                                     -1.85
                                     18033
                                     -1.83
                                     18035
                                     -1.83
                                     18038
                                     -1.79
                                     18040
                                     -1.77
                                     18043
                                     -1.75
                                     18045
                                     -1.73
                                     18048
                                     -1.71
                                     18051
                                     -1.69
                                     18053
                                     -1.67
                                     18180
                                     -1.67
                                     18182
                                     -1.69
                                     18185
                                     -1.7
                                     18188
                                     -1.71
                                     18190
                                     -1.72
                                     18193
                                     -1.74
                                     18195
                                     -1.75
                                     18198
                                     -1.76
                                     18200
                                     -1.78
                                     18203
                                     -1.79
                                     18205
                                     -1.8
                                     18231
                                     -1.8
                                     18233
                                     -1.81
                                     18236
                                     -1.83
                                     18238
                                     -1.84
                                     18241
                                     -1.85
                                     18243
                                     -1.87
                                     18246
                                     -1.88
                                     18248
                                     -1.89
                                     18251
                                     -1.91
                                     18254
                                     -1.92
                                     18256
                                     -1.93
                                     18307
                                     -1.93
                                     18309
                                     -1.95
                                     18312
                                     -1.96
                                     18315
                                     -1.98
                                     18317
                                     -1.99
                                     18320
                                      -2
                                     18322
                                     -2.02
                                     18325
                                     -2.03
                                     18327
                                     -2.05
                                     18330
                                     -2.06
                                     18332
                                     -2.08
                                     18411
                                     -2.08
                                     18414
                                     -2.07
                                     18416
                                     -2.07
                                     18419
                                     -2.06
                                     18424
                                     -2.06
                                     18427
                                     -2.05
                                     18432
                                     -2.05
                                     18434
                                     -2.04
                                     18437
                                     -2.04
                                     18439
                                     -2.03
                                     18442
                                     -2.02
                                     18445
                                     -2.02
                                     18447
                                     -2.01
                                     18450
                                     -2.01
                                     18452
                                      -2
                                     18455
                                     -1.99
                                     18457
                                     -1.99
                                     18460
                                     -1.98
                                     18463
                                     -1.98
                                     18465
                                     -1.97
                                     18468
                                     -1.96
                                     18470
                                     -1.96
                                     18473
                                     -1.95
                                     18475
                                     -1.94
                                     18478
                                     -1.94
                                     18480
                                     -1.93
                                     18483
                                     -1.93
                                     18486
                                     -1.92
                                     18591
                                     -1.92
                                     18593
                                     -1.91
                                     18596
                                     -1.91
                                     18598
                                     -1.9
                                     18603
                                     -1.9
                                     18606
                                     -1.89
                                     18609
                                     -1.89
                                     18611
                                     -1.88
                                     18724
                                     -1.88
                                     18727
                                     -1.89
                                     18737
                                     -1.89
                                     18739
                                     -1.9
                                     18768
                                     -1.9
                                     18770
                                     -1.89
                                     18775
                                     -1.89
                                     18778
                                     -1.88
                                     18783
                                     -1.88
                                     18786
                                     -1.87
                                     18791
                                     -1.87
                                     18793
                                     -1.86
                                     18801
                                     -1.86
                                     18804
                                     -1.85
                                     18809
                                     -1.85
                                     18811
                                     -1.84
                                     18816
                                     -1.84
                                     18819
                                     -1.83
                                     18845
                                     -1.83
                                     18847
                                     -1.78
                                     18850
                                     -1.72
                                     18852
                                     -1.67
                                     18855
                                     -1.61
                                     18858
                                     -1.55
                                     18860
                                     -1.5
                                     18863
                                     -1.44
                                     18865
                                     -1.39
                                     18868
                                     -1.33
                                     18870
                                     -1.28
                                     18978
                                     -1.28
                                     18980
                                     -1.17
                                     18983
                                     -1.05
                                     18985
                                      -1
                                     18988
                                     -0.94
                                     18991
                                     -0.89
                                     18993
                                     -0.83
                                     18996
                                     -0.78
                                     18998
                                     -0.72
                                     19001
                                     -0.72
                                     19003
                                     -0.64
                                     19006
                                     -0.49
                                     19008
                                     -0.41
                                     19011
                                     -0.33
                                     19013
                                     -0.25
                                     19016
                                     -0.18
                                     19019
                                     -0.1
                                     19021
                                     -0.02
                                     19024
                                     0.06
                                     19124
                                     0.06
                                     19127
                                     0.08
                                     19129
                                      0.1
                                     19132
                                     0.13
                                     19134
                                     0.15
                                     19137
                                     0.17
                                     19139
                                     0.19
                                     19142
                                     0.22
                                     19144
                                     0.24
                                     19146
                                     0.26
                                     19149
                                     0.28
                                     19198
                                     0.28
                                     19201
                                     0.29
                                     19203
                                     0.29
                                     19206
                                      0.3
                                     19211
                                      0.3
                                     19213
                                     0.31
                                     19218
                                     0.31
                                     19220
                                     0.32
                                     19267
                                     0.32
                                     19269
                                     0.33
                                     19345
                                     0.33
                                     19348
                                     0.32
                                     19357
                                     0.32
                                     19360
                                     0.31
                                     19372
                                     0.31
                                     19374
                                      0.3
                                     19384
                                      0.3
                                     19387
                                     0.29
                                     19423
                                     0.29
                                     19426
                                     0.28
                                     19473
                                     0.28
                                     19475
                                     0.29
                                     19492
                                     0.29
                                     19495
                                      0.3
                                     19615
                                      0.3
                                     19618
                                     0.31
                                     19620
                                     0.32
                                     19623
                                     0.33
                                     19625
                                     0.34
                                     19628
                                     0.35
                                     19630
                                     0.35
                                     19632
                                     0.36
                                     19635
                                     0.37
                                     19637
                                     0.38
                                     19640
                                     0.39
                                     19682
                                     0.39
                                     19684
                                      0.4
                                     19704
                                      0.4
                                     19706
                                     0.41
                                     19731
                                     0.41
                                     19733
                                     0.42
                                     19817
                                     0.42
                                     19819
                                     0.41
                                     19822
                                     0.41
                                     19824
                                      0.4
                                     19827
                                      0.4
                                     19829
                                     0.39
                                     19832
                                     0.39
                                     19834
                                     0.38
                                     19937
                                     0.38
                                     19940
                                     0.39
                                     19942
                                     0.39
                                     19945
                                      0.4
                                     19947
                                      0.4
                                     19949
                                     0.41
                                     19954
                                     0.41
                                     19957
                                     0.42
                                     20058
                                     0.42
                                     20060
                                     0.41
                                     20063
                                     0.39
                                     20065
                                     0.38
                                     20067
                                     0.37
                                     20070
                                     0.35
                                     20072
                                     0.34
                                     20075
                                     0.32
                                     20077
                                     0.31
                                     20080
                                      0.3
                                     20082
                                     0.28
                                     20156
                                     0.28
                                     20158
                                       0
                                     20193
                                       0


PART 1039 -- CONTROL OF EMISSIONS FROM NEW AND IN-USE NONROAD COMPRESSION-IGNITION ENGINES
1. The authority citation for part 1039 continues to read as follows: 
Authority: 42 U.S.C. 7401-7671q.

Subpart A -- Overview and Applicability

2. Section 1039.2 is revised to read as follows:
§1039.2  Who is responsible for compliance?
The regulations in this part 1039 contain provisions that affect both manufacturers and others. However, the requirements of this part are generally addressed to the manufacturer. The term "you" generally means the manufacturer, as defined in §1039.801, especially for issues related to certification. Note that for engines that become new after being placed into service (such as engines converted from highway or stationary use), the requirements that normally apply for manufacturers of freshly manufactured engines apply to the importer or any other entity we allow to obtain a certificate of conformity.

3. Section 1039.5 is amended by revising the introductory text and paragraph (e) and adding paragraph (a)(2)(iii) to read as follows:
§1039.5   Which engines are excluded from this part's requirements?
This part does not apply to certain nonroad engines, as follows:
(a)	*	*	*
(2)	*	*	* 
(iii) Locomotive engines produced under the provisions of 40 CFR 1033.625.
*	*	*	*	*
(e) Engines used in recreational vehicles. Engines certified to meet the requirements of 40 CFR part 1051 are not subject to the provisions of this part 1039.

4. Section 1039.30 is revised to read as follows:
§1039.30 Submission of information.
Send all reports and requests for approval to the Designated Compliance Officer (see §1039.801). See §1039.825 for additional reporting and recordkeeping provisions. 
			
Subpart B -- Emission Standards and Related Requirements

5. Section 1039.102 is amended by revising paragraph (e)(3) to read as follows:
§1039.102 What exhaust emission standards and phase-in allowances apply for my engines in model year 2014 and earlier?
*	*	*	*	*
(e)	*	*	*
(3) You may use NOx +NMHC emission credits to certify an engine family to the alternate NOx +NMHC standards in this paragraph (e)(3) instead of the otherwise applicable alternate NOx and NMHC standards.  Calculate the alternate NOx +NMHC standard by adding 0.1 g/kW-hr to the numerical value of the applicable alternate NOx standard of paragraph (e)(1) or (2) of this section.  Engines certified to the NOx +NMHC standards of this paragraph (e)(3) may not generate emission credits.  The FEL caps for engine families certified under this paragraph (e)(3) are the previously applicable NOx +NMHC standards of 40 CFR 89.112 (generally the Tier 3 standards).
*	*	*	*	*

6. Section 1039.104 is amended by adding paragraph (i) to read as follows:
§1039.104   Are there interim provisions that apply only for a limited time?
*	*	*	*	*
(i) Lead time for diagnostic controls.  Model year 2017 and earlier engines are not subject to the requirements for diagnostic controls specified in §1039.110. 
*	*	*	*	*

7. Section 1039.107 is amended by revising paragraph (b)(2) to read as follows:
§1039.107  What evaporative emission standards and requirements apply?
*	*	*	*	*
(b)	*	*	*
(2) Present test data to show that equipment using your engines meets the evaporative emission standards we specify in this section if you do not use design-based certification under 40 CFR 1048.245.  

8. A new § 1039.110 is added to subpart B to read as follows:
§1039.110   Recording reductant use and other diagnostic functions.
(a) Engines equipped with SCR systems using a reductant other than the engine's fuel must meet the following requirements:
   (1) The diagnostic system must monitor reductant quality and tank levels and alert operators to the need to refill the reductant tank before it is empty, or to replace the reductant if it does not meet your concentration specifications. Unless we approve other alerts, use a warning lamp or an audible alarm. You do not need to separately monitor reductant quality if you include an exhaust NOX sensor (or other sensor) that allows you to determine inadequate reductant quality. However, tank level must be monitored in all cases.
   (2) The onboard computer log must record in nonvolatile computer memory all incidents of engine operation with inadequate reductant injection or reductant quality. 
(b) You may equip your engine with other diagnostic features. If you do, they must be designed to allow us to read and interpret the codes. Note that § 1039.205 requires you to provide us any information needed to read, record, and interpret all the information broadcast by an engine's onboard computers and electronic control units.

9. Section 1039.120 is amended by revising paragraph (b) before the table to read as follows:
§1039.120  What emission-related warranty requirements apply to me?
*	*	*	*	*
(b) Warranty period. Your emission-related warranty must be valid for at least as long as the minimum warranty periods listed in this paragraph (b) in hours of operation and years, whichever comes first.  You may offer an emission-related warranty more generous than we require.  The emission-related warranty for the engine may not be shorter than any basic mechanical warranty you provide without charge for the engine.  Similarly, the emission-related warranty for any component may not be shorter than any warranty you provide without charge for that component.  This means that your warranty may not treat emission-related and nonemission-related defects differently for any component.  If an engine has no hour meter, we base the warranty periods in this paragraph (b) only on the engine's age (in years).  The warranty period begins when the engine is placed into service.  The minimum warranty periods are shown in the following table:
*	*	*	*	*

10. Section 1039.125 is amended by revising paragraphs (c) and (e) to read as follows:
§1039.125  What maintenance instructions must I give to buyers?
*	*	*	*	*
(c) Special maintenance. You may specify more frequent maintenance to address problems related to special situations, such as atypical engine operation.  You must clearly state that this additional maintenance is associated with the special situation you are addressing.  You may also address maintenance of low-use engines (such as recreational or stand-by engines) by specifying the maintenance interval in terms of calendar months or years in addition to your specifications in terms of engine operating hours.  All special maintenance instructions must be consistent with good engineering judgment.  We may disapprove your maintenance instructions if we determine that you have specified special maintenance steps to address engine operation that is not atypical, or that the maintenance is unlikely to occur in use.  If we determine that certain maintenance items do not qualify as special maintenance under this paragraph (c), you may identify this as recommended additional maintenance under paragraph (b) of this section.  We may disapprove your maintenance instructions if we determine that you have specified special maintenance steps to address engine operation that is not atypical, or that the maintenance is unlikely to occur in use.  If we determine that certain maintenance items do not qualify as special maintenance under this paragraph (c), you may identify this as recommended additional maintenance under paragraph (b) of this section.
*	*	*	*	*
(e) Maintenance that is not emission-related. For maintenance unrelated to emission controls, you may schedule any amount of inspection or maintenance.  You may also take these inspection or maintenance steps during service accumulation on your emission-data engines, as long as they are reasonable and technologically necessary.  This might include adding engine oil, changing air, fuel, or oil filters, servicing engine-cooling systems or fuel-water separator cartridges or elements, and adjusting idle speed, governor, engine bolt torque, valve lash, or injector lash.  You may not perform this nonemission-related maintenance on emission-data engines more often than the least frequent intervals that you recommend to the ultimate purchaser.
*	*	*	*	*

11. Section 1039.130 is amended by adding paragraph (b)(4) and revising paragraph (b)(5) to read as follows:
§1039.130   What installation instructions must I give to equipment manufacturers?
(a)	*	*	*
(4) Describe any necessary steps for installing the diagnostic system described in §1039.110.
(5) Describe how your certification is limited for any type of application.  For example, if your engines are certified only for constant-speed operation, tell equipment manufacturers not to install the engines in variable-speed applications.
*	*	*	*	*

12. Section 1039.135 is amended by revising paragraphs (c)(2) and (d) to read as follows:
§1039.135  How must I label and identify the engines I produce?
*	*	*	*	*
(c)	*	*	*
(2) Include your full corporate name and trademark.  You may identify another company and use its trademark instead of yours if you comply with the branding provisions of 40 CFR 1068.45.
*	*	*	*	*
(d) You may add information to the emission control information label as follows:
(1) If your emission control information label includes all the information described in paragraphs (c)(5) through (10) of this section, you may identify other emission standards that the engine meets or does not meet (such as international standards).  You may include this information by adding it to the statement we specify or by including a separate statement.  
(2) You may add other information to ensure that the engine will be properly maintained and used.
(3) You may add appropriate features to prevent counterfeit labels.  For example, you may include the engine's unique identification number on the label.
*	*	*	*	*

Subpart C -- Certifying Engine Families

13. Section 1039.201 is amended by revising paragraphs (a) and (g) to read as follows:
§1039.201  What are the general requirements for obtaining a certificate of conformity?
 (a) You must send us a separate application for a certificate of conformity for each engine family.  A certificate of conformity is valid for new production from the indicated effective date until the end of the model year for which it is issued, which may not extend beyond December 31 of that year.  No new certificate will be issued after December 31 of the model year.  You may amend your application for certification after the end of the model year in certain circumstances as described in §§ 1039.220 and 1039.225.  You must renew your certification annually for any engines you continue to produce.
*	*	*	*	*
(g) We may require you to deliver your test engines to a facility we designate for our testing (see §1039.235(c)).  Alternatively, you may choose to deliver another engine that is identical in all material respects to the test engine, or another engine that we determine can appropriately serve as an emission-data engine for the engine family.
*	*	*	*	*

14. Section 1039.205 is amended by revising paragraph (r)(1) and adding paragraph (bb) to read as follows:
§1039.205  What must I include in my application?
*	*	*	*	*
(r) 	*	*	*
   (1)  Report all valid test results involving measurement of pollutants for which emission standards apply.  Also indicate whether there are test results from invalid tests or from any other tests of the emission-data engine, whether or not they were conducted according to the test procedures of subpart F of this part.  We may require you to report these additional test results.  We may ask you to send other information to confirm that your tests were valid under the requirements of this part and 40 CFR part 1065.  
*	*	*	*	*
(bb) For imported engines or equipment, identify the following:
   (1) Describe your normal practice for importing engines. For example, this may include identifying the names and addresses of any agents you have authorized to import your engines.
   (2) For engines below 560 kW, identify a test facility in the United States where you can test your engines if we select them for testing under a selective enforcement audit, as specified in 40 CFR part 1068, subpart E.  

15. Section 1039.220 is amended by revising the section heading as to read as follows:
§1039.220  How do I amend my maintenance instructions?
*	*	*	*	*

16. Section 1039.225 is amended by revising the introductory text and adding paragraph (b)(4) to read as follows:
§1039.225  How do I amend my application for certification?
Before we issue you a certificate of conformity, you may amend your application to include new or modified engine configurations, subject to the provisions of this section. After we have issued your certificate of conformity, but before the end of the model year, you may send us an amended application requesting that we include new or modified engine configurations within the scope of the certificate, subject to the provisions of this section. Before the end of the model year, you must amend your application if any changes occur with respect to any information that is included or should be included in your application. After the end of the model year, you may amend your application only to update maintenance instructions as described in §1039.220 or to modify an FEL as described in paragraph (f) of this section.
*	*	*	*	*
(b)	*	*	*
   (4) Include any other information needed to make your application correct and complete.
*	*	*	*	*

17. Section 1039.230 is amended by adding paragraph (f) to read as follows:
§1039.230  How do I select engine families?
*	*	*	*	*
(f) You may certify dual-fuel or flexible-fuel engines in a single engine family.  

18. Section 1039.235 is amended by revising paragraphs (a) and (b) to read as follows:
§1039.235  What testing requirements apply for certification?
*	*	*	*	*
(a) Select an emission-data engine from each engine family for testing.  Select the engine configuration with the highest volume of fuel injected per cylinder per combustion cycle at the point of maximum torque -- unless good engineering judgment indicates that a different engine configuration is more likely to exceed (or have emissions nearer to) an applicable emission standard or FEL.  If two or more engines have the same fueling rate at maximum torque, select the one with the highest fueling rate at rated speed.  In making this selection, consider all factors expected to affect emission-control performance and compliance with the standards, including emission levels of all exhaust constituents, especially NOx and PM. 
(b) Test your emission-data engines using the procedures and equipment specified in subpart F of this part. In the case of dual-fuel engines, measure emissions when operating with each type of fuel for which you intend to certify the engine. In the case of flexible-fuel engines, measure emissions when operating with the fuel mixture that is most likely to cause the engine to exceed the applicable NOx (or NOx+NMHC) emission standard, though you may ask us to instead perform tests with both fuels separately if you can show that intermediate mixtures are not likely to occur in use.
*	*	*	*	*

19. Section 1039.225 is amended by revising paragraphs (c) and (d) and removing paragraph (e) to read as follows:
§1039.240  How do I demonstrate that my engine family complies with exhaust emission standards?
*	*	*	*	*
(c) To compare emission levels from the emission-data engine with the applicable emission standards, apply deterioration factors to the measured emission levels for each pollutant.  Section 1039.245 specifies how to test your engine to develop deterioration factors that represent the deterioration expected in emissions over your engines' full useful life.  Your deterioration factors must take into account any available data from in-use testing with similar engines.  Small-volume engine manufacturers may use assigned deterioration factors that we establish.  Apply deterioration factors as follows:
   (1) Additive deterioration factor for exhaust emissions. Except as specified in paragraph (c)(2) of this section, use an additive deterioration factor for exhaust emissions.  An additive deterioration factor is the difference between exhaust emissions at the end of the useful life and exhaust emissions at the low-hour test point.  In these cases, adjust the official emission results for each tested engine at the selected test point by adding the factor to the measured emissions.  If the factor is less than zero, use zero.  Additive deterioration factors must be specified to one more decimal place than the applicable standard. 
   (2) Multiplicative deterioration factor for exhaust emissions. Use a multiplicative deterioration factor if good engineering judgment calls for the deterioration factor for a pollutant to be the ratio of exhaust emissions at the end of the useful life to exhaust emissions at the low-hour test point.  For example, if you use aftertreatment technology that controls emissions of a pollutant proportionally to engine-out emissions, it is often appropriate to use a multiplicative deterioration factor.  Adjust the official emission results for each tested engine at the selected test point by multiplying the measured emissions by the deterioration factor.  If the factor is less than one, use one.  A multiplicative deterioration factor may not be appropriate in cases where testing variability is significantly greater than engine-to-engine variability.  Multiplicative deterioration factors must be specified to one more significant figure than the applicable standard. 
   (3) Sawtooth deterioration patterns. The deterioration factors described in paragraphs (c)(1) and (2) of this section assume that the highest useful life emissions occur either at the end of useful life or at the low-hour test point. The provisions of this paragraph (c)(3) apply where good engineering judgment indicates that the highest emissions over the useful life will occur between these two points. For example, emissions may increase with service accumulation until a certain maintenance step is performed, then return to the low-hour emission levels and begin increasing again. Base deterioration factors for engines with such emission patterns on the difference between (or ratio of) the point at which the highest emissions occur and the low-hour test point. Note that this applies for maintenance-related deterioration only where we allow such critical emission-related maintenance.
   (4) Deterioration factor for smoke. Deterioration factors for smoke are always additive, as described in paragraph (c)(1) of this section.
   (5) Deterioration factor for crankcase emissions. If your engine vents crankcase emissions to the exhaust or to the atmosphere, you must account for crankcase emission deterioration, using good engineering judgment.  You may use separate deterioration factors for crankcase emissions of each pollutant (either multiplicative or additive) or include the effects in combined deterioration factors that include exhaust and crankcase emissions together for each pollutant.
   (6) Dual-fuel engines.  In the case of dual-fuel engines, apply deterioration factors separately for each fuel type.
(d) Calculate emission data using measurements to at least one more decimal place than the applicable standard.  Apply the deterioration factor to the official emission result, as described in paragraph (c) of this section, then round the adjusted figure to the same number of decimal places as the emission standard.  Compare the rounded emission levels to the emission standard for each emission-data engine.  In the case of NOx+NMHC standards, apply the deterioration factor to each pollutant and then add the results before rounding.


20. Section 1039.245 is amended by revising paragraph (c) to read as follows:
§1039.245  How do I determine deterioration factors from exhaust durability testing?
*	*	*	*	*
(c) If you are unable to determine deterioration factors for an engine family under paragraph (a) or (b) of this section, select engines, subsystems, or components for testing.  Determine deterioration factors based on service accumulation and related testing to represent the deterioration expected from in-use engines over the full useful life as follows: 
(1) You must measure emissions from the emission-data engine at least three times with evenly spaced intervals of service accumulation.  You may use extrapolation to determine deterioration factors once you have established a trend of changing emissions with age for each pollutant.  You may use an engine installed in nonroad equipment to accumulate service hours instead of running the engine only in the laboratory.  You may perform maintenance on emission-data engines as described in §1039.125 and 40 CFR part 1065, subpart E. 
(2) In the case of dual-fuel or flexible-fuel engines, you may accumulate service hours on a single emission-data engine using the type or mixture of fuel expected to have the highest combustion and exhaust temperatures. For dual-fuel engines, you must develop separate deterioration factors for each fuel type by measuring emissions with each fuel type at each test point. 
(3) Use good engineering judgment for all aspects of the effort to establish deterioration factors under this paragraph (c).
*	*	*	*	*

21. Section 1039.250 is amended by revising paragraphs (b)(3)(iv) and (c) to read as follows:
§1039.250  What records must I keep and what reports must I send to EPA?
*	*	*	*	*
(b)	*	*	*
(3)	*	*	*
(iv) All your emission tests,  including the date and purpose of each test and documentation of test parameters as specified in part 40 CFR part 1065.
*	*	*	*	*
(c) Keep required data from emission tests and all other information specified in this section for eight years after we issue your certificate. If you use the same emission data or other information for a later model year, the eight-year period restarts with each year that you continue to rely on the information.
*	*	*	*	*

22. Section 1039.255 is amended by revising paragraphs (c)(2), (c)(4), (d), and (e) to read as follows:
§1039.255   What decisions may EPA make regarding my certificate of conformity?
*	*	*	*	*
(c)	*	*	*
(2) Submit false or incomplete information (paragraph (e) of this section applies if this is fraudulent). This includes doing anything after submission of your application to render any of the submitted information false or incomplete.
*	*	*	*	*
(4) Deny us from completing authorized activities (see 40 CFR 1068.20). This includes a failure to provide reasonable assistance.
*	*	*	*	*
(d) We may void the certificate of conformity for an engine family if you fail to keep records, send reports, or give us information as required under this part or the Act. Note that these are also violations of 40 CFR 1068.101(a)(2).
(e) We may void your certificate if we find that you intentionally submitted false or incomplete information. This includes rendering submitted information false or incomplete after submission.
*	*	*	*	*

Subpart F -- Test Procedures

23.   Section 1039.501 is amended by revising paragraphs (e), (f), and (g) and adding paragraph (h) to read as follows:
§1039.501   How do I run a valid emission test?
*	*	*	*	*
(e) The following provisions apply for engines using aftertreatment technology with infrequent regeneration events that may occur during testing:
   (1) Adjust measured emissions to account for aftertreatment technology with infrequent regeneration as described in §1039.525.
   (2) If your engine family includes engines with one or more AECDs for emergency operation approved under §1039.115(g)(4) and §1039.665, do not consider additional regenerations resulting from those AECDs when developing adjustments to measured values under this paragraph (e).  
   (3) Invalidate a smoke test if active regeneration starts to occur during the test.
(f) You may disable any AECDs that have been approved solely for emergency equipment applications under §1039.115(g)(4).  Note that the emission standards do not apply when any of these AECDs are active. 
(g) You may use special or alternate procedures to the extent we allow them under 40 CFR 1065.10.
(h) This subpart is addressed to you as a manufacturer, but it applies equally to anyone who does testing for you, and to us when we perform testing to determine if your engines meet emission standards. 

24. Section 1039.505 is amended by revising paragraph (b)(2) to read as follows:
§1039.505  How do I test engines using steady-state duty cycles, including ramped-modal testing? 
*	*	*	*	*
(b)	*	*	*
(2) Use the 6-mode duty cycle or the corresponding ramped-modal cycle described in paragraph (b) of Appendix II of this part for variable-speed engines below 19 kW. You may instead use the 8-mode duty cycle or the corresponding ramped-modal cycle described in paragraph (c) of Appendix II of this part if some engines from your engine family will be used in applications that do not involve governing to maintain engine operation around rated speed.
*	*	*	*	*

25. Section 1039.515 is amended by revising paragraph (a) to read as follows:
§1039.515  What are the test procedures related to not-to-exceed standards?
(a) General provisions.  The provisions in 40 CFR 86.1370 apply for determining whether an engine meets the not-to-exceed emission standards in § 1039.101(e), except as noted in this section.  Interpret references to vehicles and vehicle operation to mean equipment and equipment operation.
*	*	*	*	*

26. Section 1039.525 is revised to read as follows:
§1039.525   How do I adjust emission levels to account for infrequently regenerating aftertreatment devices?
For engines using aftertreatment technology with infrequent regeneration events that may occur during testing, take one of the following approaches to account for the emission impact of regeneration:
(a) You may use the calculation methodology described in 40 CFR 1065.680 to adjust measured emission results.  Do this by developing an upward adjustment factor and a downward adjustment factor for each pollutant based on measured emission data and observed regeneration frequency as follows:
   (1) Adjustment factors should generally apply to an entire engine family, but you may develop separate adjustment factors for different configurations within an engine family.  Use the adjustment factors from this section for all testing for the engine family. 
   (2) You may use carryover or carry-across data to establish adjustment factors for an engine family as described in the §1039.235, consistent with good engineering judgment. 
   (3) Determine the frequency of regeneration, F, as described in 40 CFR 1065.680 from in-use operating data or from running repetitive tests in a laboratory.  For any replicate transient testing in the laboratory include cold-start operation in proportion to the weighting factors specified in §1039.510(b) from testing or you may determine its effect analytically using good engineering judgment.  If the engine is designed for regeneration at fixed time intervals, you may apply good engineering judgment to determine F based on those design parameters.  All adjustment factors for regeneration are additive.  For engines that are required to certify to both transient and steady-state duty cycles, calculate an adjustment factor using a composite value of F that combines steady-state and transient operation.  Establish a composite value of F applying for both steady-state and transient testing based on an equal weighting for each type of testing.
   (4) Adjust measured emission results from transient testing using one of the following methods:
      (i) Treat cold-start testing and hot-start testing together as a single test segment as described in §1039.510(b) for adjusting measured emission results under this paragraph (a).  Apply the adjustment factor to the composite emission result.
      (ii) You may alternatively apply the adjustment factor only to the hot-start test result if your aftertreatment technology does not regenerate during cold operation, including the cold-start NRTC.  If we ask for it, you must demonstrate this by engineering analysis or by test data.
(b) You may ask us to approve an alternate methodology to account for regeneration events.  We will generally limit approval to cases where your engines use aftertreatment technology with extremely infrequent regeneration and you are unable to apply the provisions of this section.
(c) You may choose to make no adjustments to measured emission results if you determine that regeneration does not significantly affect emission levels for an engine family (or configuration) or if it is not practical to identify when regeneration occurs. If you choose not to make adjustments under paragraph (a) or (b) of this section, your engines must meet emission standards for all testing, without regard to regeneration.


Subpart G -- Special Compliance Provisions

27. Section 1039.601 is revised to read as follows:
§1039.601  What compliance provisions apply?
(a) Engine and equipment manufacturers, as well as owners, operators, and rebuilders of engines subject to the requirements of this part, and all other persons, must observe the provisions of this part, the requirements and prohibitions in 40 CFR part 1068, and the provisions of the Act.
(b) Subpart C of this part describes how to test and certify dual-fuel and flexible-fuel engines. Some multi-fuel engines may not fit either of those defined terms.  For such engines, we will determine whether it is most appropriate to treat them as single-fuel engines, dual-fuel engines, or flexible-fuel engines based on the range of possible and expected fuel mixtures.  For example, an engine might burn natural gas but initiate combustion with a pilot injection of diesel fuel.  If the engine is designed to operate with a single fueling algorithm (i.e., fueling rates are fixed at a given engine speed and load condition), we would generally treat it as a single-fuel engine,  In this context, the combination of diesel fuel and natural gas would be its own fuel type.  If the engine is designed to also operate on diesel fuel alone, we would generally treat it as a dual-fueled engine.  If the engine is designed to operate on varying mixtures of the two fuels, we would generally treat it as a flexible-fueled engine. To the extent that requirements vary for the different fuels or fuel mixtures, we may apply the more stringent requirements.

28. Section 1039.605 is amended by revising paragraphs (b), (d)(5), and (d)(8) to read as follows:
§1039.605  What provisions apply to engines certified under the motor-vehicle program?
*	*	*	*	*
(b) Equipment-manufacturer provisions. If you are not an engine manufacturer, you may install motor-vehi	cle engines certified for the appropriate model year under 40 CFR part 86 in nonroad equipment as long as you meet all the requirements and conditions specified in paragraph (d) of this section.   You must also add the fuel-inlet label we specify in §1039.135(e).  If you modify the motor-vehicle engine in any of the ways described in paragraph (d)(2) of this section, we will consider you a manufacturer of a new nonroad engine.  Such engine modifications prevent you from using the provisions of this section.
*	*	*	*	*
(d)	*	*	*
   (5) You must add a permanent supplemental label to the engine in a position where it will remain clearly visible after installation in the equipment.  In the supplemental label, do the following:
      (i) Include the heading: "NONROAD ENGINE EMISSION CONTROL INFORMATION".
      (ii) Include your full corporate name and trademark.  You may identify another company and use its trademark instead of yours if you comply with the branding provisions of 40 CFR 1068.45.
      (iii) State: "THIS ENGINE WAS ADAPTED FOR NONROAD USE WITHOUT AFFECTING ITS EMISSION CONTROLS.  THE EMISSION-CONTROL SYSTEM DEPENDS ON THE USE OF FUEL MEETING SPECIFICATIONS THAT APPLY FOR MOTOR-VEHICLE APPLICATIONS.  OPERATING THE ENGINE ON OTHER FUELS MAY BE A VIOLATION OF FEDERAL LAW.".
      (iv) State the date you finished modifying the engine (month and year), if applicable.
   *	*	*	*	*
   (8) Send the Designated Compliance Officer written notification describing your plans before using the provisions of this section.  In addition, by February 28 of each calendar year (or less often if we tell you), send the Designated Compliance Oficer a signed letter with all the following information:
   	(i) Identify your full corporate name, address, and telephone number.
      (ii) List the engine or equipment models for which you used this exemption in the previous year and describe your basis for meeting the sales restrictions of paragraph (d)(3) of this section.
      (iii) State: "We prepared each listed [engine or equipment] model for nonroad application without making any changes that could increase its certified emission levels, as described in 40 CFR 1039.605."
*	*	*	*	*

29. Section 1039.610 is amended by revising paragraphs (d)(5)(ii) and (d)(7) to read as follows:
§1039.610  What provisions apply to vehicles certified under the motor-vehicle program?
*	*	*	*	*
(d)	*	*	*
   (5)	*	*	*
      (ii) Include your full corporate name and trademark.  You may identify another company and use its trademark instead of yours if you comply with the branding provisions of 40 CFR 1068.45.
   *	*	*	*	*
   (7) Send the Designated Compliance Officer written notification describing your plans before using the provisions of this section.  In addition, by February 28 of each calendar year (or less often if we tell you), send the Designated Compliance Officer a signed letter with all the following information:
		(i) Identify your full corporate name, address, and telephone number.
      (ii) List the equipment models for which you used this exemption in the previous year and describe your basis for meeting the sales restrictions of paragraph (d)(3) of this section.
      (iii) State: "We prepared each listed engine or equipment model for nonroad application without making any changes that could increase its certified emission levels, as described in 40 CFR 1039.610."
*	*	*	*	*

Remove 1039.640 -- [Removed]
30. Section 1039.640 is removed.

Subpart H -- Averaging, Banking, and Trading for Certification

31. Section 1039.701 is amended by adding paragraph (h) to read as follows:
§1039.701  General provisions.
*	*	*	*	*
(h) You may use either of the following approaches to retire or forego emission credits:
   (1) You may trade emission credits generated from any number of your vehicles to the vehicle purchasers or other parties to retire the credits.  Identify any such credits in the reports described in §1039.730.  Vehicles must comply with the applicable FELs even if you donate or sell the corresponding emission credits under this paragraph (e).  Those credits may no longer be used by anyone to demonstrate compliance with any EPA emission standards.
(2) You may certify a family using an FEL below the emission standard as described in this part and choose not to generate emission credits for that family.  If you do this, you do not need to calculate emission credits for those families and you do not need to submit or keep the associated records described in this subpart for that family.

32.   Section 1039.705 is amended by revising paragraphs (b), (c) introductory text, and (c)(1) to read as follows:
§1039.705  How do I generate and calculate emission credits?
*	*	*	*	*
(b) For each participating family, calculate positive or negative emission credits relative to the otherwise applicable emission standard.  Calculate positive emission credits for a family that has an FEL below the standard.  Calculate negative emission credits for a family that has an FEL above the standard.  Sum your positive and negative credits for the model year before rounding.  Round the sum of emission credits to the nearest kilogram (kg), using consistent units throughout the following equation:

Emission credits (kg) = (Std - FEL)  (Volume)  (AvgPR)  (UL)  (10[-3])

Where: 
   Std = the emission standard, in grams per kilowatt-hour, that applies under subpart B of this part for engines not participating in the ABT program of this subpart (the "otherwise applicable standard").
      FEL = the family emission limit for the engine family, in grams per kilowatt-hour.
      Volume = the number of engines eligible to participate in the averaging, banking, and trading program within the given engine family during the model year, as described in paragraph (c) of this section.
      AvgPR = the average of maximum engine power values of all the engine configurations within an engine family, calculated on a sales-weighted basis, in kilowatts.
UL = the useful life for the given engine family, in hours. 
(c) As described in §1039.730, compliance with the requirements of this subpart is determined at the end of the model year based on actual U.S.-directed production volumes. Do not include any of the following engines to calculate emission credits:
(1) Engines with a permanent exemption under subpart G of this part or under 40 CFR part 1068.
*	*	*	*	*

33. Section 1039.710 is amended by revising paragraph (c) to read as follows:
§1039.710 How do I average emission credits?
*	*	*	*	*
(c) If you certify an engine family to an FEL that exceeds the otherwise applicable standard, you must obtain enough emission credits to offset the engine family's deficit by the due date for the final report required in §1039.730.  The emission credits used to address the deficit may come from your other engine families that generate emission credits in the same model year, from emission credits you have banked from previous model years, or from emission credits generated in the same or previous model years that you obtained through trading.

34. Section 1039.720 is amended by revising paragraph (a) to read as follows:
§1039.720   How do I trade emission credits?
(a) Trading is the exchange of emission credits between manufacturers, or the transfer of credits to another party to retire them. You may use traded emission credits for averaging, banking, or further trading transactions. Traded emission credits may be used only within the averaging set in which they were generated.
*	*	*	*	*

35. Section 1039.725 is amended by revising paragraph (b)(2) to read as follows:
§1039.725  What must I include in my application for certification?
*	*	*	*	*
(b)	*	*	*
(2) Detailed calculations of projected emission credits (positive or negative) based on projected production volumes.  We may require you to include similar calculations from your other engine families to demonstrate that you will be able to avoid negative credit balances for the model year.  If you project negative emission credits for a family, state the source of positive emission credits you expect to use to offset the negative emission credits.

36. Section 1039.730 is amended by revising paragraphs (b)(1), (b)(4), and (c)(2) to read as follows:
§1039.730  What ABT reports must I send to EPA?
*	*	*	*	*
(b)	*	*	*
(1) Engine-family designation and averaging set.
*	*	*	*	*
(4) The projected and actual U.S.-directed production volumes for the model year. If you changed an FEL during the model year, identify the actual U.S.-directed production volume associated with each FEL.
*	*	*	*	*
(c)	*	*	*
(2) State whether you will retain any emission credits for banking. If you choose to retire emission credits that would otherwise be eligible for banking, identify the engine families that generated the emission credits, including the number of emission credits from each family.
*	*	*	*	*

37. Section 1039.735 is amended by revising paragraphs (a) and (b) to read as follows:
§1039.735  What records must I keep?
(a) You must organize and maintain your records as described in this section.  
(b) Keep the records required by this section for at least eight years after the due date for the end-of-year report.  You may not use emission credits for any engines if you do not keep all the records required under this section.  You must therefore keep these records to continue to bank valid credits.  
*	*	*	*	*

38. Section 1039.740 is amended by revising paragraph (a) to read as follows:
§1039.740  What restrictions apply for using emission credits?
*	*	*	*	*
(a) Averaging sets. Emission credits may be exchanged only within an averaging set.  For emission credits generated by Tier 4 engines, there are two averaging sets -- one for engines at or below 560 kW and another for engines above 560 kW. 
*	*	*	*	*

Subpart I -- Definitions and Other Reference Information

39. Section 1039.801 is amended as follows:
a. By revising the definition of "Designated Compliance Officer".
b. By removing the definition for "Designated Enforcement Officer".
c. By adding definitions for "Dual-fuel" and "Flexible-fuel"
d. By revising paragraph (1)(i) of the definition of "Model year" and the definition of "Placed into service".
e. By removing the definition for "Point of first retail sale"
§1039.801 -- What definitions apply to this part?
*	*	*	*	*
	Designated Compliance Officer means the Director, Diesel Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov. 
*	*	*	*	*
	Dual-fuel means relating to an engine designed for operation on two different fuels but not on a continuous mixture of those fuels.  For purposes of this part, such an engine remains a dual-fuel engine even if it is designed for operation on three or more different fuels. 
*	*	*	*	*
Flexible-fuel means relating to an engine designed for operation on any mixture of two or more different fuels.
*	*	*	*	*
	Model year means one of the following things:
(1)	*	*	*
(i) Calendar year of production.
*	*	*	*	*

*	*	*	*	*
	Placed into service means put into initial use for its intended purpose.  Engines and equipment do not qualify as being "placed into service" based on incidental use by a manufacturer or dealer.
*	*	*	*	*

40. Section 1039.815 is revised to read as follows:
§1039.815  What provisions apply to confidential information?
The provisions of 40 CFR 1068.10 apply for information you consider confidential. 

41. Section 1039.825 is revised to read as follows:
§1039.825  What reporting and recordkeeping requirements apply under this part?
(a) This part includes various requirements to submit and record data or other information. Unless we specify otherwise, store required records in any format and on any media and keep them readily available for eight years after you send an associated application for certification, or eight years after you generate the data if they do not support an application for certification.  You are expected to keep your own copy of required records rather than relying on someone else to keep records on your behalf.  We may review these records at any time.  You must promptly send us organized, written records in English if we ask for them.  We may require you to submit written records in an electronic format.  
(b) The regulations in §1039.255, 40 CFR 1068.25, and 40 CFR 1068.101 describe your obligation to report truthful and complete information.  This includes information not related to certification. Failing to properly report information and keep the records we specify violates 40 CFR 1068.101(a)(2), which may involve civil or criminal penalties.
(c) Send all reports and requests for approval to the Designated Compliance Officer (see §1039.801).
(d) Any written information we require you to send to or receive from another company is deemed to be a required record under this section.  Such records are also deemed to be submissions to EPA.  We may require you to send us these records whether or not you are a certificate holder.
(e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq), the Office of Management and Budget approves the reporting and recordkeeping specified in the applicable regulations.  The following items illustrate the kind of reporting and recordkeeping we require for engines and equipment regulated under this part:
(1) We specify the following requirements related to engine certification in this part 1039:
   (i) In §1039.20 we require engine manufacturers to label stationary engines that do not meet the standards in this part.
   (ii) In §1039.135 we require engine manufacturers to keep certain records related to duplicate labels sent to equipment manufacturers.
   (iii) [Reserved]
   (iv) In subpart C of this part we identify a wide range of information required to certify engines.
   (v) [Reserved]
   (vi) [Reserved]
   (vii) In subpart G of this part we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various special compliance provisions. For example, equipment manufacturers must submit reports and keep records related to the flexibility provisions in §1039.625.
   (viii) In §1039.725, 1039.730, and 1039.735 we specify certain records related to averaging, banking, and trading.
(2) We specify the following requirements related to testing in 40 CFR part 1065:
   (i) In 40 CFR 1065.2 we give an overview of principles for reporting information.
   (ii) In 40 CFR 1065.10 and 1065.12 we specify information needs for establishing various changes to published test procedures.
   (iii) In 40 CFR 1065.25 we establish basic guidelines for storing test information.
   (iv) In 40 CFR 1065.695 we identify the specific information and data items to record when measuring emissions.
(3) We specify the following requirements related to the general compliance provisions in 40 CFR part 1068:
   (i) In 40 CFR 1068.5 we establish a process for evaluating good engineering judgment related to testing and certification.
   (ii) In 40 CFR 1068.25 we describe general provisions related to sending and keeping information.
   (iii) In 40 CFR 1068.27 we require manufacturers to make engines available for our testing or inspection if we make such a request.
   (iv) In 40 CFR 1068.105 we require equipment manufacturers to keep certain records related to duplicate labels from engine manufacturers.
   (v) In 40 CFR 1068.120 we specify recordkeeping related to rebuilding engines.
   (vi) In 40 CFR part 1068, subpart C, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various exemptions.
   (vii) In 40 CFR part 1068, subpart D, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to importing engines.
   (viii) In 40 CFR 1068.450 and 1068.455 we specify certain records related to testing production-line engines in a selective enforcement audit.
   (ix) In 40 CFR 1068.501 we specify certain records related to investigating and reporting emission-related defects.
   (x) In 40 CFR 1068.525 and 1068.530 we specify certain records related to recalling nonconforming engines.  

Part 1042 --  CONTROL OF EMISSIONS FROM NEW AND IN-USE MARINE COMPRESSION-IGNITION ENGINES AND VESSELS
42. The authority citation for part 1042 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.

Subpart A -- Overview and Applicability



43. Section 1042.1 is amended by revising paragraphs (a) and (c) introductory text to read as follows:
§1042.1  Applicability.
*	*	*	*	*
(a) The emission standards of this part 1042 for freshly manufactured engines apply for new marine engines starting with the model years noted in the following tables:

         Table 1 to §1042.1 --  Part 1042 Applicability by Model Year
                                Engine Category
                           Maximum Engine Power[a] 
                      Displacement (L/cyl) or Application
                                  Model Year
                                       
                                       
                                       
                                       
                                  Category 1
                                   kW <75
                                 disp.< 0.9
                                    2009[b]
                                       
                             75 < kW < 3700
                                 disp.< 0.9
                                     2012
                                       

                            0.9 < disp. < 1.2
                                     2013


                          1.2   < disp. < 2.5
                                     2014


                            2.5 < disp. < 3.5
                                     2013


                            3.5 < disp.< 7.0
                                     2012

                                 kW >  3700
                                      All
                                     2014
                                       
                                  Category 2
                                 kW < 3700
                           7.0 < disp. < 15.0
                                     2013
                                       
                                 kW > 3700
                           7.0 < disp. < 15.0
                                     2014
                                       
                                      All
                             15 < disp. < 30
                                     2014
                                  Category 3
                                      All
                                 disp. > 30
                                     2011
[b]See §1042.140, which describes how to determine maximum engine power.
[b]See Table 1 of §1042.101 for the first model year in which this part 1042 applies for engines with maximum engine power below 75 kW and displacement at or above 0.9 L/cyl.
   
   *	*	*	*	*
(c) Freshly manufactured engines with maximum engine power at or above 37 kW and originally manufactured and certified before the model years identified in Table 1 to this section are subject to emission standards and requirements of 40 CFR part 94.  The provisions of this part 1042 do not apply for such engines certified under 40 CFR part 94, except as follows beginning June 29, 2010:
*	*	*	*	*

44. Section 1042.2 is revised to read as follows:
§1042.2  Who is responsible for compliance?
The regulations in this part 1042 contain provisions that affect both engine manufacturers and others. However, the requirements of this part, other than those of subpart I of this part, are generally addressed to the engine manufacturer for freshly manufactured marine engines or other certificate holders. The term "you" generally means the engine manufacturer, as defined in §1042.901, especially for issues related to certification (including production-line testing, reporting, etc.).  Note that for engines that become new after being placed into service (such as engines converted from highway or stationary use, or engines installed on vessels that are reflagged to become U.S. vessels), the requirements that normally apply for manufacturers of freshly manufactured engines apply to the importer or any other entity we allow to obtain a certificate of conformity.

45. Section 1042.30 is revised to read as follows:
§1042.30 Submission of information.
Send all reports and requests for approval to the Designated Compliance Officer (see §1042.901). See §1042.925 for additional reporting and recordkeeping provisions. 
Subpart B -- 
Emission Standards and Related Requirements

46. Section 1042.101 is amended by revising the section heading and paragraphs (a), (b), and (c) to read as follows:
§1042.101  Exhaust emission standards for Category 1 and Category 2 engines.
(a) Duty-cycle standards.  Exhaust emissions from your engines may not exceed emission standards, as follows:
   (1) Measure emissions using the test procedures described in subpart F of this part.
   (2) The following CO emission standards in this paragraph (a)(2) apply starting with the applicable model year identified in §1042.1:
		(i) 8.0 g/kW-hr for engines below 8 kW.
		(ii) 6.6 g/kW-hr for engines at or above 8 kW and below 19 kW.
		(iii) 5.5 g/kW-hr for engines at or above 19 kW and below 37 kW.
		(iv) 5.0 g/kW-hr for engines at or above 37 kW.
   (3) Except as described in paragraphs (a)(4) and (5) of this section, the Tier 3 standards for PM and NOx+HC emissions are described in the following tables:

Table 1 to §1042.101 --  Tier 3 Standards for Category 1 Engines Below 3700 kW[a]
                                    Power 
                            Density and Application
                                 Displacement 
                                    (L/cyl)
                                   Maximum 
                                 Engine Power
                                  Model Year
                                      PM
                                   (g/kW-hr)
                                    NOx+HC
                                 (g/kW-hr)[b]
                                       
                                      all
                                       
                                 disp.< 0.9
                                   kW <19
                                     2009+
                                     0.40
                                      7.5
                                       
                                       
                              19 < kW < 75
                                   2009-2013
                                     0.30
                                      7.5



                                     2014+
                                    0.30[c]
                                    4.7[c]
                     Commercial engines with kW/L < 35
                                       
                                 disp.< 0.9
                                  kW > 75
                                     2012+
                                     0.14
                                      5.4
                                       
                            0.9 < disp. < 1.2
                                      all
                                     2013+
                                     0.12
                                      5.4
                                       
                          1.2   < disp. < 2.5
                                  kW < 600
                                   2014-2017
                                     0.11
                                      5.6

                                       
                                       
                                     2018+
                                     0.10
                                      5.6

                                       
                                  kW > 600
                                     2014+
                                     0.11
                                      5.6
                                       
                            2.5 < disp. < 3.5
                                  kW < 600
                                   2013-2017
                                     0.11
                                      5.6

                                       
                                       
                                     2018+
                                     0.10
                                      5.6

                                       
                                  kW > 600
                                     2013+
                                     0.11
                                      5.6
                                       
                            3.5 < disp.< 7.0
                                  kW < 600
                                   2012-2017
                                     0.11
                                      5.8

                                       
                                       
                                     2018+
                                     0.10
                                      5.8
                                       
                                       
                                  kW > 600
                                     2012+
                                     0.11
                                      5.8
 Commercial engines with kW/L > 35, and all recreational engines > 75 kW
                                disp. < 0.9
                                  kW > 75
                                     2012+
                                     0.15
                                      5.8

                            0.9 < disp. < 1.2
                                      all
                                     2013+
                                     0.14
                                      5.8

                            1.2 < disp. < 2.5
                                       
                                     2014+
                                     0.12
                                      5.8

                            2.5 < disp. < 3.5
                                       
                                     2013+
                                     0.12
                                      5.8

                            3.5 < disp. < 7.0
                                       
                                     2012+
                                     0.11
                                      5.8
[a] No Tier 3 standards apply for commercial Category 1 engines at or above 3700 kW.  See §1042.1(c) and paragraph (a)(7) of this section for the standards that apply for these engines.
[b] The applicable NOx+HC standards specified for Tier 2 engines in Appendix I of this part continue to apply instead of the values noted in the table for commercial engines at or above 2000 kW.  FELs for these engines may not be higher than the Tier 1 NOx standard specified in Appendix I of this part.
[c] See paragraph (a)(4) of this section for alternative PM and NOx+HC standards for engines at or above 19 kW and below 75 kW with displacement below 0.9 L/cyl.

Table 2 to §1042.101 --  Tier 3 Standards for Category 2 Engines Below 3700 kW[a]
                                 Displacement 
                                    (L/cyl)
                             Maximum engine power
                                  Model year
                                      PM
                                   (g/kW-hr)
                                    NOx+HC
                                   (g/kW-hr)
                           7.0 < disp. < 15.0
                                 kW < 2000
                                     2013+
                                     0.14
                                      6.2
                                       
                            2000 < kW < 3700
                                     2013+
                                     0.14
                                    7.8[b]
                         15.0 < disp. < 20.0[c]
                                 kW < 2000
                                     2014+
                                     0.34
                                      7.0
                          20.0 < disp. < 25.0 c
                                 kW  < 2000
                                     2014+
                                     0.27
                                      9.8
                          25.0 < disp. < 30.0 c
                                 kW  < 2000
                                     2014+
                                     0.27
                                     11.0
   [a] The Tier 3 standards in this table do not apply for Category 2 engines at or above 2000 kW with per-cylinder displacement at or above 15.0 liters, or for any Category 2 engines at or above 3700 kW.  See §1042.1(c) and paragraphs (a)(6) through (8) of this section for the standards that apply for these engines.
   [b] For engines subject to the 7.8 g/kW-hr NOx+HC standard, FELs may not be higher than the Tier 1 NOx standards specified in Appendix I of this part. 
   [c] There are no Tier 3 standards for Category 2 engines with per-cylinder displacement at or above 15 and 20 liters with maximum engine power at or above 2000 kW.  See paragraphs (a)(6) and (7) of this section for the Tier 4 standards that apply for these engines starting with the 2014 model year.
                                       
   (4) For Tier 3 engines at or above 19 kW and below 75 kW with displacement below 0.9 L/cyl, you may alternatively certify some or all of your engine families to a PM emission standard of 0.20 g/kW-hr and a NOx+HC emission standard of 5.8 g/kW-hr for 2014 and later model years.
   (5) Starting with the 2014 model year, recreational marine engines at or above 3700 kW (with any displacement) must be certified under this part 1042 to the Tier 3 standards specified in this section for 3.5 to 7.0 L/cyl recreational marine engines.
   (6) Interim Tier 4 PM standards apply for 2014 and 2015 model year engines between 2000 and 3700 kW as specified in this paragraph (a)(6). These engines are considered to be Tier 4 engines.
      (i) For Category 1 engines, the Tier 3 PM standards from Table 1 to this section continue to apply. PM FELs for these engines may not be higher than the applicable Tier 2 PM standards specified in Appendix I of this part.
      (ii) For Category 2 engines with per-cylinder displacement below 15.0 liters, the Tier 3 PM standards from Table 2 to this section continue to apply. PM FELs for these engines may not be higher than 0.27 g/kW-hr.
      (iii) For Category 2 engines with per-cylinder displacement at or above 15.0 liters, the PM standard is 0.34 g/kW-hr for engines at or above 2000 kW and below 3300 kW, and 0.27 g/kW-hr for engines at or above 3300 kW and below 3700 kW. PM FELs for these engines may not be higher than 0.50 g/kW-hr.
   (7) Except as described in paragraph (a)(8) of this section, the Tier 4 standards for PM, NOx, and HC emissions are described in the following table:

                           Table 3 to §1042.101 --  
Tier 4 Standards for Category 2 and Commercial Category 1 Engines at or Above 600 kW
                             Maximum engine power
                                 Displacement 
                                    (L/cyl)
                                  Model year
                                      PM
                                   (g/kW-hr)
                                      NOx
                                   (g/kW-hr)
                                      HC
                                   (g/kW-hr)
                             600 < kW < 1400
                                      all
                                     2017+
                                     0.04
                                      1.8
                                     0.19
                            1400 < kW < 2000
                                      all
                                     2016+
                                     0.04
                                      1.8
                                     0.19
                           2000 < kW < 3700[a]
                                      all
                                     2014+
                                     0.04
                                      1.8
                                     0.19
                                 kW > 3700
                                disp. <15.0
                                   2014-2015
                                     0.12
                                      1.8
                                     0.19

                           15.0 < disp. < 30.0
                                   2014-2015
                                     0.25
                                      1.8
                                     0.19

                                      all
                                     2016+
                                     0.06
                                      1.8
                                     0.19
[a]See paragraph (a)(6) of this section for interim PM standards that apply for model years 2014 and 2015 for engines between 2000 and 3700 kW. The Tier 4 NOx FEL cap for engines at or above 2000 kW and below 3700 kW is 7.0 g/kW-hr. Starting in the 2016 model year, the Tier 4 PM FEL cap for engines at or above 2000 kW and below 3700 kW is 0.34 g/kW-hr.

   (8) The following optional provisions apply for complying with the Tier 3 and Tier 4 standards specified in paragraphs (a)(3) through (7) of this section:
      (i) You may use NOx credits accumulated through the ABT program to certify Tier 4 engines to a NOx+HC emission standard of 1.9 g/kW-hr instead of the NOx and HC standards that would otherwise apply by certifying your family to a NOx+HC FEL.  Calculate the NOx credits needed as specified in subpart H of this part using the NOx+HC emission standard and FEL in the calculation instead of the otherwise applicable NOx standard and FEL.  You may not generate credits relative to the alternate standard or certify to the standard without using credits.
      (ii) For engines below 1000 kW, you may delay complying with the Tier 4 standards in the 2017 model year for up to nine months, but you must comply no later than October 1, 2017.
      (iii) For engines at or above 3700 kW, you may delay complying with the Tier 4 standards in the 2016 model year for up to twelve months, but you must comply no later than December 31, 2016.
      (iv) For Category 2 engines at or above 1400 kW, you may alternatively comply with the Tier 3 and Tier 4 standards specified in Table 4 of this section instead of the NOx, HC, NOx+HC, and PM standards specified in paragraphs (a)(3) through (7) of this section.  The CO standards specified in paragraph (a)(2) of this section apply without regard to whether you choose this option.  If you choose this option, you must do so for all engines at or above 1400 kW in the same displacement category (that is, 7-15, 15-20, 20-25, or 25-30 liters per cylinder) in model years 2012 through 2015.

                             Table 4 to §1042.101
Optional Tier 3 and Tier 4 Standards for Category 2 Engines at or Above 1400 kW
                                     Tier
                             Maximum Engine Power
                                  Model Year
                                      PM
                                   (g/kW-hr)
                                      NOx
                                   (g/kW-hr)
                                      HC
                                   (g/kW-hr)
                                    Tier 3
                                 kW  > 1400
                                   2012-2014
                                     0.14
                                  7.8 NOx+HC
                                    Tier 4
                            1400 < kW < 3700
                                     2015
                                     0.04
                                      1.8
                                     0.19

                                 kW > 3700
                                     2015
                                     0.06
                                      1.8
                                     0.19

(b) Averaging, banking, and trading.  You may generate or use emission credits under the averaging, banking, and trading (ABT) program as described in subpart H of this part for demonstrating compliance with NOx, NOx+HC, and PM emission standards for Category 1 and Category 2 engines.  You may also use NOx or NOx+HC emission credits to comply with the alternate NOx+HC standard in paragraph (a)(8)(i) of this section.  Generating or using emission credits requires that you specify a family emission limit (FEL) for each pollutant you include in the ABT program for each engine family.  These FELs serve as the emission standards for the engine family with respect to all required testing instead of the standards specified in paragraph (a) of this section.  The FELs determine the not-to-exceed standards for your engine family, as specified in paragraph (c) of this section.  Unless otherwise specified, the following FEL caps apply:
   (1) FELs for Tier 3 engines may not be higher than the applicable Tier 2 standards specified in Appendix I of this part.
   (2) FELs for Tier 4 engines may not be higher than the applicable Tier 3 standards specified in paragraph (a)(3) of this section.
   (3) The following FEL caps apply for engines at or above 3700 kW that are not subject to Tier 3 standards under paragraph (a)(3) of this section:
      (i) FELs may not be higher than the applicable Tier 1 NOx standards specified in Appendix I of this part before the Tier 4 standards start to apply.  
      (ii) FELs may not be higher than the applicable Tier 2 NOx+THC standards specified in Appendix I of this part after the Tier 4 standards start to apply.  
(c) Not-to-exceed standards.  Except as noted in §1042.145(e), exhaust emissions from all engines subject to the requirements of this part may not exceed the not-to-exceed (NTE) standards as follows:
	(1) Use the following equation to determine the NTE standards:
		(i) NTE standard for each pollutant = STD x M.
		Where:
      STD = The standard specified for that pollutant in this section if you certify without using ABT for that pollutant; or the FEL for that pollutant if you certify using ABT.
      M = The NTE multiplier for that pollutant.
      (ii) Round each NTE standard to the same number of decimal places as the emission standard.
   (2) Determine the applicable NTE zone and subzones as described in §1042.515. Determine NTE multipliers for specific zones and subzones and pollutants as follows:
       (i) For marine engines certified using the duty cycle specified in §1042.505(b)(1), except for variable-speed propulsion marine engines used with controllable-pitch propellers or with electrically coupled propellers, apply the following NTE multipliers:
         (A) Subzone 1: 1.2 for Tier 3 NOx+HC standards.
         (B) Subzone 1: 1.5 for Tier 4 standards and Tier 3 PM and CO standards.
         (C) Subzone 2: 1.5 for Tier 4 NOx and HC standards and for Tier 3 NOx+HC standards.
         (D) Subzone 2: 1.9 for PM and CO standards.
      (ii) For recreational marine engines certified using the duty cycle specified in §1042.505(b)(2), except for variable-speed marine engines used with controllable-pitch propellers or with electrically coupled propellers, apply the following NTE multipliers:
         (A) Subzone 1: 1.2 for Tier 3 NOx+HC standards.
         (B) Subzone 1: 1.5 for Tier 3 PM and CO standards.
         (C) Subzones 2 and 3: 1.5 for Tier 3 NOx+HC standards.
         (D) Subzones 2 and 3: 1.9 for PM and CO standards.
      (iii) For variable-speed marine engines used with controllable-pitch propellers or with electrically coupled propellers that are certified using the duty cycle specified in §1042.505(b)(1), (2), or (3), apply the following NTE multipliers:
         (A) Subzone 1: 1.2 for Tier 3 NOx+HC standards.
         (B) Subzone 1: 1.5 for Tier 4 standards and Tier 3 PM and CO standards.
         (C) Subzone 2: 1.5 for Tier 4 NOx and HC standards and for Tier 3 NOx+HC standards.
         (D) Subzone 2: 1.9 for PM and CO standards. However, there is no NTE standard in Subzone 2b for PM emissions if the engine family's applicable standard for PM is at or above 0.07 g/kW-hr.
      (iv) For constant-speed engines certified using a duty cycle specified in §1042.505(b)(3) or (4), apply the following NTE multipliers:
         (A) Subzone 1:  1.2 for Tier 3 NOx+HC standards.
         (B) Subzone 1:  1.5 for Tier 4 standards and Tier 3 PM and CO standards.
         (C) Subzone 2:  1.5 for Tier 4 NOx and HC standards and for Tier 3 NOx+HC standards.
         (D) Subzone 2:  1.9 for PM and CO standards.  However, there is no NTE standard for PM emissions if the engine family's applicable standard for PM is at or above 0.07 g/kW-hr.
      (v) For variable-speed auxiliary marine engines certified using the duty cycle specified in §1042.505(b)(5)(ii) or (iii):
         (A) Subzone 1:  1.2 for Tier 3 NOx+HC standards.
         (B) Subzone 1:  1.5 for Tier 4 standards and Tier 3 PM and CO standards.
         (C) Subzone 2:  1.2 for Tier 3 NOx+HC standards.
         (D) Subzone 2:  1.5 for Tier 4 standards and Tier 3 PM and CO standards.  However, there is no NTE standard for PM emissions if the engine family's applicable standard for PM is at or above 0.07 g/kW-hr.
    (3) The NTE standards apply to your engines whenever they operate within the NTE zone for an NTE sampling period of at least thirty seconds, during which only a single operator demand set point may be selected.  Engine operation during a change in operator demand is excluded from any NTE sampling period.  There is no maximum NTE sampling period.
   (4) Collect emission data for determining compliance with the NTE standards using the procedures described in subpart F of this part.
   (5) You may ask us to accept as compliant an engine that does not fully meet specific requirements under the applicable NTE standards where such deficiencies are necessary for safety.
*	*	*	*	*

47. Section 1042.104 is amended by revising paragraph (a)(2) to read as follows:
§1042.104  Exhaust emission standards for Category 3 engines.
(a)	*	*	*
   (2) NOx standards apply based on the engine's model year and maximum in-use engine speed as shown in the following table:
                             Table 1 to §1042.104
            NOx Emission Standards for Category 3 Engines (g/kW-hr)
                                   Emission 
                                   Standards
                                    Model 
                                     Year
                          Maximum In-Use Engine Speed


                               Less than 130 RPM
                                130-2000 RPM[a]
                                 Over 2000 RPM
                                    Tier 1
                                 2004-2010[b]
                                     17.0 
                              45.0 ∙ n[(-0.20)]
                                      9.8
                                    Tier 2
                                   2011-2015
                                     14.4 
                              44.0 ∙ n[(-0.23)]
                                      7.7
                                   Tier 3 c
                                2016 and later
                                      3.4
                              9.0 ∙ n[(-0.20)]
                                      2.0
[a] Applicable standards are calculated from n (maximum in-use engine speed, in RPM, as specified in §1042.140).  Round the standards to one decimal place. 
[b] Tier 1 NOx standards apply as specified in 40 CFR part 94 for engines originally manufactured in model years 2004 through 2010.  They are shown here only for reference.
[c] For engines designed with on-off controls as specified in §1042.115(g), the Tier 2 standards continue to apply anytime the engine has disabled its Tier 3 NOx emission controls. 
*	*	*	*	*

48. Section 1042.110 is amended by revising paragraph (d) to read as follows:
§1042.110  Recording reductant use and other diagnostic functions.
*	*	*	*	*
(d) For Category 3 engines equipped with on-off NOx controls (as allowed by §1042.115(g)), you must also equip your engine to continuously monitor NOx concentrations in the exhaust.  See §1042.650 to determine if this requirement applies for a given Category 1 or Category 2 engine.  For measurement technologies involving discrete sampling events, measurements are considered continuous if they repeat at least once every 60 seconds; we may approve a longer sampling period if it is necessary or appropriate for sufficiently accurate measurements.  Describe your system for onboard NOx measurements in your application for certification.  Use good engineering judgment to alert operators if measured NOx concentrations indicate malfunctioning emission controls.  Record any such operation in nonvolatile computer memory.  You are not required to monitor NOx concentrations during operation for which the emission controls may be disabled under §1042.115(g).  For the purpose of this paragraph (d), "malfunctioning emission controls" means any condition in which the measured NOx concentration exceeds the highest value expected when the engine is in compliance with the installed engine standard of §1042.104(g).  Use good engineering judgment to determine these expected values during production-line testing of the engine using linear interpolation between test points and accounting for the degree to which the cycle-weighted emissions of the engine are below the standard.  You may also use additional intermediate test points measured during the production-line test.  Note that the provisions of paragraph (a) of this section also apply for SCR systems covered by this paragraph (d).  For engines subject to both the provisions of paragraph (a) of this section and this paragraph (d), use good engineering judgment to integrate diagnostic features to comply with both paragraphs.  For example, engines may use on-off NOx controls to disable certain emission control functions only if the diagnostic system indicates that the monitoring described in this paragraph (d) is active.

49. Section 1042.120 is amended by revising paragraph (b) introductory text to read as follows:
§1042.120  Emission-related warranty requirements.
*	*	*	*	*
(b) Warranty period.  Your emission-related warranty must be valid for at least as long as the minimum warranty periods listed in this paragraph (b) in hours of operation and years, whichever comes first.  You may offer an emission-related warranty more generous than we require.  The emission-related warranty for the engine may not be shorter than any basic mechanical warranty you provide without charge for the engine.  Similarly, the emission-related warranty for any component may not be shorter than any warranty you provide without charge for that component.  This means that your warranty may not treat emission-related and nonemission-related defects differently for any component.  If an engine has no hour meter, we base the warranty periods in this paragraph (b) only on the engine's age (in years).  The warranty period begins when the engine is placed into service.  The following minimum warranty periods apply:
*	*	*	*	*

50. Section 1042.125 is amended by revising paragraphs (c) and (e) to read as follows:
§1042.125  Maintenance instructions.
*	*	*	*	*
(c) Special maintenance.  You may specify more frequent maintenance to address problems related to special situations, such as atypical engine operation.  You must clearly state that this additional maintenance is associated with the special situation you are addressing.  You may also address maintenance of low-use engines (such as recreational or stand-by engines) by specifying the maintenance interval in terms of calendar months or years in addition to your specifications in terms of engine operating hours.  All special maintenance instructions must be consistent with good engineering judgment.  We may disapprove your maintenance instructions if we determine that you have specified special maintenance steps to address engine operation that is not atypical, or that the maintenance is unlikely to occur in use.  If we determine that certain maintenance items do not qualify as special maintenance under this paragraph (c), you may identify this as recommended additional maintenance under paragraph (b) of this section.
*	*	*	*	*
(e) Maintenance that is not emission-related.  For maintenance unrelated to emission controls, you may schedule any amount of inspection or maintenance.  You may also take these inspection or maintenance steps during service accumulation on your emission-data engines, as long as they are reasonable and technologically necessary.  This might include adding engine oil, changing air, fuel, or oil filters, servicing engine-cooling systems, and adjusting idle speed, governor, engine bolt torque, valve lash, or injector lash.  You may not perform this nonemission-related maintenance on emission-data engines more often than the least frequent intervals that you recommend to the ultimate purchaser.
*	*	*	*	*

51. Section 1042.130 is amended by revising paragraph (b) to read as follows:
§1042.130  Installation instructions for vessel manufacturers.
*	*	*	*	*
(b) Make sure these instructions have the following information:
	(1) Include the heading: "Emission-related installation instructions".
   (2) State: "Failing to follow these instructions when installing a certified engine in a vessel violates federal law (40 CFR 1068.105(b)), subject to fines or other penalties as described in the Clean Air Act."
   (3)  Describe the instructions needed to properly install the exhaust system and any other components.  Include instructions consistent with the requirements of §1042.205(u).
   (4) Describe any necessary steps for installing the diagnostic system described in §1042.110.
   (5) Describe how your certification is limited for any type of application.  For example, if your engines are certified only for constant-speed operation, tell vessel manufacturers not to install the engines in variable-speed applications or modify the governor.
   (6) Describe any other instructions to make sure the installed engine will operate according to design specifications in your application for certification.  This may include, for example, instructions for installing aftertreatment devices when installing the engines.
   (7) State: "If you install the engine in a way that makes the engine's emission control information label hard to read during normal engine maintenance, you must place a duplicate label on the vessel, as described in 40 CFR 1068.105."
   (8) Describe any vessel labeling requirements specified in §1042.135.
*	*	*	*	*

52. Section 1042.135 is amended by revising paragraphs (c), (d), and (e) to read as follows:
§1042.135  Labeling.
   *	*	*	*	*
(c) The label must -- 
   (1) Include the heading "EMISSION CONTROL INFORMATION".
   (2) Include your full corporate name and trademark.  You may identify another company and use its trademark instead of yours if you comply with the branding provisions of 40 CFR 1068.45.
   (3) Include EPA's standardized designation for the engine family (and subfamily, where applicable).
   (4) Identify all the emission standards that apply to the engine (or FELs, if applicable).  If you do not declare an FEL under subpart H of this part, you may alternatively state the engine's category, displacement (in liters or L/cyl), maximum engine power (in kW), and power density (in kW/L) as needed to determine the emission standards for the engine family.  You may specify displacement, maximum engine power, or power density as a range consistent with the ranges listed in §1042.101.  See §1042.140 for descriptions of how to specify per-cylinder displacement, maximum engine power, and power density.
   (5) State the date of manufacture [DAY (optional), MONTH, and YEAR]; however, you may omit this from the label if you stamp, engrave, or otherwise permanently identify it elsewhere on the engine, in which case you must also describe in your application for certification where you will identify the date on the engine.
   (6) Identify the application(s) for which the engine family is certified (such as constant-speed auxiliary, variable-speed propulsion engines used with fixed-pitch propellers, etc.).  If the engine is certified as a recreational engine, state: "INSTALLING THIS RECREATIONAL ENGINE IN A COMMERCIAL VESSEL OR USING THE VESSEL FOR COMMERCIAL PURPOSES MAY VIOLATE FEDERAL LAW SUBJECT TO CIVIL PENALTY (40 CFR 1042.601)."
   (7) For engines using sulfur-sensitive technologies, state: "ULTRA LOW SULFUR DIESEL FUEL ONLY".
   (8) State the useful life for your engine family if the applicable useful life is based on the provisions of §1042.101(e)(2) or (3), or §1042.104(d)(2).
   (9)  Identify the emission control system.  Use terms and abbreviations as described in 40 CFR 1068.45.  You may omit this information from the label if there is not enough room for it and you put it in the owners manual instead.
     	(10) State: "THIS MARINE ENGINE COMPLIES WITH U.S. EPA REGULATIONS FOR [MODEL YEAR]."
   (11) For a Category 1 or Category 2 engine that can be modified to operate on residual fuel, but has not been certified to meet the standards on such a fuel, include the statement: "THIS ENGINE IS CERTIFIED FOR OPERATION ONLY WITH DIESEL FUEL. MODIFYING THE ENGINE TO OPERATE ON RESIDUAL OR INTERMEDIATE FUEL MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTIES."
   (12) For an engine equipped with on-off emissions controls as allowed by §1042.115, include the statement: "THIS ENGINE IS CERTIFIED WITH ON-OFF EMISSION CONTROLS.  OPERATION OF THE ENGINE CONTRARY TO 40 CFR 1042.115(g) IS A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTIES."
   (13) For engines intended for installation on domestic or public vessels, include the following statement: "THIS ENGINE DOES NOT COMPLY WITH INTERNATIONAL MARINE REGULATIONS FOR COMMERCIAL VESSELS UNLESS IT IS ALSO COVERED BY AN EIAPP CERTIFICATE."
(d) You may add information to the emission control information label as follows:
   (1) If your emission control information label includes all the information described in paragraphs (c)(5) and (9) of this section, you may identify other emission standards that the engine meets or does not meet (such as international standards).  You may include this information by adding it to the statement we specify or by including a separate statement.  
   (2) You may add other information to ensure that the engine will be properly maintained and used.
   (3) You may add appropriate features to prevent counterfeit labels.  For example, you may include the engine's unique identification number on the label.
(e) For engines using sulfur-sensitive technologies, create a separate label with the statement: "ULTRA LOW SULFUR DIESEL FUEL ONLY".  Permanently attach this label to the vessel near the fuel inlet or, if you do not manufacture the vessel, take one of the following steps to ensure that the vessel will be properly labeled:
   (1) Provide the label to each vessel manufacturer and include in the emission-related installation instructions the requirement to place this label near the fuel inlet.
   (2) Confirm that the vessel manufacturers install their own complying labels.
   *	*	*	*	*

53. Section 1042.140 is amended by revising paragraph (e) to read as follows:
§1042.140  Maximum engine power, displacement, power density, and maximum in-use engine speed.
*	*	*	*	*
(e) Throughout this part, references to a specific power value for an engine are based on maximum engine power.  For example, the group of engines with maximum engine power below 600 kW may be referred to as engines below 600 kW.
*	*	*	*	*

Subpart C -- Certifying Engine Families

54. Section 1042.201 is amended by revising paragraphs (a) and (g) to read as follows:
§1042.201  General requirements for obtaining a certificate of conformity.
(a) You must send us a separate application for a certificate of conformity for each engine family.  A certificate of conformity is valid for new production from the indicated effective date until the end of the model year for which it is issued, which may not extend beyond December 31 of that year.  No certificate will be issued after December 31 of the model year.  You may amend your application for certification after the end of the model year in certain circumstances as described in §§ 1042.220 and 1042.225.  You must renew your certification annually for any engines you continue to produce.
*	*	*	*	*
(g) We may require you to deliver your test engines to a facility we designate for our testing (see §1042.235(c)).  Alternatively, you may choose to deliver another engine that is identical in all material respects to the test engine, or another engine that we determine can appropriately serve as an emission-data engine for the engine family.
*	*	*	*	*

55. Section 1042.205 is amended by revising paragraphs (g), (o), (r)(1), and (bb)(1) to read as follows:
§1042.205  Application requirements.
*	*	*	*	*
(g) List the specifications of the test fuel(s) to show that they fall within the required ranges we specify in 40 CFR part 1065.
*	*	*	*	*
(o) Present emission data for HC, NOx, PM, and CO on an emission-data engine to show your engines meet emission standards as specified in §§1042.101 or 1042.104.  Note that you must submit PM data for all engines, whether or not a PM standard applies.  Show emission figures before and after applying adjustment factors for regeneration and deterioration factors for each pollutant and for each engine.  If we specify more than one grade of any fuel type (for example, high-sulfur and low-sulfur diesel fuel), you need to submit test data only for one grade, unless the regulations of this part specify otherwise for your engine.  Include emission results for each mode for Category 3 engines or for other engines if you do discrete-mode testing under §1042.505.  For engines using on-off controls as described in §1042.115(g), include emission data demonstrating compliance with the Tier 2 standards when the engines Tier 3 NOx emission controls are disabled.  Note that §§1042.235 and 1042.245 allows you to submit an application in certain cases without new emission data.
*	*	*	*	*
(r)	*	*	*
(1)  Report all valid test results involving measurement of pollutants for which emission standards apply.  Also indicate whether there are test results from invalid tests or from any other tests of the emission-data engine, whether or not they were conducted according to the test procedures of subpart F of this part.  We may require you to report these additional test results.  We may ask you to send other information to confirm that your tests were valid under the requirements of this part and 40 CFR part 1065.  
*	*	*	*	*
(bb)	*	*	*
(1) Describe your normal practice for importing engines.  For example, this may include identifying the names and addresses of any agents you have authorized to import your engines.  
*	*	*	*	*

56. Section 1042.225 is amended by revising the introductory text and adding paragraph (b)(4) to read as follows:
§1042.225  Amending applications for certification.
Before we issue you a certificate of conformity, you may amend your application to include new or modified engine configurations, subject to the provisions of this section. After we have issued your certificate of conformity, but before the end of the model year, you may send us an amended application requesting that we include new or modified engine configurations within the scope of the certificate, subject to the provisions of this section. Before the end of the model year, you must amend your application if any changes occur with respect to any information that is included or should be included in your application. After the end of the model year, you may amend your application only to update maintenance instructions as described in §1042.220 or to modify an FEL as described in paragraph (f) of this section.
*	*	*	*	*
(b)	*	*	*
(4) Include any other information needed to make your application correct and complete.
*	*	*	*	*

57. Section 1042.235 is amended by revising paragraph (b) to read as follows:
§1042.235  Emission testing related to certification.
*	*	*	*	*
(b) Test your emission-data engines using the procedures and equipment specified in subpart F of this part.  In the case of dual-fuel engines, measure emissions when operating with each type of fuel for which you intend to certify the engine. In the case of flexible-fuel engines, measure emissions when operating with the fuel mixture that is most likely to cause the engine to exceed the applicable NOx (or NOx+HC) emission standard, though you may ask us to instead perform tests with both fuels separately if you can show that intermediate mixtures are not likely to occur in use.
*	*	*	*	*

58. Section 1042.240 is amended by revising paragraphs (c)(3) and (d) and adding paragraphs (c)(4) and (c)(5) to read as follows:
§1042.240  Demonstrating compliance with exhaust emission standards.
*	*	*	*	*
(c) 	*	*	*
   (3) Sawtooth deterioration patterns. The deterioration factors described in paragraphs (c)(1) and (2) of this section assume that the highest useful life emissions occur either at the end of useful life or at the low-hour test point. The provisions of this paragraph (c)(3) apply where good engineering judgment indicates that the highest emissions over the useful life will occur between these two points. For example, emissions may increase with service accumulation until a certain maintenance step is performed, then return to the low-hour emission levels and begin increasing again. Base deterioration factors for engines with such emission patterns on the difference between (or ratio of) the point at which the highest emissions occur and the low-hour test point. Note that this applies for maintenance-related deterioration only where we allow such critical emission-related maintenance.
   (4) Deterioration factor for crankcase emissions.  If your engine vents crankcase emissions to the exhaust or to the atmosphere, you must account for crankcase emission deterioration, using good engineering judgment.  You may use separate deterioration factors for crankcase emissions of each pollutant (either multiplicative or additive) or include the effects in combined deterioration factors that include exhaust and crankcase emissions together for each pollutant.
   (5) Dual-fuel and flexible-fuel engines.  In the case of dual-fuel and flexible-fuel engines, apply deterioration factors separately for each fuel type. 
(d) Calculate emission data using measurements to at least one more decimal place than the applicable standard.  Apply the deterioration factor to the official emission result, as described in paragraph (c) of this section, then round the adjusted figure to the same number of decimal places as the emission standard.  Compare the rounded emission levels to the emission standard for each emission-data engine.  In the case of NOx+HC standards, apply the deterioration factor to each pollutant and then add the results before rounding.
*	*	*	*	*

59. Section 1042.250 is amended by revising paragraphs (b)(3)(iv) and (c) to read as follows:
§1042.250  Recordkeeping and reporting.
   *	*	*	*	*
(b) 	*	*	*
(3)	*	*	*
(iv) All your emission tests, including the date and purpose of each test and documentation of test parameters as specified in part 40 CFR part 1065.
*	*	*	*	*
(c) Keep required data from emission tests and all other information specified in this section for eight years after we issue your certificate. If you use the same emission data or other information for a later model year, the eight-year period restarts with each year that you continue to rely on the information.
*	*	*	*	*

60. Section 1042.255 is amended by revising paragraphs (c)(2), (d), and (e) to read as follows:
§1042.255  EPA decisions.
*	*	*	*	*
(c)	*	*	*
(2) Submit false or incomplete information (paragraph (e) of this section applies if this is fraudulent). This includes doing anything after submission of your application to render any of the submitted information false or incomplete.
*	*	*	*	*
(d) We may void the certificate of conformity for an engine family if you fail to keep records, send reports, or give us information as required under this part or the Clean Air Act. Note that these are also violations of 40 CFR 1068.101(a)(2).
(e) We may void your certificate if we find that you intentionally submitted false or incomplete information. This includes rendering submitted information false or incomplete after submission.
*	*	*	*	*
Subpart D -- Testing Production-Line Engines

61. Section 1042.302 is amended by revising paragraph (a) to read as follows:
§1042.302  Applicability of this subpart for Category 3 engines.
*	*	*	*	*
(a) You must test each Category 3 engine at the sea trial of the vessel in which it is installed or within the first 300 hours of operation, whichever occurs first.  This may involve testing a fully assembled production engine before it is installed in the vessel.  Since you must test each engine, the provisions of §§1042.310 and 1042.315(b) do not apply for Category 3 engines.  If we determine that an engine failure under this subpart is caused by defective components or design deficiencies, we may revoke or suspend your certificate for the engine family as described in §1042.340.  If we determine that an engine failure under this subpart is caused only by incorrect assembly, we may suspend your certificate for the engine family as described in §1042.325.  If the engine fails, you may continue operating only to complete the sea trial and return to port.  It is a violation of 40 CFR 1068.101(b)(1) to operate the vessel further until you remedy the cause of failure.  Each two-hour period of such operation constitutes a separate offense. A violation lasting less than two hours constitutes a single offense.
*	*	*	*	*

Subpart F --  Test Procedures 


62. Section 1042.501 is amended by revising paragraphs (d), (e), and (f) and adding paragraph (h) to read as follows:
§1042.501  How do I run a valid emission test?
   *	*	*	*	*
(d) Adjust measured emissions to account for aftertreatment technology with infrequent regeneration as described in §1042.525. 
(e) Duty-cycle testing is limited to atmospheric pressures between 91.000 and 103.325 kPa.
(f) You may use special or alternate procedures to the extent we allow them under 40 CFR 1065.10.
*	*	*	*	*
(h) This subpart is addressed to you as a manufacturer, but it applies equally to anyone who does testing for you, and to us when we perform testing to determine if your engines meet emission standards.

63. Section 1042.505 is amended by revising paragraph (b)(5)(iii) to read as follows:
§1042.505  Testing engines using discrete-mode or ramped-modal duty cycles.
   *	*	*	*	*
(b)	*	*	*
(5)	*	*	*
(iii)  Use the 8-mode duty cycle or the corresponding ramped-modal cycle described in 40 CFR part 1039, Appendix II, paragraph (c) for variable-speed auxiliary engines with maximum engine power at or above 19 kW that are not propeller-law engines.
*	*	*	*	*

64. Section 1042.515 is amended by revising paragraphs (f)(2), (f)(4), and (g) to read as follows:
§1042.515  Test procedures related to not-to-exceed standards.
*	*	*	*	*
(f)	*	*	*
   (2) You may ask us to approve a Limited Testing Region (LTR).  An LTR is a region of engine operation, within the applicable NTE zone, where you have demonstrated that your engine family operates for no more than 5.0 percent of its normal in-use operation, on a time-weighted basis.  You must specify an LTR using boundaries based on engine speed and power (or torque), where the LTR boundaries must coincide with some portion of the boundary defining the overall NTE zone.  Any emission data collected within an LTR for a time duration that exceeds 5.0 percent of the duration of its respective NTE sampling period will be excluded when determining compliance with the applicable NTE standards.  Any emission data collected within an LTR for a time duration of 5.0 percent or less of the duration of the respective NTE sampling period will be included when determining compliance with the NTE standards.
   *	*	*	*	*
   (4) You may exclude emission data based on catalytic aftertreatment temperatures as follows:
      (i) For an engine equipped with a catalytic NOx aftertreatment system, exclude NOx emission data that is collected when the exhaust temperature at any time during the NTE event is less than 250 °C.
      (ii) For an engine equipped with an oxidizing catalytic aftertreatment system, exclude HC and CO emission data that is collected when the exhaust temperature at any time during the NTE event is less than 250 °C. Also exclude PM emission data if the applicable PM standard (or family emission limit) is above 0.06 g/kW-hr. Where there are parallel paths, measure the temperature 30 cm downstream of the last oxidizing aftertreatment device in the path with the greatest exhaust flow.
      (iii) Measure exhaust temperature within 30 cm downstream of the last applicable catalytic aftertreatment device.  Where there are parallel paths, use good engineering judgment to measure the temperature within 30 cm downstream of the last applicable catalytic aftertreatment device in the path with the greatest exhaust flow.
(g) Emission sampling is not valid for NTE testing if it includes any active regeneration, unless the emission averaging period includes the complete regeneration event(s) and the full period of engine operation until the start of the next regeneration event.  This provision applies only for engines that send an electronic signal indicating the start of the regeneration event.

65. Section 1042.525 is revised to read as follows:
§1042.525  How do I adjust emission levels to account for infrequently regenerating aftertreatment devices?
For engines using aftertreatment technology with infrequent regeneration events that may occur during testing, take one of the following approaches to account for the emission impact of regeneration, or use an alternate methodology that we approve for Category 3 engines:
(a) You may use the calculation methodology described in 40 CFR 1065.680 to adjust measured emission results. Do this by developing an upward adjustment factor and a downward adjustment factor for each pollutant based on measured emission data and observed regeneration frequency as follows:
   (1) Adjustment factors should generally apply to an entire engine family, but you may develop separate adjustment factors for different configurations within an engine family. Use the adjustment factors from this section in all testing for the engine family.
   (2) You may use carryover or carry-across data to establish adjustment factors for an engine family as described in the §1042.235, consistent with good engineering judgment. 
   (3) Determine the frequency of regeneration, F, as described in 40 CFR 1065.680 from in-use operating data or from running repetitive tests in a laboratory.  If the engine is designed for regeneration at fixed time intervals, you may apply good engineering judgment to determine F based on those design parameters.  All adjustment factors for regeneration are additive.
   (4) Identify the value of F in each application for certification for which it applies. 
(b) You may ask us to approve an alternate methodology to account for regeneration events.  We will generally limit approval to cases where your engines use aftertreatment technology with extremely infrequent regeneration and you are unable to apply the provisions of this section.
(c) You may choose to make no adjustments to measured emission results if you determine that regeneration does not significantly affect emission levels for an engine family (or configuration) or if it is not practical to identify when regeneration occurs. If you choose not to make adjustments under paragraph (a) or (b) of this section, your engines must meet emission standards for all testing, without regard to regeneration.

Subpart G -- Special Compliance Provisions

66. Section 1042.601 is amended by adding paragraph (j) to read as follows:
§1042.601  General compliance provisions for marine engines and vessels.
*	*	*	*	*
(j) Subpart C of this part describes how to test and certify dual-fuel and flexible-fuel engines. Some multi-fuel engines may not fit either of those defined terms.  For such engines, we will determine whether it is most appropriate to treat them as single-fuel engines, dual-fuel engines, or flexible-fuel engines based on the range of possible and expected fuel mixtures.  For example, an engine might burn natural gas but initiate combustion with a pilot injection of diesel fuel.  If the engine is designed to operate with a single fueling algorithm (i.e., fueling rates are fixed at a given engine speed and load condition), we would generally treat it as a single-fuel engine,  In this context, the combination of diesel fuel and natural gas would be its own fuel type.  If the engine is designed to also operate on diesel fuel alone, we would generally treat it as a dual-fueled engine.  If the engine is designed to operate on varying mixtures of the two fuels, we would generally treat it as a flexible-fueled engine. To the extent that requirements vary for the different fuels or fuel mixtures, we may apply the more stringent requirements.

67. Section 1042.605 is amended by revising paragraphs (d)(3)(ii) and (e)(3) to read as follows:
§1042.605  Dressing engines already certified to other standards for nonroad or heavy-duty highway engines for marine use.
*	*	*	*	*
(d)	*	*	*
(3)	*	*	*
(ii) Replacing an original turbocharger, except that small-volume engine manufacturers may replace an original turbocharger on a recreational engine with one that matches the performance of the original turbocharger.
*	*	*	*	*
(e)	*	*	*
   (3) Send the Designated Compliance Officer written notification describing your plans before using the provisions of this section.  In addition, by February 28 of each calendar year (or less often if we tell you), send the Designated Compliance Officer a signed letter with all the following information:
      (i) Identify your full corporate name, address, and telephone number.
      (ii) List the engine models for which you used this exemption in the previous year and describe your basis for meeting the sales restrictions of paragraph (d)(4) of this section.
      (iii) State: "We prepared each listed engine model for marine application without making any changes that could increase its certified emission levels, as described in 40 CFR 1042.605."
*	*	*	*	*

68. Section 1042.610 is amended by revising paragraph (e)(2) to read as follows:
§1042.610  Certifying auxiliary marine engines to land-based standards.
      *	*	*	*	*
(e)	*	*	*
(2) Send the Designated Compliance Officer written notification describing your plans before using the provisions of this section.  In addition, by February 28 of each calendar year (or less often if we tell you), send the Designated Compliance Officer a signed letter with all the following information:
      (i) Identify your full corporate name, address, and telephone number.
      (ii) List the engine models for which you used this exemption in the previous year and describe your basis for meeting the sales restrictions of paragraph (d)(3) of this section.
      (iii) State: "We prepared each listed engine model for marine application without making any changes that could increase its certified emission levels, as described in 40 CFR 1042.610." 
*	*	*	*	*

69. Section 1042.630 is amended by revising paragraph (f) to read as follows:
§1042.630  Personal-use exemption.
*	*	*	*	*
(f) The vessel must be a vessel that is not classed or subject to Coast Guard inspections or surveys.  Note that dockside examinations performed by the Coast Guard are not considered inspections (see 46 U.S.C. 3301 and 46 U.S.C. 4502).  
	
70. Section 1042.635 is amended by revising paragraph (d)(4) to read as follows:
§1042.635  National security exemption.
*	*	*	*	*
(d)	*	*	*
(4) The statement "THIS ENGINE HAS AN EXEMPTION FOR NATIONAL SECURITY UNDER 40 CFR 1042.635."

§1042.640  -- [Removed]
71. Section 1042.640 is removed.

72. Section 1042.650 is amended by revising paragraphs (a), (d)(1)(iii) and adding paragraph and (d)(5) to read as follows:
§1042.650  Migratory vessels.
*	*	*	*	*
(a) Temporary exemption. A vessel owner may ask us for a temporary exemption from the tampering prohibition in 40 CFR 1068.101(b)(1) for a vessel if it will operate for an extended period outside the United States where ULSD is not available.  In your request, describe where the vessel will operate, how long it will operate there, why ULSD will be unavailable, and how you will modify the engine, including its emission controls.  If we approve your request, you may modify the engine, but only as needed to disable or remove the emission controls needed for meeting the Tier 4 standards.  You must return the engine to its original certified configuration before the vessel returns to the United States to avoid violating the tampering prohibition in 40 CFR 1068.101(b)(1).  We may set additional conditions to prevent circumvention of the provisions of this part.
*	*	*	*	*
(d)	*	*	* 
(1)	*	*	*
(iii) Engines certified to the Annex VI Tier III standards may be equipped with on-off NOx controls, as long as they conform to the requirements of §§ 1042.110(d) and 1042.115(g) ; however, the engines must comply fully with the Annex VI Tier II standards when the emission controls are disabled.  .  
*	*	*	*	*
(5)  The reporting requirements of §1042.660 apply for engines exempted under this paragraph (d).

73. Section 1042.655 is amended by revising paragraph (b) to read as follows:
§1042.655  Special certification provisions for - Category 3 engines with aftertreatment.
*	*	*	*	*
(b) Required testing.  The emission-data engine must be tested as specified in subpart F of this part to verify that the engine-out emissions comply with the Tier 2 standards.  The catalyst material or other aftertreatment device must be tested under conditions that accurately represent actual engine conditions for the test points.  This catalyst or aftertreatment testing may be performed on a benchscale.
*	*	*	*	*

74. Section 1042.660 is amended by revising paragraphs (b) and (c)(1) to read as follows:
§1042.660  Requirements for vessel manufacturers, owners, and operators.
*	*	*	*	*
(b) For vessels equipped with SCR systems requiring the use of urea or other reductants, owners and operators must report to the Designated Enforcement Officer within 30 days any operation of such vessels without the appropriate reductant.  This includes vessels with auxiliary engines certified to Annex VI standards under §1042.650(d).  Failure to comply with the requirements of this paragraph is a violation of 40 CFR 1068.101(a)(2).  Note that such operation is a violation of 40 CFR 1068.101(b)(1).
(c)	*	*	* 
   (1) The requirements of this paragraph (c)(1) apply only for Category 3 engines. All maintenance, repair, adjustment, and alteration of Category 3 engines subject to the provisions of this part performed by any owner, operator or other maintenance provider must be performed using good engineering judgment, in such a manner that the engine continues (after the maintenance, repair, adjustment or alteration) to meet the emission standards it was certified as meeting prior to the need for service.  This includes but is not limited to complying with the maintenance instructions described in §1042.125. Adjustments are limited to the range specified by the engine manufacturer in the approved application for certification.  Note that where a repair (or other maintenance) cannot be completed while at sea, it is not a violation to continue operating the engine to reach your destination.

75. Section 1042.670 is amended by revising paragraph (d) to read as follows:
§1042.670  Special provisions for gas turbine engines.
*	*	*	*	*
(d) Equivalent displacement.  Apply displacement-based provisions of this part by calculating an equivalent displacement from maximum engine power.  The equivalent per-cylinder displacement (in liters) equals maximum engine power in kW multiplied by 0.00311, except that all gas turbines with maximum engine power above 9,300 kW are considered to have an equivalent per-cylinder displacement of 29.0 liters. Also, determine the appropriate Tier 3 standards for Category 1 engines based on the engine having an equivalent power density below 35 kW per liter.
*	*	*	*	*
Subpart H -- Averaging, Banking, and Trading for Certification

76. Section 1042.701 is amended by adding paragraphs (j) and (k) to read as follows:
§1042.701  General provisions.
*	*	*	*	*
(j) NOx+HC and PM credits generated under 40 CFR part 94 may be used under this part in the same manner as NOx+HC and PM credits generated under this part.
(k) You may use either of the following approaches to retire or forego emission credits:
   (1) You may trade emission credits generated from any number of your vehicles to the vehicle purchasers or other parties to retire the credits.  Identify any such credits in the reports described in §1042.730.  Vehicles must comply with the applicable FELs even if you donate or sell the corresponding emission credits under this paragraph (e).  Those credits may no longer be used by anyone to demonstrate compliance with any EPA emission standards.
(2) You may certify a family using an FEL below the emission standard as described in this part and choose not to generate emission credits for that family.  If you do this, you do not need to calculate emission credits for those families and you do not need to submit or keep the associated records described in this subpart for that family.
77. Section 1042.705 is amended by revising paragraph (c) to read as follows:
§1042.705  Generating and calculating emission credits.
*	*	*	*	*
(c) As described in §1042.730, compliance with the requirements of this subpart is determined at the end of the model year based on actual U.S.-directed production volumes.  Do not include any of the following engines to calculate emission credits:
   (1) Engines with a permanent exemption under subpart G of this part or under 40 CFR part 1068.
   (2) Exported engines.
   (3) Engines not subject to the requirements of this part, such as those excluded under §1042.5.
   (4) [Reserved]
   (5) Any other engines, where we indicate elsewhere in this part 1042 that they are not to be included in the calculations of this subpart.

78. Section 1042.710 is amended by revising paragraph (c) to read as follows:
§1042.710  Averaging emission credits.
*	*	*	*	*
(c) If you certify an engine family to an FEL that exceeds the otherwise applicable emission standard, you must obtain enough emission credits to offset the engine family's deficit by the due date for the final report required in §1042.730.  The emission credits used to address the deficit may come from your other engine families that generate emission credits in the same model year, from emission credits you have banked from previous model years, or from emission credits generated in the same or previous model years that you obtained through trading.

79. Section 1042.720 is amended by revising paragraph (a) to read as follows:
§1042.720   Trading emission credits.
(a) Trading is the exchange of emission credits between manufacturers, or the transfer of credits to another party to retire them. You may use traded emission credits for averaging, banking, or further trading transactions.
*	*	*	*	*

80. Section 1042.725 is amended by revising paragraph (b)(2) to read as follows:
§1042.725  Information required for the application for certification.
*	*	*	*	*
(b)	*	*	*
(2) Detailed calculations of projected emission credits (positive or negative) based on projected production volumes.  We may require you to include similar calculations from your other engine families to demonstrate that you will be able to avoid negative credit balances for the model year.  If you project negative emission credits for a family, state the source of positive emission credits you expect to use to offset the negative emission credits.

81. Section 1042.730 is amended by revising paragraphs (b) and (c)(2) to read as follows:
§1042.730  ABT reports.
*	*	*	*	*
(b) Your end-of-year and final reports must include the following information for each engine family participating in the ABT program:
   (1) Engine-family designation and averaging set.
   (2) The emission standards that would otherwise apply to the engine family.
   (3) The FEL for each pollutant.  If you change the FEL after the start of production, identify the date that you started using the new FEL and/or give the engine identification number for the first engine covered by the new FEL.  In this case, identify each applicable FEL and calculate the positive or negative emission credits as specified in §1042.225. 
   (4) The projected and actual U.S.-directed production volumes for the model year, as described in §1042.705(c). If you changed an FEL during the model year, identify the actual U.S.-directed production volume associated with each FEL.
   (5) Maximum engine power for each engine configuration, and the average engine power weighted by U.S.-directed production volumes for the engine family.
   (6) Useful life.
   (7) Calculated positive or negative emission credits for the whole engine family.  Identify any emission credits that you traded, as described in paragraph (d)(1) of this section.
(c)	*	*	*
(2) State whether you will retain any emission credits for banking. If you choose to retire emission credits that would otherwise be eligible for banking, identify the engine families that generated the emission credits, including the number of emission credits from each family.
*	*	*	*	*

82. Section 1042.735 is amended by revising paragraphs (a) and (b) to read as follows:
§1042.735  Recordkeeping.
(a) You must organize and maintain your records as described in this section.  
(b) Keep the records required by this section for at least eight years after the due date for the end-of-year report.  You may not use emission credits for any engines if you do not keep all the records required under this section.  You must therefore keep these records to continue to bank valid credits.  
*	*	*	*	*
Subpart I -- Special Provisions for Remanufactured Marine Engines


83. Section 1042.810 is amended by revising paragraph (c) to read as follows:
§1042.810   Requirements for owner/operators and installers during remanufacture.
*	*	*	*	*
(c) Your engine is not subject to the standards of this subpart if we determine that no certified remanufacturing system is available for your engine as described in §1042.815. For engines that are remanufactured during multiple events within a five-year period, you are not required to use a certified system until all of your engine's cylinders have been replaced after the system became available. For example, if you remanufacture your 16-cylinder engine by replacing four cylinders each January and a system becomes available for your engine June 1, 2010, your engine must be in a certified configuration when you replace four cylinders in January of 2014. At that point, all 16 cylinders would have been replaced after June 1, 2010.
*	*	*	*	*

84. Section 1042.830 is revised to read as follows:
§1042.830  Labeling.
(a) The labeling requirements of this paragraph (a) apply for remanufacturing that is subject to the standards of this subpart.  At the time of remanufacture, affix a permanent and legible label identifying each engine. The label must be -- 
   (1) Attached in one piece so it is not removable without being destroyed or defaced.
   (2) Secured to a part of the engine needed for normal operation and not normally requiring replacement.
   (3) Durable and readable for the engine's entire useful life.
   (4) Written in English.
(b) The label required under paragraph (a) of this section must -- 
   (1) Include the heading "EMISSION CONTROL INFORMATION".
   (2) Include your full corporate name and trademark.
   (3) Include EPA's standardized designation for the engine family.
   (4) State the engine's category, displacement (in liters or L/cyl), maximum engine power (in kW), and power density (in kW/L) as needed to determine the emission standards for the engine family. You may specify displacement, maximum engine power, and power density as ranges consistent with the ranges listed in §1042.101. See §1042.140 for descriptions of how to specify per-cylinder displacement, maximum engine power, and power density.
   (5) State: "THIS MARINE ENGINE MEETS THE STANDARDS OF 40 CFR 1042, SUBPART I, FOR [CALENDAR YEAR OF REMANUFACTURE]."
(c) For remanufactured engines that are subject to this subpart as described in §1042.801(a), but are not subject to remanufacturing standards as allowed by §1042.810 or §1042.815, you may voluntarily add a label as specified in paragraphs (a) and (b) of this section, except that the label must omit the standardized designation for the engine family and include the following alternative compliance statement:  "THIS MARINE ENGINE IS NOT SUBJECT TO REMANUFACTURING STANDARDS UNDER 40 CFR 1042, SUBPART I, FOR [CALENDAR YEAR OF REMANUFACTURE]."
(d) You may add information to the emission control information label to identify other emission standards that the engine meets or does not meet (such as international standards). You may also add other information to ensure that the engine will be properly maintained and used.
(e) You may ask us to approve modified labeling requirements in this section if you show that it is necessary or appropriate. We will approve your request if your alternate label is consistent with the intent of the labeling requirements of this section.

85. Section 1042.840 is amended by revising paragraphs (c) and (o) to read as follows:
§1042.840  Application requirements for remanufactured engines.
*	*	*	*	*
(c) Summarize the cost effectiveness analysis used to demonstrate your system will meet the availability criteria of §1042.815.  Identify the maximum allowable costs for vessel modifications to meet the criteria.
*	*	*	*	*
(o) Report all valid test results.  Also indicate whether there are test results from invalid tests or from any other tests of the emission-data engine, whether or not they were conducted according to the test procedures of subpart F of this part.  If you measure CO2, report those emission levels.  We may require you to report these additional test results.  We may ask you to send other information to confirm that your tests were valid under the requirements of this part and 40 CFR part 1065.
*	*	*	*	*

Subpart J -- Definitions and Other Reference Information

86.  Section 1042.901 is amended as follows:
a. By revising the definition of "Designated Compliance Officer".
b. By adding definitions for "Designated Enforcement Officer", "Dual-fuel", and "Flexible-fuel".
c. By revising the definition for "Low-sulfur diesel fuel", "Model year", and "Placed into service".
d. By removing the definition for "Point of first retail sale".
§1042.901  Definitions.
*	*	*	*	*
	Designated Compliance Officer means the Director, Diesel Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov. 
Designated Enforcement Officer means the Director, Air Enforcement Division (2242A), U.S. Environmental Protection Agency, 1200 Pennsylvania Ave., NW.,Washington, DC 20460.
*	*	*	*	*
Dual-fuel means relating to an engine designed for operation on two different fuels but not on a continuous mixture of those fuels.  For purposes of this part, such an engine remains a dual-fuel engine even if it is designed for operation on three or more different fuels.  Note that this definition differs from MARPOL Annex VI.
*	*	*	*	*
Flexible-fuel means relating to an engine designed for operation on any mixture of two or more different fuels.
*	*	*	*	*
	Low-sulfur diesel fuel means one of the following:
(1) For in-use fuels, low-sulfur diesel fuel means a diesel fuel marketed as low-sulfur diesel fuel having a maximum sulfur concentration of 500 parts per million.
(2) For testing, low-sulfur diesel fuel has the meaning given in 40 CFR part 1065.
*	*	*	*	*
	Model year means any of the following:
(1) For freshly manufactured marine engines (see definition of "new marine engine," paragraph (1)), model year means one of the following:
   (i) Calendar year of production.
   (ii) Your annual new model production period if it is different than the calendar year.  This must include January 1 of the calendar year for which the model year is named.  It may not begin before January 2 of the previous calendar year and it must end by December 31 of the named calendar year.  For seasonal production periods not including January 1, model year means the calendar year in which the production occurs, unless you choose to certify the applicable engine family with the following model year.  For example, if your production period is June 1, 2010 through November 30, 2010, your model year would be 2010 unless you choose to certify the engine family for model year 2011.
(2) For an engine that is converted to a marine engine after being certified and placed into service as a motor vehicle engine, a nonroad engine that is not a marine engine, or a stationary engine, model year means the calendar year in which the engine was originally produced.  For an engine that is converted to a marine engine after being placed into service as a motor vehicle engine, a nonroad engine that is not a marine engine, or a stationary engine without having been certified, model year means the calendar year in which the engine becomes a new marine engine.  (See definition of "new marine engine," paragraph (2)).
(3) For an uncertified marine engine excluded under §1042.5 that is later subject to this part 1042 as a result of being installed in a different vessel, model year means the calendar year in which the engine was installed in the non-excluded vessel.   For a marine engine excluded under §1042.5 that is later subject to this part 1042 as a result of reflagging the vessel, model year means the calendar year in which the engine was originally manufactured.  For a marine engine that become new under paragraph (7) of the definition of "new marine engine," model year means the calendar year in which the engine was originally manufactured.  (See definition of "new marine engine," paragraphs (3) and (7).)  
(4) For engines that do not meet the definition of "freshly manufactured" but are installed in new vessels, model year means the calendar year in which the engine is installed in the new vessel (see definition of "new marine engine," paragraph (4)).
(5) For remanufactured engines, model year means the calendar year in which the remanufacture takes place.
(6) For imported engines:
   (i) For imported engines described in paragraph (6)(i) of the definition of "new marine engine," model year has the meaning given in paragraphs (1) through (4) of this definition.
   (ii) For imported engines described in paragraph (6)(ii) of the definition of "new marine engine," model year means the calendar year in which the engine is remanufactured.
   (iii) For imported engines described in paragraph (6)(iii) of the definition of "new marine engine," model year means the calendar year in which the engine is first assembled in its imported configuration, unless specified otherwise in this part or in 40 CFR part 1068. 
   (iv) For imported engines described in paragraph (6)(iv) of the definition of "new marine engine," model year means the calendar year in which the engine is imported. 
(7) [Reserved]
(8) For freshly manufactured vessels, model year means the calendar year in which the keel is laid or the vessel is at a similar stage of construction.  For vessels that become new under paragraph (2) or (3) of the definition of "new vessel" (as a result of modifications), model year means the calendar year in which the modifications physically begin.
*	*	*	*	*
	Placed into service means put into initial use for its intended purpose.  Engines and vessels do not qualify as being "placed into service" based on incidental use by a manufacturer or dealer.
*	*	*	*	*

87.  Section 1042.905 is revised to read as follows:
§1042.905  Symbols, acronyms, and abbreviations.
	The following symbols, acronyms, and abbreviations apply to this part:
ABT
Averaging, banking, and trading.
AECD
auxiliary emission control device.
CFR
Code of Federal Regulations.
CH4
methane.
CO
carbon monoxide.
CO2
carbon dioxide.
cyl
cylinder.
disp.
displacement.
ECA
Emission Control Area.
EEZ
Exclusive Economic Zone.
EPA
Environmental Protection Agency.
FEL
Family Emission Limit.
g
grams.
HC
hydrocarbon.
IMO
International Maritime Organization.
hr
hours.
kPa
kilopascals.
kW
kilowatts.
L
liters.
LTR
Limited Testing Region.
N2O
nitrous oxide.
NARA
National Archives and Records Administration.
NMHC
nonmethane hydrocarbons.
NOx
oxides of nitrogen (NO and NO2).
NTE
not-to-exceed.
PM
particulate matter.
RPM
revolutions per minute.
SAE 
Society of Automotive Engineers.
SCR
selective catalytic reduction.
THC
total hydrocarbon.
THCE
total hydrocarbon equivalent.
ULSD
ultra low-sulfur diesel fuel.
U.S.C.
United States Code.

88.  Section 1042.910 is revised to read as follows:
§1042.910  Reference materials.
Documents listed in this section have been incorporated by reference into this part.  The Director of the Federal Register approved the incorporation by reference as prescribed in 5 U.S.C. 552(a) and 1 CFR part 51.  Anyone may inspect copies at the U.S. EPA, Air and Radiation Docket and Information Center, 1301 Constitution Ave., NW., Room B102, EPA West Building, Washington, DC 20460, (202) 566-1744, or at the National Archives and Records Administration (NARA).  For information on the availability of this material at NARA, call 202-741-6030, or go to: http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html.
(a) IMO material.  This paragraph (a) lists material from the International Maritime Organization that we have incorporated by reference.  Anyone may purchase copies of these materials from the International Maritime Organization, 4 Albert Embankment, London SE1 7SR, United Kingdom, or www.imo.org, or 44-(0)20-7735-7611.  
   (1) MARPOL Annex VI, Regulations for the Prevention of Air Pollution from Ships, Third Edition, 2013, and NOx Technical Code 2008.
      (i) Revised MARPOL Annex VI, Regulations for the Prevention of Pollution from Ships, Third Edition, 2013 ("2008 Annex VI"); IBR approved for §1042.901.
      (ii) NOx Technical Code 2008, Technical Code on Control of Emission of Nitrogen Oxides from Marine Diesel Engines, 2013 Edition, ("NOx Technical Code"); IBR approved for §§1042.104(g), 1042.230(d), 1042.302(c) and (e), 1042.501(g), and 1042.901.
      (iii) Annex 12, Resolution MEPC.251(66) from the Report of the Marine Environment Protection Committee on its Sixty-Sixth Session, April 25, 2014.  This document describes new and revised provisions that are considered to be part of Annex VI and NOx Technical Code 2008 as referenced in paragraphs (a)(1)(i) and (ii) of this section.  IBR approved for §§1042.104(g), 1042.230(d), 1042.302(c) and (e), 1042.501(g), and 1042.901.
   (2) [Reserved]
(b) [Reserved]

89.  Section 1042.915 is revised to read as follows:
§1042.915  Confidential information.
The provisions of 40 CFR 1068.10 apply for information you consider confidential.

90.  Section 1042.925 is revised to read as follows:
§1042.925  Reporting and recordkeeping requirements.
(a) This part includes various requirements to submit and record data or other information. Unless we specify otherwise, store required records in any format and on any media and keep them readily available for eight years after you send an associated application for certification, or eight years after you generate the data if they do not support an application for certification.  You are expected to keep your own copy of required records rather than relying on someone else to keep records on your behalf.  We may review these records at any time.  You must promptly send us organized, written records in English if we ask for them.  We may require you to submit written records in an electronic format.  
(b) The regulations in §1042.255, 40 CFR 1068.25, and 40 CFR 1068.101 describe your obligation to report truthful and complete information.  This includes information not related to certification. Failing to properly report information and keep the records we specify violates 40 CFR 1068.101(a)(2), which may involve civil or criminal penalties.
(c) Send all reports and requests for approval to the Designated Compliance Officer (see §1042.801).
(d) Any written information we require you to send to or receive from another company is deemed to be a required record under this section.  Such records are also deemed to be submissions to EPA.  We may require you to send us these records whether or not you are a certificate holder.
(e) Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq), the Office of Management and Budget approves the reporting and recordkeeping specified in the applicable regulations.  The following items illustrate the kind of reporting and recordkeeping we require for engines and vessels regulated under this part:
(1) We specify the following requirements related to engine certification in this part 1042:
   (i) In §1042.135 we require engine manufacturers to keep certain records related to duplicate labels sent to vessel manufacturers.
   (ii) In §1042.145 we state the requirements for interim provisions.
   (iii) In subpart C of this part we identify a wide range of information required to certify engines.
   (iv) In §§1042.345 and 1042.350 we specify certain records related to production-line testing.
   (v) In subpart G of this part we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various special compliance provisions.
   (vi) In §§1042.725, 1042.730, and 1042.735 we specify certain records related to averaging, banking, and trading.
   (vii) In subpart I of this part we specify certain records related to meeting requirements for remanufactured engines.
(2) We specify the following requirements related to testing in 40 CFR part 1065:
   (i) In 40 CFR 1065.2 we give an overview of principles for reporting information.
   (ii) In 40 CFR 1065.10 and 1065.12 we specify information needs for establishing various changes to published test procedures.
   (iii) In 40 CFR 1065.25 we establish basic guidelines for storing test information.
   (iv) In 40 CFR 1065.695 we identify the specific information and data items to record when measuring emissions.
(3) We specify the following requirements related to the general compliance provisions in 40 CFR part 1068:
   (i) In 40 CFR 1068.5 we establish a process for evaluating good engineering judgment related to testing and certification.
   (ii) In 40 CFR 1068.25 we describe general provisions related to sending and keeping information
   (iii) In 40 CFR 1068.27 we require manufacturers to make engines available for our testing or inspection if we make such a request.
   (iv) In 40 CFR 1068.105 we require vessel manufacturers to keep certain records related to duplicate labels from engine manufacturers.
   (v) In 40 CFR 1068.120 we specify recordkeeping related to rebuilding engines.
   (vi) In 40 CFR part 1068, subpart C, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to various exemptions.
   (vii) In 40 CFR part 1068, subpart D, we identify several reporting and recordkeeping items for making demonstrations and getting approval related to importing engines.
   (viii) In 40 CFR 1068.450 and 1068.455 we specify certain records related to testing production-line engines in a selective enforcement audit.
   (ix) In 40 CFR 1068.501 we specify certain records related to investigating and reporting emission-related defects.
   (x) In 40 CFR 1068.525 and 1068.530 we specify certain records related to recalling nonconforming engines.

91. Appendix II is revised to read as follows:
Appendix II to Part 1042 --  Steady-state Duty Cycles

(a) The following duty cycles apply as specified in §1042.505(b)(1):
   (1) The following duty cycle applies for discrete-mode testing:

                                      E3 
                                   mode No.
                                    Engine
                                    speed[1]
                         Percent of maximum test power
                               Weighting factors
                                       1
                              Maximum test speed
                                      100
                                      0.2
                                       2
                                     91 %
                                      75
                                      0.5
                                       3
                                     80 %
                                      50
                                     0.15
                                       4
                                     63 %
                                      25
                                     0.15
[1]Maximum test speed is defined in 40 CFR part 1065.   Percent speed values are relative to maximum test speed.



   (2) The following duty cycle applies for ramped-modal testing:

                                      RMC
                                     mode
                                 Time in mode
                                   (seconds)
                                    Engine
                                  speed[1,3]
                                     Power
                                (percent)[2,3]
1a Steady-state
                                      229
                              Maximum test speed
                                     100 %
1b Transition
                                      20
                               Linear transition
                          Linear transition in torque
2a Steady-state
                                      166
                                     63 %
                                     25 %
2b Transition
                                      20
                               Linear transition
                          Linear transition in torque
3a Steady-state
                                      570
                                     91 %
                                     75 %
3b Transition
                                      20
                               Linear transition
                          Linear transition in torque
4a Steady-state
                                      175
                                     80 %
                                     50 %
[1]Maximum test speed is defined in 40 CFR part 1065. Percent speed is relative to maximum test speed.
[2]The percent power is relative to the maximum test power.
[3]Advance from one mode to the next within a 20-second transition phase.  During the transition phase, command a linear progression from the torque setting of the current  mode to the torque setting of the next mode, and simultaneously command a similar linear progression for engine speed if there is a change in speed setting.

			

(b) The following duty cycles apply as specified in §1042.505(b)(2):
   (1) The following duty cycle applies for discrete-mode testing:
                                  E5 mode No.
                                    Engine
                                    speed[1]
                        Percent of maximum test power 
                               Weighting factors
                                       1
                              Maximum test speed
                                      100
                                     0.08
                                       2
                                     91 %
                                      75
                                     0.13
                                       3
                                     80 %
                                      50
                                     0.17
                                       4
                                     63 %
                                      25
                                     0.32
                                       5
                                   Warm idle
                                       0
                                      0.3
[1] Maximum test speed is defined in 40 CFR part 1065.   Percent speed values are relative to maximum test speed.


   (2) The following duty cycle applies for ramped-modal testing:
                                      RMC
                                     mode
                                 Time in mode
                                   (seconds)
                                    Engine
                                  speed[1,3]
                                     Power
                                (percent)[2,3]
1a Steady-state
                                      167
                                   Warm idle
                                       0
1b Transition
                                      20
                               Linear transition
                          Linear transition in torque
2a Steady-state
                                      85
                              Maximum test speed
                                     100 %
2b Transition
                                      20
                               Linear transition
                          Linear transition in torque
3a Steady-state
                                      354
                                     63 %
                                     25 %
3b Transition
                                      20
                               Linear transition
                          Linear transition in torque
4a Steady-state
                                      141
                                     91 %
                                     75 %
4b Transition
                                      20
                               Linear transition
                          Linear transition in torque
5a Steady-state
                                      182
                                     80 %
                                     50 %
5b Transition
                                      20
                               Linear transition
                          Linear transition in torque
6  Steady-state
                                      171
                                   Warm idle
                                       0
[1] Maximum test speed is defined in 40 CFR part 1065. Percent speed is relative to maximum test speed.
[2]The percent power is relative to the maximum test power.
[3]Advance from one mode to the next within a 20-second transition phase.  During the transition phase, command a linear progression from the torque setting of the current mode to the torque setting of the next mode, and simultaneously command a similar linear progression for engine speed if there is a change in speed setting.

(c) The following duty cycles apply as specified in §1042.505(b)(3):
   (1) The following duty cycle applies for discrete-mode testing:

                                  E2 mode No.
                                    Engine 
                                   speed[1]
                             Torque (percent)[2] 
                               Weighting factors
                                       1
                                Engine Governed
                                      100
                                      0.2
                                       2
                                Engine Governed
                                      75
                                      0.5
                                       3
                                Engine Governed
                                      50
                                     0.15
                                       4
                                Engine Governed
                                      25
                                     0.15
[1]Speed terms are defined in 40 CFR part 1065.
[2]The percent torque is relative to the maximum test torque as defined in 40 CFR part 1065.


   (2) The following duty cycle applies for ramped-modal testing:

                                      RMC
                                     mode
                                 Time in mode
                                   (seconds)
                                    Engine
                                     speed
                                    Torque
                                 (percent)[1,2]
1a Steady-state
                                      229
                                Engine Governed
                                     100 %
1b Transition
                                      20
                                Engine Governed
                               Linear transition
2a Steady-state
                                      166
                                Engine Governed
                                     25 %
2b Transition
                                      20
                                Engine Governed
                               Linear transition
3a Steady-state
                                      570
                                Engine Governed
                                     75 %
3b Transition
                                      20
                                Engine Governed
                               Linear transition
4a Steady-state
                                      175
                                Engine Governed
                                     50 %
[1]The percent torque is relative to the maximum test torque as defined in 40 CFR part 1065.
[2]Advance from one mode to the next within a 20-second transition phase.  During the transition phase, command a linear progression from the torque setting of the current mode to the torque setting of the next mode.

92. Appendix III is revised to read as follows:
Appendix III to Part 1042 --  Not-to-Exceed Zones

(a) The following definitions apply for this Appendix III:
   (1) Percent power means the percentage of the maximum power achieved at Maximum Test Speed (or at Maximum Test Torque for constant-speed engines).
   (2) Percent speed means the percentage of Maximum Test Speed.
(b) Figure 1 of this Appendix illustrates the default NTE zone for marine engines certified using the duty cycle specified in §1042.505(b)(1), except for variable-speed propulsion marine engines used with controllable-pitch propellers or with electrically coupled propellers, as follows:
   (1) Subzone 1 is defined by the following boundaries:
      (i) Percent power/100  > 0.7 ∙ (percent speed/100)[2.5].
      (ii) Percent power/100  < (percent speed / 90 )[3.5].
      (iii) Percent power/100  > 3.0 ∙ (1 - percent speed/100).
   (2) Subzone 2 is defined by the following boundaries:
      (i) Percent power/100  > 0.7 ∙ (percent speed/100)[2.5].
      (ii) Percent power/100  < (percent speed / 90 )[3.5].
      (iii) Percent power/100  < 3.0 ∙ (1 - percent speed/100).
      (iv) Percent speed  > 70 percent.
   (3) Note that the line separating Subzone 1 and Subzone 2 includes the following endpoints:
      (i) Percent speed = 78.9 percent; Percent power = 63.2 percent.
      (ii) Percent speed = 84.6 percent; Percent power = 46.1 percent.

Figure 1 of Appendix III  --  NTE Zone and Subzones for Propeller-Law Marine Engines


(c) Figure 2 of this Appendix illustrates the default NTE zone for recreational marine engines certified using the duty cycle specified in §1042.505(b)(2), except for variable-speed marine engines used with controllable-pitch propellers or with electrically coupled propellers, as follows:
   (1) Subzone 1 is defined by the following boundaries:
      (i) Percent power/100 > 0.7 ∙ (percent speed/100)[2.5].
      (ii) Percent power/100 < (percent speed / 90 )[3.5].
      (iii) Percent power/100 > 3.0 ∙ (1 - percent speed/100).
      (iv) Percent power < 95 percent.
   (2) Subzone 2 is defined by the following boundaries:
      (i) Percent power/100 > 0.7 ∙ (percent speed/100)[2.5].
      (ii) Percent power/100 < (percent speed / 90 )[3.5].
      (iii) Percent power/100 < 3.0 ∙ (1 - percent speed/100).
      (iv) Percent speed > 70 percent.
   (3) Subzone 3 is defined by the following boundaries:
      (i) Percent power/100 < (percent speed / 90 )[3.5].
      (ii) Percent power > 95 percent.
   (4) Note that the line separating Subzone 1 and Subzone 3 includes a point at Percent speed = 88.7 percent and Percent power = 95.0 percent.  See paragraph (b)(3) of this appendix regarding the line separating Subzone 1 and Subzone 2.

Figure 2 of Appendix III  --  NTE Zone and Subzones for Propeller-Law Recreational Marine Engines


(d) Figure 3 of this Appendix illustrates the default NTE zone for variable-speed marine engines used with controllable-pitch propellers or with electrically coupled propellers that are certified using the duty cycle specified in §1042.505(b)(1), (2), or (3), as follows:
   (1) Subzone 1 is defined by the following boundaries:
      (i) Percent power/100 > 0.7 ∙ (percent speed/100)[2.5].
      (ii) Percent power/100 > 3.0 ∙ (1 - percent speed/100).
      (iii) Percent speed > 78.9 percent.
   (2) Subzone 2a is defined by the following boundaries:
      (i) Percent power/100 > 0.7 ∙ (percent speed/100)[2.5].
      (ii) Percent speed > 70 percent.
      (iii) Percent speed < 78.9 percent, for Percent power > 63.3 percent.
      (iv) Percent power/100 < 3.0 ∙ (1 - percent speed/100), for Percent speed > 78.9 percent.
   (3) Subzone 2b is defined by the following boundaries:
      (i) The line formed by connecting the following two points on a plot of speed-vs.-power:
         (A) Percent speed = 70 percent; Percent power = 28.7 percent.
         (B) Percent power = 40 percent; Speed = governed speed.
      (ii) Percent power/100 < 0.7 ∙ (percent speed/100)[2.5].
   (4) Note that the line separating Subzone 1 and Subzone 2a includes the following endpoints:
      (i) Percent speed = 78.9 percent; Percent power = 63.3 percent.
      (ii) Percent speed = 84.6 percent; Percent power = 46.1 percent.

Figure 3 of Appendix III  --  NTE Zone and Subzones for Variable-Pitch or Electronically Coupled Engines*

*shown for engines capable of operating on the E3 Duty Cycle
(e) Figure 4 of this Appendix illustrates the default NTE zone for constant-speed engines certified using a duty cycle specified in §1042.505(b)(3) or (b)(4), as follows:
   (1) Subzone 1 is defined by the following boundaries:
      (i) Percent power > 70 percent.
      (ii) [Reserved]
   (2) Subzone 2 is defined by the following boundaries:
      (i) Percent power < 70 percent.
      (ii) Percent power > 40 percent.

Figure 4 of Appendix III  --  NTE Zone and Subzones for Constant-Speed Marine Engines


(f) Figure 5 of this Appendix illustrates the default NTE zone for variable-speed auxiliary marine engines certified using the duty cycle specified in §1042.505(b)(5)(ii) or (iii), as follows:
   (1) The default NTE zone is defined by the boundaries specified in 40 CFR 86.1370(b)(1), (2), and (4).
   (2) A special PM subzone is defined in 40 CFR 1039.515(b).

            Figure 5 of Appendix III  --  NTE Zone and Subzones for 
          Variable-Speed Auxiliary Marine Engines (nonpropeller-law)



Part 1065 -- ENGINE-TESTING PROCEDURES
93.      The authority citation for part 1065 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.


§ 1065.15 Overview of procedures for laboratory and field testing.
This section outlines the procedures to test engines that are subject to emission standards.
(a) In the standard-setting part, we set brake-specific emission standards in g/(kW·hr) (or g/(hp·hr)), for the following constituents:
(1) Total oxides of nitrogen, NOx.
(2) Hydrocarbons, HC, which may be expressed in the following ways:
(i) Total hydrocarbons, THC.
(ii) Nonmethane hydrocarbons, NMHC, which results from subtracting methane, CH4, from THC.  You may choose to measure NMOG emissions to demonstrate compliance with NMHC standards.
(iii) Total hydrocarbon-equivalent, THCE, which results from adjusting THC mathematically to be equivalent on a carbon-mass basis.
(iv) Nonmethane hydrocarbon-equivalent, NMHCE, which results from adjusting NMHC mathematically to be equivalent on a carbon-mass basis.  You may choose to measure NMOG emissions to demonstrate compliance with NMHCE standards.


Subpart F -- Performing an Emission Test in the Laboratory

94. Section 1065.510 is amended by revising paragraphs (c) and (d)(5)(iii) to read as follows:
§ 1065.510 Engine mapping.
*	*	*	*	*
(c) Negative torque mapping.  If your engine is subject to a reference duty cycle that specifies negative torque values (i.e., engine motoring), generate a motoring torque curve by any of the following procedures:
*	*	*
(d)	*	*	* 
(5)	*	*	*
(iii) For any isochronous governed (0 % speed droop) constant-speed engine, you may map the engine with two points as described in this paragraph (d)(5)(iii).  After stabilizing at the no-load governed speed in paragraph (d)(4) of this section, record the mean feedback speed and torque.  Continue to operate the engine with the governor or simulated governor controlling engine speed using operator demand, and control the dynamometer to target a speed of 99.5 % of the recorded mean no-load governed speed.  Allow speed and torque to stabilize.  Record the mean feedback speed and torque.  Record the target speed.  The absolute value of the speed error (the mean feedback speed minus the target speed) must be no greater than 0.1 % of the recorded mean no-load governed speed.  From this series of two mean feedback speed and torque values, use linear interpolation to determine intermediate values.  Use this series of two mean feedback speeds and torques to generate a power map as described in paragraph (e) of this section.  Note that the measured maximum test torque as determined in § 1065.610(b)(1) will be the mean feedback torque recorded on the second point.
*	*	*	*	*

Subpart G -- Calculations and Data Requirements

95. Section 1065.610 is amended by revising paragraphs (a)(1)(ii), (iii) and (vi) and (b), and (c)(1) and (2) to read as follows:
§ 1065.610 Duty cycle generation.
*	*	*	*	*
(a)	*	*	*
(1) 	*	*	*
(ii) Determine the lowest and highest engine speeds corresponding to 98 % of Pmax, using linear interpolation, and no extrapolation, as appropriate.
(iii) Determine the engine speed corresponding to maximum power, fnPmax, by calculating the average of the two speed values from paragraph (a)(1)(ii) of this section.  If there is only one speed where power is equal to 98 % of Pmax, take fnPmax as the speed at which Pmax occurs.
*	*	*
(vi) Determine the lowest and highest engine speeds corresponding to the value calculated in paragraph (a)(1)(v) of this section, using linear interpolation as appropriate.  Calculate fntest as the average of these two speed values.  If there is only one speed corresponding to the value calculated in paragraph (a)(1)(v) of this section, take fntest as the speed where the maximum of the sum of the squares occurs.
(b) Maximum test torque, Ttest.  For constant-speed engines, determine the measured Ttest from the torque and power-versus-speed maps, generated according to § 1065.510, as follows:
(1) For constant speed engines mapped using the methods in § 1065.510(d)(5)(i) or (ii), determine Ttest as follows:
(i) Determine maximum power, Pmax, from the engine map generated according to § 1065.510 and calculate the value for power equal to 98 % of Pmax.  
(ii) Determine the lowest and highest engine speeds corresponding to 98 % of Pmax, using linear interpolation, and no extrapolation,  as appropriate.
(iii) Determine the engine speed corresponding to maximum power, fnPmax, by calculating the average of the two speed values from paragraph (a)(1)(ii) of this section.  If there is only one speed where power is equal to 98 % of Pmax, take fnPmax as the speed at which Pmax occurs.
(iv) Transform the map into a normalized power-versus-speed map by dividing power terms by Pmax and dividing speed terms by fnPmax.  Use the Equation 1065.610-1 to calculate a quantity representing the sum of squares from the normalized map.
(v) Determine the maximum value for the sum of the squares from the map and multiply that value by 0.98.  
(vi) Determine the lowest and highest engine speeds corresponding to the value calculated in paragraph (a)(1)(v) of this section, using linear interpolation as appropriate.  Calculate fntest as the average of these two speed values.  If there is only one speed corresponding to the value calculated in paragraph (a)(1)(v) of this section, take fntest as the speed where the maximum of the sum of the squares occurs.
(vii) The measured Ttest is the mapped torque at fntest.
(2) For constant speed engines using the two point mapping method in §1065.510(d)(5)(iii), you may follow paragraph (a)(1) of this section to determine the measured Ttest, or you may use the measured torque of the second point as the measured Ttest directly.
(3) Transform normalized torques to reference torques according to paragraph (d) of this section by using the measured maximum test torque determined according to paragraph (b)(1) of this section -- or use your declared maximum test torque, as allowed in § 1065.510.
(c)	*	*	*
(1) % speed.  If your normalized duty cycle specifies % speed values, use your warm idle speed and your maximum test speed to transform the duty cycle, as follows:
fnref = % speed ∙ (fntest  -  fnidle) + fnidle
                  Eq. 1065.610-3
Example:
% speed = 85 %
fntest = 2364 r/min
fnidle = 650 r/min
fnref = 85 % ∙ (2364  -  650 ) + 650
fnref = 2107 r/min 
(2) A, B, and C speeds.  If your normalized duty cycle specifies speeds as A, B, or C values, use your power-versus-speed curve to determine the lowest speed below maximum power at which 50 % of maximum power occurs.  Denote this value as nlo.  Take nlo to be warm idle speed if all power points at speeds below the maximum power speed are higher than 50 % of maximum power.  Also determine the highest speed above maximum power at which 70 % of maximum power occurs.  Denote this value as nhi.  If all power points at speeds above the maximum power speed are higher than 70% of maximum power, take nhi to be the declared maximum safe engine speed or the declared maximum representative engine speed, whichever is lower.  Use nhi and nlo to calculate reference values for A, B, or C speeds as follows:
fnrefA = 0.25 ∙ (nhi  -  nlo) + nlo
                  Eq. 1065.610-4
fnrefB = 0.50 ∙ (nhi  -  nlo) + nlo
                  Eq. 1065.610-5
fnrefC = 0.75 ∙ (nhi  -  nlo) + nlo
                  Eq. 1065.610-6
Example:
nlo = 1005 r/min
nhi = 2385 r/min
fnrefA = 0.25 ∙ (2385  -  1005) + 1005
fnrefB = 0.50 ∙ (2385  -  1005) + 1005
fnrefC = 0.75 ∙ (2385  -  1005) + 1005
fnrefA = 1350 r/min
fnrefB = 1695 r/min
fnrefC = 2040 r/min
*	*	*	*	*

96. Section 1065.655 is amended by revising paragraph (d)(1) to read as follows:
§ 1065.655 Chemical balances of fuel, intake air, and exhaust.
*	*	*	*	*
(d)	*	*	*
(1) You may calculate wC as described in this paragraph (d)(1) based on measured fuel properties.  To do so, you must determine values for  and  in all cases, but you may set  and  to zero if the default value listed in Table 1 of this section is zero.  Calculate wC using the following equation:

                  Eq. 1065.655-19
Where:
wC = carbon mass fraction of fuel.
MC = molar mass of carbon.
 = atomic hydrogen-to-carbon ratio of the mixture of fuel(s) being combusted, weighted by molar consumption.
MH = molar mass of hydrogen.
 = atomic oxygen-to-carbon ratio of the mixture of fuel(s) being combusted, weighted by molar consumption.
MO = molar mass of oxygen.
= atomic sulfur-to-carbon ratio of the mixture of fuel(s) being combusted, weighted by molar consumption.
MS = molar mass of sulfur.
= atomic nitrogen-to-carbon ratio of the mixture of fuel(s) being combusted, weighted by molar consumption.
MN = molar mass of nitrogen.

Example:
 = 1.8
 = 0.05
= 0.0003
= 0.0001
MC = 12.0107
MH = 1.00794
MO = 15.9994
MS = 32.065
MN = 14.0067

wC = 0.8206
*	*	*	*	*

97. A new §1065.680 is added to subpart G to read as follows:
§1065.680 Adjusting emission levels to account for infrequently regenerating aftertreatment devices.
This section describes how to calculate adjusted emission results from engines using aftertreatment technology with infrequent regeneration events that may occur during testing.  These emission adjustments generally apply for all testing related to demonstrating compliance with emission standards.  For this section, "regeneration" means an intended event during which emission levels change while the system restores aftertreatment performance.  For example, exhaust gas temperatures may increase temporarily to remove sulfur from adsorbers or to oxidize accumulated particulate matter in a trap.  Also, "infrequent" refers to regeneration events that are expected to occur on average less than once over a transient duty cycle or ramped-modal cycle, or on average less than once per mode in a discrete-mode test. 
(a) Applying adjustment factors.  Apply adjustment factors based on whether there is active regeneration during the test segment.  You must be able to identify active regeneration in a way that is readily apparent during all testing.
(1) If active regeneration does not occur during a test segment, determine an upward adjustment factor, UAF, that will be added to the measured emission rate for that test segment using the following equation:
UAF[cycle] = EFA[cycle] − EFL[cycle]
			Eq. 1065.680-1
Where:
EFA[cycle] = the average emission factor over the duty-cycle as determined in paragraph (a)(4) of this section.
EFL[cycle] = measured emissions over the duty-cycle from a complete test segment in which active regeneration does not occur.

Example:
EFASET = 0.14 g/kW∙hr
EFLSET = 0.11 g/kW∙hr
UAFSET = 0.14 − 0.11 = 0.03 g/kW∙hr
(2) If active regeneration occurs or starts to occur during a test segment, determine a downward adjustment factor, DAF, that will be subtracted from the measured emission rate for that test segment using the following equation:
DAF[cycle] = EFH[cycle] − EFA[cycle]
			Eq. 1065.680-2
Where:
EFH[cycle] = measured emissions over the duty-cycle from a test segment corresponding to a complete regeneration event, or the average emission rate over multiple complete test segments with regeneration if the complete regeneration event lasts longer than one test segment.

Example:
EFASET = 0.14 g/kW∙hr
EFHSET = 0.50 g/kW∙hr
DAFSET = 0.50 − 0.14 = 0.36 g/kW∙hr

(3) Note that emissions for a given pollutant may be lower during regeneration, in which case EFL would be greater than EFH, and both UAF and DAF would be negative.
(4) Calculate the average emission factor, EFA, as follows:
EFA[cycle] = F ∙ EFH[cycle] + (1.00  -  F) ∙ EFL[cycle]
			Eq. 1065.680-3
Where:
F = the frequency of the regeneration event during normal in-use operation, expressed in terms of the fraction of equivalent tests (or equivalent test segments) during which active regeneration occurs, as described in paragraph (a)(5) through (7) of this section.

Example:
F = 0..08 (active regeneration is triggered once for every ten test segments)
EFASET = 0.08 ∙ 0.50 + (1.00 − 0.08) ∙ 0.11 = 0.14 g/kW∙hr
(5) If your engine is subject to certification over both transient and steady-state duty-cycles, see the standard setting part for weighting factors to determine a composite frequency of regeneration, Fcomp.  Determine Fcomp as follows:
Fcomposite = F[transient] ∙ WF[transient] + F[steady-state] ∙ WF[steady-state]

Where:
WF = weighting factor for the duty-cycle as defined in the standard-setting part.

Example:
FHDDE-FTP = 0.02
WFHDDE-FTP = 25% = 0.25 (from 40 CFR 86.004-28(i)(1)(iii)(A))
FRMC = 0.10
WFRMC = 75% = 0.75 (from 40 CFR 86.004-28(i)(1)(iii)(A))
Fcomposite = 0.02 ∙ 0.25 + 0.10 ∙ 0.75 = 0.08
(6) The frequency of regeneration, F, generally characterizes how often a regeneration event occurs relative to a number of test segments.  In the case of discrete-mode testing, a "test segment" involves a fixed duration of engine operation in a given test mode; this may alternatively be expressed as the time for a complete regeneration event in the test mode.  Determine F as follows:

			Eq. 1065.680-4
Where:
ir = the number of test segments in which active regeneration occurs, rounded up to the next whole number
if = the number of test segments from the end of one complete regeneration event to the start of the next active regeneration, without rounding. 

Example:
ir = 2
if = 17.86

(7) Use good engineering judgment to determine ir and if.  The following examples demonstrate cases where ir and if are calculated based on an engine ECM timer or based on in-use data:
(i) The engine ECM is programmed to trigger the regeneration of a PM filter 300 minutes after the end of the last regeneration event and the regeneration lasts 15 minutes.
For the 20 minute FTP cycle: ir = 1 (15 minute regeneration time rounded up to the nearest whole FTP cycle); if = 300/20 = 15 FTPs to fill the filter.
For the 28 minute RMC cycle: ir = 1 (15 minute regeneration time rounded up to the nearest whole SET cycle); if = 300/28 = 10.71 RMCs to fill the filter.
(ii) In-use data indicates that regeneration occurs every 500 minutes and the regeneration lasts 30 minutes.
For the 20 minute FTP cycle: ir = 2 (30 minute regeneration time rounded up to the nearest whole FTP cycle); if = 500/20 = 25 FTPs to fill the filter.
For the 28 minute RMC cycle: ir = 2 (30 minute regeneration time rounded up to the nearest whole SET cycle); if = 500/28 = 17.86 RMCs to fill the filter.
(b) Develop adjustment factors for test segments for different types of testing as follows:
(1) Discrete-mode testing.  Develop separate adjustment factors for each test mode of a discrete-mode test.  If a regeneration event has started but is not complete when you reach the end of the sampling time for a test mode, extend the sampling period for that test mode until the regeneration event is complete.
(2) Ramped-modal and transient testing.  Develop a separate set of adjustment factors for an entire ramped-modal test or an entire transient test interval.  If a regeneration event has started but is not complete when you reach the end of the test or test interval, use good engineering judgment to reduce your downward adjustment for each pollutant to be proportional to the emission impact that occurred.
(c) If an engine has different regeneration cycles and electronic signals for different pollutants, calculate and apply adjustment factors under this section separately for each type of regeneration.

98. Section 1065.1005 is amended by revising paragraph (f)(2) to read as follows:
§ 1065.1005 Symbols, abbreviations, acronyms, and units of measure.
*	*	*	*	*
(f)	*	*	*
(2) This part uses the following molar masses or effective molar masses of chemical species:
                                    Symbol
                                   Quantity
                                     g/mol
                             (10[-3]·kg·mol[-1])
Mair
molar mass of dry air[1]
28.96559
MAr
molar mass of argon
39.948
MC
molar mass of carbon
12.0107
MCH3OH
molar mass of methanol
32.04186
MC2H5OH
molar mass of ethanol
46.06844
MC2H4O
molar mass of acetaldehyde
44.05256
MC2H4N2O
molar mass of urea
44.05526
MC3H8
molar mass of propane
44.09562
MC3H7OH
molar mass of propanol
60.09502
MCO
molar mass of carbon monoxide
28.0101
MCH4
molar mass of methane
16.0425
MCO2
molar mass of carbon dioxide
44.0095
MH
molar mass of atomic hydrogen
1.00794
MH2
molar mass of molecular hydrogen
2.01588
MH2O
molar mass of water
18.01528
MCH2O
molar mass of formaldehyde
30.02598
MHe
molar mass of helium
4.002602
MN
molar mass of atomic nitrogen
14.0067
MN2
molar mass of molecular nitrogen
28.0134
MNH3
molar mass of ammonia
17.03052
MNMHC
effective C1 molar mass of nonmethane hydrocarbon[2]
13.875389
MNMHCE
effective C1 molar mass of nonmethane hydrocarbon equivalent[2]
13.875389
MNOx
effective molar mass of oxides of nitrogen[3]
46.0055
MN2O
molar mass of nitrous oxide
44.0128
MO
molar mass of atomic oxygen
15.9994
MO2
molar mass of molecular oxygen
31.9988
MS
molar mass of sulfur
32.065
MTHC
effective C1 molar mass of total hydrocarbon[2]
13.875389
MTHCE
effective C1 molar mass of total hydrocarbon equivalent[2]
13.875389
[1]See paragraph (f)(1) of this section for the composition of dry air.
[2]The effective molar masses of THC, THCE, NMHC, and NMHCE are defined on a C1 basis and are based on an atomic hydrogen-to-carbon ratio, , of 1.85 (with β, γ, and δ equal to zero).
[3]The effective molar mass of NOx is defined by the molar mass of nitrogen dioxide, NO2.



Part 1066 -- VEHICLE-TESTING PROCEDURES
99.      The authority citation for part 1066 continues to read as follows:
Authority: 42 U.S.C. 7401-7671q.

Subpart B -- Equipment, Measurement Instruments, Fuel, and Analytical Gas Specifications

100.   Section 1066.110 is amended by adding paragraph (b)(2)(iii)(C) to read as follows:
§ 1066.110 Equipment specifications for emission sampling systems.
*	*	*	*	*
(b)	*	*	*
(2)	*	*	*
(iii)	*	*	*
(C) For PM tests run using a single filter per test set up, the residence time requirements in 40 CFR 1065.140(e)(3) only needs to be met on the phase with the highest flow rate.
*	*	*	*	*

Subpart C -- Dynamometer Specifications

101.   Section 1066.210 is amended by revising paragraph (d)(3) to read as follows:
§ 1066.210 Dynamometers.
*	*	*	*	*
(d)	*	*	*
(3) The load applied by the dynamometer simulates forces acting on the vehicle during normal driving according to the following equation:


		Eq. 1066.210-1

Where:
FR = total road-load force to be applied at the surface of the roll.  The total force is the sum of the individual tractive forces applied at each roll surface.
i = a counter to indicate a point in time over the driving schedule.  For a dynamometer operating at 10-Hz intervals over a 600-second driving schedule, the maximum value of i should be 6,000.
A = a vehicle-specific constant value representing the vehicle's frictional load in lbf or newtons.  See subpart D of this part.
θ = the road grade in degrees.  , where Δh is the total rise and d is the distance traveled.
B = a vehicle-specific coefficient representing load from drag and rolling resistance, which are a function of vehicle speed, in lbf/mph or N∙s/m.  See subpart D of this part.
v = linear speed at the roll surfaces as measured by the dynamometer, in mph or m/s.  Let vi-1 = 0 for i = 0.
C = a vehicle-specific coefficient representing aerodynamic effects, which are a function of vehicle speed squared, in lbf/mph[2] or N∙s[2]/m[2].  See subpart D of this part.
M = mass of the vehicle in lbm or kg based on its test weight, including the effect of rotating axles as specified in § 1066.310(b)(7), divided by the acceleration due to gravity as specified in 40 CFR 1065.630.  
t = elapsed time in the driving schedule as measured by the dynamometer, in seconds.  Let ti-1 = 0 for i = 0.
g = gravitational acceleration = 9.81 m/s[2].
*	*	*	*	*

Subpart D -- Coastdown

102.   Section 1066.301 is amended by adding introductory text to read as follows:
§ 1066.301 Overview of road-load determination procedures.
Vehicle testing on a chassis dynamometer involves simulating the road-load force, which is the sum of forces acting on a vehicle from aerodynamic drag, tire rolling resistance, driveline losses, and other effects of friction.  Determine dynamometer settings to simulate road-load force in two stages.  First, perform a road-load force specification by characterizing on-road operation.  Second, perform a road-load derivation to determine the appropriate dynamometer load settings to simulate the road-load force specification from the on-road test. 
*	*	*	*	*

103.   Section 1066.310 is amended by revising paragraph (b)(7)(ii)(D) to read as follows:
§ 1066.310 Coastdown procedures for vehicles above 14,000 pounds GVWR.
*	*	*	*	*
(b)	*	*	*
(7)	*	*	*
(ii)	*	*	*
(D) Plot the data from all the coastdown runs on a single plot of Fi vs. vi[2] to determine the slope correlation, D, based on the following equation:
Fi-MegΔhΔs=Am+Dvi2Fi-MegΔhΔs=Am+Dvi2
      Eq. 1066.310-2
Where:
M = the measured vehicle mass.
g = gravitational acceleration = 9.81 m/s[2].
Δh = change in elevation over the measurement interval, in m.  Assume Δh = 0 if you are not correcting for grade.  
Δs = distance the vehicle travels down the road during the measurement interval, in m.
Am = the calculated value of the y-intercept based on the curve-fit.
*	*	*	*	*
 = mean ambient absolute temperature during testing, in K.
 = average ambient pressuring during the test, in kPa.


104. Part 1068 is revised to read as follows:

PART 1068 --  GENERAL COMPLIANCE PROVISIONS FOR HIGHWAY, STATIONARY, AND NONROAD PROGRAMS
Subpart A -- Overview and Applicability	838
Subpart B -- Emission Standards and Related Requirements	838
1033.102  Transition to the standards of this part.	838
Subpart C -- Certifying Engine Families	839
1033.201  General requirements for obtaining a certificate of conformity.	839
1033.225  Amending applications for certification.	840
1033.245  Deterioration factors.	840
1033.520  Alternative ramped modal cycles.	843
1042.705  Generating and calculating emission credits.	1039
Subpart A -- Overview and Applicability	1044
1042.1  Applicability.	1044
1042.2  Who is responsible for compliance?	1044
1042.30 Submission of information.	1045
Subpart B -- Emission Standards and Related Requirements	1045
1042.101  Exhaust emission standards.	1045
1042.104  Exhaust emission standards for Category 3 engines.	1051
1042.110  Recording reductant use and other diagnostic functions.	1051
1042.120  Emission-related warranty requirements.	1052
1042.125  Maintenance instructions.	1052
1042.130  Installation instructions for vessel manufacturers.	1053
1042.135  Labeling.	1053
1042.140  Maximum engine power, displacement, power density, and maximum in-use engine speed.	1055
1042.201  General requirements for obtaining a certificate of conformity.	1055
1042.205  Application requirements.	1055
1042.225  Amending applications for certification.	1056
1042.235  Emission testing related to certification.	1057
1042.240  Demonstrating compliance with exhaust emission standards.	1057
1042.250  Recordkeeping and reporting.	1057
1042.255  EPA decisions.	1058
1042.302  Applicability of this subpart for Category 3 engines.	1058
Subpart F -- Test Procedures	1059
1042.501  How do I run a valid emission test?	1059
1042.505  Testing engines using discrete-mode or ramped-modal duty cycles.	1059
1042.515  Test procedures related to not-to-exceed standards.	1059
1042.525  How do I adjust emission levels to account for infrequently regenerating aftertreatment devices?	1060
1042.601  General compliance provisions for marine engines and vessels.	1061
1042.605  Dressing engines already certified to other standards for nonroad or heavy-duty highway engines for marine use.	1061
1042.610  Certifying auxiliary marine engines to land-based standards.	1062
1042.630  Personal-use exemption.	1062
1042.635  National security exemption.	1062
1042.650  Migratory vessels.	1062
1042.655  Special certification provisions for - Category 3 engines with aftertreatment.	1063
1042.660  Requirements for vessel manufacturers, owners, and operators.	1063
1042.670  Special provisions for gas turbine engines.	1064
1042.701  General provisions.	1064
1042.705  Generating and calculating emission credits.	1064
1042.710  Averaging emission credits.	1065
1042.725  Information required for the application for certification.	1065
1042.730  ABT reports.	1065
1042.735  Recordkeeping.	1066
1042.830  Labeling.	1066
1042.840  Application requirements for remanufactured engines.	1067
1042.901  Definitions.	1068
1042.905  Symbols, acronyms, and abbreviations.	1069
1042.910  Reference materials.	1070
1042.915  Confidential information.	1071
1042.925  Reporting and recordkeeping requirements.	1071
Appendix II to Part 1042 --  Steady-state Duty Cycles	1072
Appendix III to Part 1042 --  Not-to-Exceed Zones	1075
Subpart A -- Applicability and Miscellaneous Provisions	1095
1068.1  Does this part apply to me?	1095
1068.2  How does this part apply for engines and how does it apply for equipment?	1097
1068.5  How must manufacturers apply good engineering judgment?	1097
1068.10  What provisions apply to confidential information?	1098
1068.15  What general provisions apply for EPA decision-making?	1098
1068.20  May EPA enter my facilities for inspections?	1099
1068.25  What information must I give to EPA?	1099
1068.27  May EPA conduct testing with my production engines/equipment?	1100
1068.30  What definitions apply to this part?	1100
1068.31  What provisions apply to nonroad or stationary engines that change their status?	1106
1068.40  What special provisions apply for implementing changes in the regulations?	1109
1068.45  General  labeling provisions.	1110
1068.95  What materials does this part reference?	1111
Subpart B -- Prohibited Actions and Related Requirements	1112
1068.101  What general actions does this regulation prohibit?	1112
1068.103 What are the provisions related to the duration and applicability of certificates of conformity?	1116
1068.105  What other provisions apply to me specifically if I manufacture equipment needing certified engines?	1119
1068.110  What other provisions apply to engines/equipment in service?	1120
1068.115  When must manufacturers honor emission-related warranty claims?	1121
1068.120  What requirements must I follow to rebuild engines?	1121
1068.125  What happens if I violate the regulations?	1123
Subpart C --  Exemptions and Exclusions	1125
1068.201  Does EPA exempt or exclude any engines/equipment from the prohibited acts?	1125
1068.210  What are the provisions for exempting test engines/equipment?	1126
1068.215  What are the provisions for exempting manufacturer-owned engines/equipment?	1127
1068.220  What are the provisions for exempting display engines/equipment?	1128
1068.225  What are the provisions for exempting engines/equipment for national security?	1128
1068.230  What are the provisions for exempting engines/equipment for export?	1129
1068.235  What are the provisions for exempting engines/equipment used solely for competition?	1130
1068.240  What are the provisions for exempting new replacement engines?	1130
1068.245  What temporary provisions address hardship due to unusual circumstances?	1135
1068.250 What are the provisions for extending compliance deadlines for small businesses under hardship?	1136
1068.255  What are the provisions for exempting engines and fuel-system components for hardship for equipment manufacturers and secondary engine manufacturers?	1138
1068.260  What general provisions apply for selling or shipping engines that are not yet in their certified configuration?	1139
1068.261  What provisions apply for selling or shipping certified engines that are not yet in the certified configuration?	1141
1068.262  What are the provisions for temporarily exempting engines for shipment to secondary engine manufacturers?	1145
1068.265  What provisions apply to engines/equipment that are conditionally exempted from certification?	1147
Subpart D -- Imports	1148
1068.305  How do I get an exemption or exclusion for imported engines/equipment?	1149
1068.325  What are the temporary exemptions for imported engines/equipment?	1151
1068.360 What restrictions apply to assigning a model year to imported engines and equipment?	1153
Subpart E -- Selective Enforcement Auditing	1154
1068.401  What is a selective enforcement audit?	1154
1068.405  What is in a test order?	1154
1068.410  How must I select and prepare my engines/equipment?	1155
1068.415  How do I test my engines/equipment?	1156
1068.420  How do I know when my engine family fails an SEA?	1157
1068.425  What happens if one of my production-line engines/equipment exceeds the emission standards?	1157
1068.430  What happens if a family fails an SEA?	1158
1068.435  May I sell engines/equipment from a family with a suspended certificate of conformity?	1158
1068.440  How do I ask EPA to reinstate my suspended certificate?	1158
1068.445  When may EPA revoke my certificate under this subpart and how may I sell these engines/equipment again?	1158
1068.450  What records must I send to EPA?	1159
1068.455  What records must I keep?	1159
Appendix A to Subpart E of Part 1068 -- Plans for Selective Enforcement Auditing	1160
Subpart F -- Reporting Defects and Recalling Engines/Equipment	1162
1068.501  How do I report emission-related defects?	1162
1068.505  How does the recall program work?	1166
1068.510  How do I prepare and apply my remedial plan?	1167
1068.515  How do I mark or label repaired engines/equipment?	1168
1068.520  How do I notify affected owners?	1168
1068.525  What records must I send to EPA?	1169
1068.530  What records must I keep?	1169
1068.535  How can I do a voluntary recall for emission-related problems?	1170
Appendix I to Part 1068 -- Emission-Related Components	1174
Appendix II to Part 1068 -- Emission-Related Parameters and Specifications	1175
Appendix III to Part 1068 --  High-Altitude Counties	1177
   
Authority:  42 U.S.C. 7401-7671q.
Subpart A -- Applicability and Miscellaneous Provisions


§1068.1  Does this part apply to me?
(a) The provisions of this part apply to everyone with respect to the engine and equipment categories as described in this paragraph (a).  They apply to everyone, including owners, operators, parts manufacturers, and persons performing maintenance.  Where we identify an engine category, the provisions of this part also apply with respect to the equipment using such engines. This part 1068 applies to different engine and equipment categories as follows:
   (1) This part 1068 applies to motor vehicles we regulate under 40 CFR part 86, subpart S, to the extent and in the manner specified in 40 CFR parts 85 and 86.
   (2) This part 1068 applies for heavy-duty motor vehicles certified under 40 CFR part 1037, subject to the provisions of 40 CFR parts 85 and 1037.  This part 1068 applies to other heavy-duty motor vehicles and motor vehicle engines to the extent and in the manner specified in 40 CFR parts 85, 86, and 1036. 
   (3) This part 1068 applies to highway motorcycles we regulate under 40 CFR part 86, subparts E and F, to the extent and in the manner specified in 40 CFR parts 85 and 86.
   (4) This part 1068 applies to aircraft we regulate under 40 CFR part 87 to the extent and in the manner specified in 40 CFR part 87.
   (5) This part 1068 applies for locomotives, subject to the provisions of 40 CFR part 1033.  This part 1068 does not apply for locomotives or locomotive engines that were originally manufactured before July 7, 2008, and that have not been remanufactured on or after July 7, 2008.
   (6) This part 1068 applies for land-based nonroad compression-ignition engines, subject to the provisions of 40 CFR part 1039.  This part 1068 does not apply for engines certified under 40 CFR part 89.
   (7) This part 1068 applies for stationary compression-ignition engines certified using the provisions of 40 CFR parts 89, 94, 1039, and 1042 as described in 40 CFR part 60, subpart IIII.
   (8) This part 1068 applies for marine compression-ignition engines, subject to the provisions of 40 CFR part 1042.  This part 1068 does not apply for marine compression-ignition engines certified under 40 CFR part 94.
   (9) This part 1068 applies for marine spark-ignition engines, subject to the provisions of 40 CFR part 1045.  This part 1068 does not apply for marine spark-ignition engines certified under 40 CFR part 91.
   (10) This part 1068 applies for large nonroad spark-ignition engines, subject to the provisions of 40 CFR part 1048.
   (11) This part 1068 applies for stationary spark-ignition engines certified using the provisions of 40 CFR part 1048 or part 1054, as described in 40 CFR part 60, subpart JJJJ.
   (12) This part 1068 applies for recreational engines and vehicles, including snowmobiles, off-highway motorcycles, and all-terrain vehicles, subject to the provisions of 40 CFR part 1051.
   (13) This part applies for small nonroad spark-ignition engines, subject to the provisions of 40 CFR part 1054.  This part 1068 does not apply for nonroad spark-ignition engines certified under 40 CFR part 90.
   (14) This part applies for fuel-system components installed in nonroad equipment powered by volatile liquid fuels, subject to the provisions of 40 CFR part 1060.
   (b) [Reserved]
(c) Paragraph (a) of this section identifies the parts of the CFR that define emission standards and other requirements for particular types of engines and equipment. This part 1068 refers to each of these other parts generically as the "standard-setting part." For example, 40 CFR part 1051 is always the standard-setting part for snowmobiles. Follow the provisions of the standard-setting part if they are different than any of the provisions in this part.
(d)  Specific provisions in this part 1068 start to apply separate from the schedule for certifying engines/equipment to new emission standards, as follows:
   (1) The provisions of §§1068.30 and 1068.310 apply for stationary spark-ignition engines built on or after January 1, 2004, and for stationary compression-ignition engines built on or after January 1, 2006.
   (2) The provisions of §§1068.30 and 1068.235 apply for the types of engines/equipment listed in paragraph (a) of this section beginning January 1, 2004, if they are used solely for competition.
   (3) The standard-setting part may specify how the provisions of this part 1068 apply for uncertified engines/equipment.  

§1068.2  How does this part apply for engines and how does it apply for equipment?
(a) See the standard-setting part to determine if engine-based and/or equipment-based standards apply.  (Note: Some equipment is subject to engine-based standards for exhaust emission and equipment-based standards for evaporative emissions.)
(b) The provisions of this part apply differently depending on whether the engine or equipment is required to be certified.  
   (1) Subpart A and subpart B of this part apply to engines and equipment, without regard to which is subject to certification requirements in the standard-setting part.
   (2) Subparts C, D, and E of this part apply to the engines or to the equipment, whichever is subject to certification requirements in the standard-setting part.
   (3) Subpart F of this part generally applies to the engines or to the equipment, whichever is subject to standards under the standard-setting part.  However, since subpart F of this part addresses in-use engines and equipment (in which the engine is installed in the equipment), the requirements do not always distinguish between engines and equipment.  
(c) For issues related to testing, read the term "engines/equipment" to mean engines for engines subject to engine-based testing and equipment for equipment subject to equipment-based testing; otherwise, read the term "engines/equipment" to mean engines for sources subject to engine-based standards and equipment for sources subject to equipment-based standards.
(d) When we use the term engines (rather than engines/equipment), read it to mean engines without regard to whether the source is subject to engine-based standards or testing.  When we use the term equipment (rather than engines/equipment), read it to mean equipment without regard to whether the source is subject to equipment-based standards or testing.   (Note: The definition of "equipment" in §1068.30 includes the engine.)
(e) The terminology convention described in this section is not intended to limit our authority or your obligations under the Clean Air Act.

§1068.5  How must manufacturers apply good engineering judgment?
(a) You must use good engineering judgment for decisions related to any requirements under this chapter.  This includes your applications for certification, any testing you do to show that your certification, production-line, and in-use engines/equipment comply with requirements that apply to them, and how you select, categorize, determine, and apply these requirements.
(b)  If we send you a written request, you must give us a written description of the engineering judgment in question.  Respond within 15 working days of receiving our request unless we allow more time. 
(c)  We may reject your decision if it is not based on good engineering judgment or is otherwise inconsistent with the requirements that apply, based on the following provisions:
   (1)  We may suspend, revoke, or void a certificate of conformity if we determine you deliberately used incorrect information or overlooked important information, that you did not decide in good faith, or that your decision was not rational.
   (2)  If we believe a different decision would better reflect good engineering judgment, but none of the provisions of paragraph (c)(1) of this section apply, we will tell you of our concern (and its basis).  You will have 30 days to respond to our concerns, or more time if we agree that you need it to generate more information.  After considering your information, we will give you a final ruling.  If we conclude that you did not use good engineering judgment, we may reject your decision and apply the new ruling to similar situations as soon as possible.
(d)  We will tell you in writing of the conclusions we reach under paragraph (c) of this section and explain our reasons for them.
(e)  If you disagree with our conclusions, you may file a request for a hearing with the Designated Compliance Officer as described in subpart G of this part.  In your request, specify your objections, include data or supporting analysis, and get your authorized representative's signature.  If we agree that your request raises a substantial factual issue, we will hold the hearing according to subpart F of this part.

§1068.10  Confidential information.
(a) Clearly show what you consider confidential by marking, circling, bracketing, stamping, or some other method.  
(b) We will store your confidential information as described in 40 CFR part 2.  Also, we will disclose it only as specified in 40 CFR part 2.  This applies both to any information you send us and to any information we collect from inspections, audits, or other site visits.
(c) If you send us a second copy without the confidential information, we will assume it contains nothing confidential whenever we need to release information from it.  
(d) If you send us information without claiming it is confidential, we may make it available to the public without further notice to you, as described in 40 CFR 2.204.

§1068.15  General provisions for EPA decision-making.
(a) Not all EPA employees may represent the Agency with respect to EPA decisions under this part or the standard-setting part.  Only the Administrator of the Environmental Protection Agency or an official to whom the Administrator has delegated specific authority may represent the Agency.  For more information, ask for a copy of the relevant sections of the EPA Delegations Manual from the Designated Compliance Officer. 
(b) The regulations in this part and in the standard-setting part have specific requirements describing how to get EPA approval before you take specific actions.  These regulations also allow us to waive some specific requirements.  For provisions or flexibilities that we address frequently, we may choose to provide detailed guidance in supplemental compliance instructions for manufacturers.  Such instructions will generally state how they relate to the need for pre-approval.  Unless we explicitly state so, you should not consider full compliance with the instructions to be equivalent to EPA approval. 

§1068.20  May EPA enter my facilities for inspections?
(a) We may inspect your testing, manufacturing processes, storage facilities (including port facilities for imported engines and equipment or other relevant facilities), or records, as authorized by the Clean Air Act, to enforce the provisions of this chapter.  Inspectors will have authorizing credentials and will limit inspections to reasonable times -- usually, normal operating hours.
(b) We may select any facility to do any of the following:
   (1) Inspect and monitor any aspect of engine or equipment manufacturing, assembly, storage, or other procedures, and any facilities where you do them.
   (2) Inspect and monitor any aspect of engine or equipment test procedures or test-related activities, including test engine/equipment selection, preparation, service accumulation, emission duty cycles, and maintenance and verification of your test equipment's calibration.
   (3) Inspect and copy records or documents related to assembling, storing, selecting, and testing an engine or piece of equipment. 
   (4) Inspect and photograph any part or aspect of engines or equipment and components you use for assembly.
(c) You must give us reasonable help without charge during an inspection authorized by the Clean Air Act.  For example, you may need to help us arrange an inspection with the facility's managers, including clerical support, copying, and translation.  You may also need to show us how the facility operates and answer other questions.  If we ask in writing to see a particular employee at the inspection, you must ensure that he or she is present (legal counsel may accompany the employee).
(d)  If you have facilities in other countries, we expect you to locate them in places where local law does not keep us from inspecting as described in this section.  We will not try to inspect if we learn that local law prohibits it, but we may suspend your certificate if we are not allowed to inspect.

§1068.25  What information must I give to EPA?
If you are subject to the requirements of this part, we may require you to give us information to evaluate your compliance with any regulations that apply, as authorized by the Clean Air Act.  This includes the following things:
(a) You must provide the information we require in this chapter.  We may require an authorized representative of your company to approve and sign any submission of information to us, and to certify that the information is accurate and complete.
(b) You must establish and maintain records, perform tests, make reports and provide additional information that we may reasonably require under section 208 of the Clean Air Act (42 U.S.C. 7542).  This also applies to engines/equipment we exempt from emission standards or prohibited acts.  Unless we specify otherwise, you must keep required records for eight years.
(c) You are responsible for statements and information in your applications for certification or any other requests or reports.  If you provide statements or information to someone for submission to EPA, you are responsible for these statements and information as if you had submitted them to EPA yourself.  For example, knowingly submitting false information to someone else for inclusion in an application for certification would be deemed to be a submission of false information to the U.S. government in violation of 18 U.S.C. 1001.

§1068.27 May EPA conduct testing with my engines/equipment?
(a) As described in the standard-setting part, we may perform testing on your engines/equipment before we issue a certificate of conformity.  This is generally known as confirmatory testing.
(b) If we request it, you must make a reasonable number of production-line engines or pieces of production-line equipment available for a reasonable time so we can test or inspect them for compliance with the requirements of this chapter. 
(c) If your emission-data engine/equipment or production engine/equipment requires special components for proper testing, you must promptly provide any such components to us if we ask for them.

§1068.30  Definitions.
	The following definitions apply to this part.  The definitions apply to all subparts unless we note otherwise.  All undefined terms have the meaning the Clean Air Act gives to them.  The definitions follow:
	Affiliated companies or affiliates means one of the following:
(1) For determinations related to small manufacturer allowances or other small business provisions, these terms mean all entities considered to be affiliates with your entity under the Small Business Administration's regulations in  13 CFR 121.103.
(2) For all other provisions, these terms mean all of the following:
   (i) Parent companies (as defined in this section).
   (ii) Subsidiaries (as defined in this section).
   (iii) Subsidiaries of your parent company.
	Aftertreatment means relating to a catalytic converter, particulate filter, or any other system, component, or technology mounted downstream of the exhaust valve (or exhaust port) whose design function is to reduce emissions in the engine exhaust before it is exhausted to the environment.  Exhaust-gas recirculation (EGR) is not aftertreatment.
	Aircraft means any vehicle capable of sustained air travel more than 100 feet above the ground.
	Certificate holder means a manufacturer (including importers) with a valid certificate of conformity for at least one family in a given model year, or the preceding model year.  Note that only manufacturers may hold certificates.  Your applying for or accepting a certificate is deemed to be your agreement that you are a manufacturer.
	Clean Air Act means the Clean Air Act, as amended, 42 U.S.C. 7401- 7671q.
	Date of manufacture means one of the following:
(1) For engines, the date on which the crankshaft is installed in an engine block, with the following exceptions:
   (i) For engines produced by secondary engine manufacturers under §1068.262, date of manufacture means the date the engine is received from the original engine manufacturer.  You may assign an earlier date up to 30 days before you received the engine, but not before the crankshaft was installed.  You may not assign an earlier date if you cannot demonstrate the date the crankshaft was installed.
   (ii) Manufacturers may assign a date of manufacture at a point in the assembly process later than the date otherwise specified under this definition.  For example, a manufacturer may use the build date printed on the label or stamped on the engine as the date of manufacture.
(2) For equipment, the date on which the engine is installed, unless otherwise specified in the standard-setting part.  Manufacturers may alternatively assign a date of manufacture later in the assembly process.
	Days means calendar days, including weekends and holidays.
   Defeat device has the meaning given in the standard-setting part.
Designated Compliance Officer means one of the following:
(1) For motor vehicles regulated under 40 CFR part 86, subpart S: Director, Light-Duty Vehicle Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov.
(2) For compression-ignition engines used in heavy-duty highway vehicles regulated under 40 CFR part 86, subpart A, and 40 CFR parts 1036 and 1037, and for nonroad and stationary compression-ignition engines or equipment regulated under 40 CFR parts 60, 1033, 1039, and 1042: Director, Diesel Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; complianceinfo@epa.gov.
(3) Director, Gasoline Engine Compliance Center, U.S. Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; nonroad-si-cert@epa.gov, for all the following engines and vehicles:
   (i) For spark-ignition engines used in heavy-duty highway vehicles regulated under 40 CFR part 86, subpart A, and 40 CFR parts 1036 and 1037,
   (ii) For highway motorcycles regulated under 40 CFR part 86, subpart E.
(iii) For nonroad and stationary spark-ignition engines or equipment regulated under 40 CFR parts 60, 1045, 1048, 1051, 1054, and 1060.
	Engine means an engine block with an installed crankshaft, or a gas turbine engine. The term engine does not include engine blocks without an installed crankshaft, nor does it include any assembly of reciprocating engine components that does not include the engine block. (Note: For purposes of this definition, any component that is the primary means of converting an engine's energy into usable work is considered a crankshaft, whether or not it is known commercially as a crankshaft.) This includes complete and partially complete engines as follows:
(1) A complete engine is a fully assembled engine in its final configuration.  In the case of equipment-based standards, an engine is not considered complete until it is installed in the equipment, even if the engine itself is fully assembled.
(2) A partially complete engine is an engine that is not fully assembled or is not in its final configuration.  Except where we specify otherwise in this part or the standard-setting part, partially complete engines are subject to the same standards and requirements as complete engines.  The following would be considered examples of partially complete engines:  
   (i) An engine that is missing certain emission-related components.
   (ii) A new engine that was originally assembled as a motor-vehicle engine that will be recalibrated for use as a nonroad engine.
   (iii) A new engine that was originally assembled as a land-based engine that will be modified for use as a marine propulsion engine. 
   (iv) A short block consisting of a crankshaft and other engine components connected to the engine block, but missing the head assembly.  
   (v) A long block consisting of all engine components except the fuel system and an intake manifold.
   (vi) In the case of equipment-based standards, a fully functioning engine that is not yet installed in the equipment.  For example, a fully functioning engine that will be installed in an off-highway motorcycle or a locomotive is considered partially complete until it is installed in the equipment.
	Engine-based standard means an emission standard expressed in units of grams of pollutant per kilowatt-hour (or grams of pollutant per horsepower-hour) that applies to the engine.  Emission standards are either engine-based or equipment-based.  Note that engines may be subject to additional standards such as smoke standards.
	Engine-based test means an emission test intended to measure emissions in units of grams of pollutant per kilowatt-hour (or grams of pollutant per horsepower-hour), without regard to whether the standard applies to the engine or equipment.  Note that some products that are subject to engine-based testing are subject to additional test requirements such as for smoke.
	Engine configuration means a unique combination of engine hardware and calibration within an engine family. Engines within a single engine configuration differ only with respect to normal production variability or factors unrelated to emissions.
	Engine/equipment and engines/equipment mean engine(s) and/or equipment depending on the context.  Specifically these terms mean the following:
(1) Engine(s) when only engine-based standards apply.
(2) Engine(s) for testing issues when engine-based testing applies.
(3) Engine(s) and equipment when both engine-based and equipment-based standards apply.
(4) Equipment when only equipment-based standards apply.
(5) Equipment for testing issues when equipment-based testing applies.
	Equipment means one of the following things:
(1) Any vehicle, vessel, or other type of equipment that is subject to the requirements of this part or that uses an engine that is subject to the requirements of this part.  An installed engine is part of the equipment.  
(2) Fuel-system components that are subject to an equipment-based standard under this chapter.  Installed fuel-system components are also considered part of the engine/equipment to which they are attached.
	Equipment-based standard means an emission standard that applies to the equipment in which an engine is used or to fuel-system components associated with an engine, without regard to how the emissions are measured.  If equipment-based standards apply, we require that the equipment or fuel-system components be certified rather than just the engine.  Emission standards are either engine-based or equipment-based.   For example, recreational vehicles we regulate under 40 CFR part 1051 are subject to equipment-based standards even if emission measurements are based on engine operation alone. 
Excluded engines/equipment means engines/equipment that are not subject to emission standards or other requirements because they do not meet the definitions or other regulatory provisions that define applicability.  For example, a non-stationary engine that is used solely for off-highway competition is excluded from the requirements of this part because it meets neither the definition of "motor vehicle engine" nor "nonroad engine" under section 216 of the Clean Air Act.
	Exempted means relating to engines/equipment that are not required to meet otherwise applicable standards.  Exempted engines/equipment must conform to regulatory conditions specified for an exemption in this part 1068 or in the standard-setting part.  Exempted engines/equipment are deemed to be "subject to" the standards of the standard-setting part even though they are not required to comply with the otherwise applicable requirements.  Engines/equipment exempted with respect to a certain tier of standards may be required to comply with an earlier tier of standards as a condition of the exemption; for example, engines exempted with respect to Tier 3 standards may be required to comply with Tier 1 or Tier 2 standards. 
	Family means engine family or emission family, as applicable under the standard-setting part.
	Final deteriorated test result has the meaning given in the standard-setting part.  If it is not defined in the standard-setting part, it means the emission level that results from applying all appropriate adjustments (such as deterioration factors) to the measured emission result of the emission-data engine.
	Gas turbine engine means anything commercially known as a gas turbine engine or any collection of assembled engine components that is substantially similar to engines commercially known as gas turbine engines.  For example, a jet engine is a gas turbine engine.  Gas turbine engines may be complete or partially complete.  Turbines that rely on external combustion such as steam engines are not gas turbine engines.
	Good engineering judgment means judgments made consistent with generally accepted scientific and engineering principles and all available relevant information.  See §1068.5.
	Manufacturer has the meaning given in section 216(1) of the Clean Air Act (42 U.S.C. 7550(1)).  In general, this term includes any person who manufactures or assembles an engine or piece of equipment for sale in the United States or otherwise introduces a new engine or piece of equipment into U.S. commerce.  This includes importers that import new engines or new equipment into the United States for resale.  It also includes secondary engine manufacturers.
	Model year has the meaning given in the standard-setting part.  Unless the standard-setting part specifies otherwise, model year for individual engines/equipment is based on the date of manufacture or a later stage in the assembly process determined by the manufacturer, subject to the limitations described in §§1068.103 and 1068.360.  The model year of a new engine that is neither certified nor exempt is deemed to be the calendar year in which it is sold, offered for sale, imported, or delivered or otherwise introduced into U.S. commerce.
	Motor vehicle has the meaning given in 40 CFR 85.1703(a).
	New has the meaning we give it in the standard-setting part.  Note that in certain cases, used and remanufactured engines/equipment may be "new" engines/equipment.
	Nonroad engine means:
(1) Except as discussed in paragraph (2) of this definition, a nonroad engine is an internal combustion engine that meets any of the following criteria:
   (i) It is (or will be) used in or on a piece of equipment that is self-propelled or serves a dual purpose by both propelling itself and performing another function (such as garden tractors, off-highway mobile cranes and bulldozers).
   (ii) It is (or will be) used in or on a piece of equipment that is intended to be propelled while performing its function (such as lawnmowers and string trimmers).
   (iii) By itself or in or on a piece of equipment, it is portable or transportable, meaning designed to be and capable of being carried or moved from one location to another. Indicia of transportability include, but are not limited to, wheels, skids, carrying handles, dolly, trailer, or platform.
(2) An internal combustion engine is not a nonroad engine if it meets any of the following criteria:
   (i) The engine is used to propel a motor vehicle, an aircraft, or equipment used solely for competition.
   (ii) The engine is regulated under 40 CFR part 60, (or otherwise regulated by a federal New Source Performance Standard promulgated under section 111 of the Clean Air Act (42 U.S.C. 7411)).  Note that this criterion does not apply for engines meeting any of the criteria of paragraph (1) of this definition that are voluntarily certified under 40 CFR part 60.
   (iii) The engine otherwise included in paragraph (1)(iii) of this definition remains or will remain at a location for more than 12 consecutive months or a shorter period of time for an engine located at a seasonal source. A location is any single site at a building, structure, facility, or installation. For any engine (or engines) that replaces an engine at a location and that is intended to perform the same or similar function as the engine replaced, include the consecutive time period in calculating the consecutive time period. An engine located at a seasonal source is an engine that remains at a seasonal source during the full annual operating period of the seasonal source. A seasonal source is a stationary source that remains in a single location on a permanent basis (i.e., at least two years) and that operates at that single location approximately three months (or more) each year. See §1068.31 for provisions that apply if the engine is removed from the location.
Operating hours means:
(1) For engine and equipment storage areas or facilities, times during which people other than custodians and security personnel are at work near, and can access, a storage area or facility.
(2) For other areas or facilities, times during which an assembly line operates or any of the following activities occurs: 
   (i) Testing, maintenance, or service accumulation.
   (ii) Production or compilation of records. 
   (iii) Certification testing.
   (iv) Translation of designs from the test stage to the production stage.
   (v) Engine or equipment manufacture or assembly.
Parent company means any entity that has a controlling ownership of another company.  Note that the standard-setting part may treat a partial owner as a parent company even if it does not have controlling ownership of a company.
	Piece of equipment means any vehicle, vessel, locomotive, aircraft, or other type of equipment equipped with engines to which this part applies.
	Placed into service means used for its intended purpose.  Engines/equipment do not qualify as being "placed into service" based on incidental use by a manufacturer or dealer. 
	Reasonable technical basis means information that would lead a person familiar with engine design and function to reasonably believe a conclusion related to compliance with the requirements of this part.  For example, it would be reasonable to believe that parts performing the same function as the original parts (and to the same degree) would control emissions to the same degree as the original parts.  Note that what is a reasonable basis for a person without technical training might not qualify as a reasonable technical basis.
	Relating to as used in this section means relating to something in a specific, direct manner.  This expression is used in this section only to define terms as adjectives and not to broaden the meaning of the terms.  Note that "relating to" is used in the same manner as in the standard-setting parts.
	Replacement engine means an engine exempted as a replacement engine under §1068.240.
	Revoke means to terminate the certificate or an exemption for a family.  If we revoke a certificate or exemption, you must apply for a new certificate or exemption before continuing to introduce the affected engines/equipment into U.S. commerce.  This does not apply to engines/equipment you no longer possess.
	Secondary engine manufacturer means anyone who produces a new engine by modifying a complete or partially complete engine that was made by a different company.  For the purpose of this definition, "modifying" does not include making changes that do not remove an engine from its original certified configuration.  Secondary engine manufacturing includes, for example, converting automotive engines for use in industrial applications, or land-based engines for use in marine applications.  This applies whether it involves a complete or partially complete engine and whether the engine was previously certified to emission standards or not.  
(1) Manufacturers controlled by the manufacturer of the base engine (or by an entity that also controls the manufacturer of the base engine) are not secondary engine manufacturers; rather, both entities are considered to be one manufacturer for purposes of this part.  
(2) This definition applies equally to equipment manufacturers that modify engines.  Also, equipment manufacturers that certify to equipment-based standards using engines produced by another company are deemed to be secondary engine manufacturers.  
(3) Except as specified in paragraph (2) of this definition, companies importing complete engines into the United States are not secondary engine manufacturers regardless of the procedures and relationships between companies for assembling the engines.
	Small business means either of the following:
(1) A company that qualifies under the standard-setting part for special provisions for small businesses or small-volume manufacturers. 
(2) A company that qualifies as a small business under the regulations adopted by the Small Business Administration at 13 CFR 121.201 if the standard-setting part does not establish such qualifying criteria.
	Standard-setting part means a part in the Code of Federal Regulations that defines emission standards for a particular engine and/or piece of equipment (see §1068.1(a)).  For example, the standard-setting part for marine spark-ignition engines is 40 CFR part 1045.  For provisions related to evaporative emissions, the standard-setting part may be 40 CFR part 1060, as specified in 40 CFR 1060.1.
Subsidiary means an entity that is owned or controlled by a parent company.
Suspend means to temporarily discontinue the certificate or an exemption for a family.  If we suspend a certificate, you may not sell, offer for sale, or introduce or deliver into commerce in the United States or import into the United States engines/equipment from that family unless we reinstate the certificate or approve a new one.  This also applies if we suspend an exemption, unless we reinstate the exemption.
	Ultimate purchaser means the first person who in good faith purchases a new engine or new piece of equipment for purposes other than resale.
	United States, in a geographic sense, means the States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, American Samoa, and the U.S. Virgin Islands.
	U.S.-directed production volume has the meaning given in the standard-setting part.
	Void means to invalidate a certificate or an exemption ab initio ("from the beginning").  If we void a certificate, all the engines/equipment introduced into U.S. commerce under that family for that model year are considered uncertified (or nonconforming) and are therefore not covered by a certificate of conformity, and you are liable for all engines/equipment introduced into U.S. commerce under the certificate and may face civil or criminal penalties or both.  This applies equally to all engines/equipment in the family, including engines/equipment introduced into U.S. commerce before we voided the certificate.  If we void an exemption, all the engines/equipment introduced into U.S. commerce under that exemption are considered uncertified (or nonconforming), and you are liable for engines/equipment introduced into U.S. commerce under the exemption and may face civil or criminal penalties or both.  You may not sell, offer for sale, or introduce or deliver into commerce in the United States or import into the United States any additional engines/equipment using the voided exemption.
	Voluntary emission recall means a repair, adjustment, or modification program voluntarily initiated and conducted by a manufacturer to remedy any emission-related defect for which engine owners have been notified.
	We (us, our) means the Administrator of the Environmental Protection Agency and any authorized representatives.

§1068.31  Changing the status of nonroad or stationary engines under the definition of "nonroad engine".
This section specifies the provisions that apply when an engine previously used in a nonroad application is subsequently used in an application other than a nonroad application, or when an engine previously used in a stationary application (i.e., an engine that was not used as a nonroad engine and that was not used to propel a motor vehicle, an aircraft, or equipment used solely for competition) is moved.
(a) Changing the status of a stationary engine to be a new nonroad engine as described in paragraph (b) of this section is a violation of §1068.101(a)(1) or (b)(3) unless the engine has been certified to be compliant with all requirements of this chapter that apply to new nonroad engines of the same type (for example, a compression-ignition engine rated at 40 kW) and model year, and is in its certified configuration.  Note that the definitions of "model year" in the standard-setting parts generally identify the engine's original date of manufacture as the basis for determining which standards apply if it becomes a nonroad engine after it is no longer new.  For example, see 40 CFR 1039.801 and 1048.801. 
(b) A stationary engine becomes a new nonroad engine if -  
   (1) It is used in an application that meets the criteria specified in paragraphs (1)(i) or (ii) in the definition of "nonroad engine" in §1068.30. 
   (2) It meets the criteria specified in paragraph (1)(iii) of the definition of "nonroad engine" in §1068.30 and is moved so that it fails to meet (or no longer meets) the criteria specified in paragraph (2)(iii) in the definition of "nonroad engine" in §1068.30.
(c) A stationary engine does not become a new nonroad engine if it is moved but continues to meet the criteria specified in paragraph (2)(iii) in the definition of "nonroad engine" in §1068.30 in its new location.  For example, a transportable engine that is used in a single specific location for 18 months and is later moved to a second specific location where it will remain for at least 12 months is considered to be a stationary engine in both locations.  Note that for stationary engines that are neither portable nor transportable in actual use, the residence-time restrictions in the definition of "nonroad engine" generally do not apply.
(d) Changing the status of a nonroad engine to be a new stationary engine as described in paragraph (e) of this section is a violation of §1068.101(a)(1) unless the engine complies with all the requirements of this chapter for new stationary engines of the same type (for example, a compression-ignition engine rated at 40 kW) and model year.  For a new stationary engine that is required to be certified under 40 CFR part 60, the engine must have been certified to be compliant with all the requirements that apply to new stationary engines of the same type and model year, and must be in its certified configuration.  Note that the definitions of "model year" in the standard-setting parts generally identify the engine's original date of manufacture as the basis for determining which standards apply if it becomes a stationary engine after it is no longer new.  For example, see 40 CFR 60.4219 and 60.4248.
(e) A nonroad engine ceases to be a nonroad engine and becomes a new stationary engine if -  
   (1) At any time, it meets the criteria specified in paragraph (2)(iii) in the definition of "nonroad engine" in §1068.30.  For example, a portable generator engine ceases to be a nonroad engine if it is used or will be used in a single specific location for 12 months or longer.  If we determine that an engine will be or has been used in a single specific location for 12 months or longer, it ceased to be a nonroad engine when it was placed in that location.
   (2) It is otherwise regulated by a federal New Source Performance Standard promulgated under section 111 of the Clean Air Act (42 U.S.C. 7411).
(f) A nonroad engine ceases to be a nonroad engine if it is used to propel a motor vehicle, an aircraft, or equipment used solely for competition.  See 40 CFR part 86 for requirements applicable to motor vehicles and motor vehicle engines.  See 40 CFR part 87 for requirements applicable to aircraft and aircraft engines.  See §1068.235 for requirements applicable to equipment used solely for competition. 

§1068.32  Explanatory terms.
This section explains how certain phrases and terms are used in 40 CFR parts 1000 through 1099 , especially those used to clarify and explain regulatory provisions.
(a) Types of provisions.  The term "provision" includes all aspects of the regulations.  As described in this section, regulatory provisions include standards, requirements, prohibitions, and allowances, along with a variety of other types of provisions.  In certain cases, we may use these terms to apply to some but not all of the provisions of a part or section.  For example, we may apply the allowances of a section for certain engines, but not the requirements.  We may also apply all provisions except the requirements and prohibitions.  
   (1) A standard is a requirement established by regulation that limits the emissions of air pollutants.  Examples of standards include numerical emission standards (such as 0.01 g/kW-hr) and design standards (such a closed crankcase standard).  Compliance with or conformance to a standard is a specific type of requirement, and in some cases a standard may be discussed as a requirement.  Thus, a statement about the requirements of a part or section also applies with respect to the standards of the part or section.
   (2) The regulations apply other requirements in addition to standards. For example, manufacturers are required to keep records and provide reports to EPA.
   (3) While requirements state what someone must do, prohibitions state what someone may not do.  Prohibitions are often referred to as prohibited acts or prohibited actions.  Most penalties apply for violations of prohibitions.  A list of prohibitions may therefore include the failure to meet a requirement as a prohibited action.
   (4) Allowances provide some form of relief from requirements.  This may include provisions delaying implementation, establishing exemptions or test waivers, or creating alternative compliance options.  Allowances may be conditional.  For example, we may exempt you from certain requirements on the condition that you meet certain other requirements.
   (5) The regulations also include important provisions that are not standards, requirements, prohibitions, or allowances, such as definitions.
   (6) Engines/equipment are generally considered "subject to" a specific provision if that provision applies, or if it does not apply because of an exemption authorized under the regulation.  For example, locomotives are subject to the provisions of 40 CFR part 1033 even if they are exempted from the standards of part 1033.
(b) Singular and plural.  Unless stated otherwise or unless it is clear from the regulatory context, provisions written in singular form include the plural form and provisions written in plural form include the singular form.  For example, the statement "The manufacturer must keep this report for three years" is equivalent to "The manufacturers must keep these reports for three years."  
(c) Inclusive lists.  Lists in the regulations prefaced by "including" or "this includes" are not exhaustive.   The terms "including" and "this includes" should be read to mean "including but not limited to" and "this includes but is not limited to".  For example, the phrase "including small manufacturers" does not exclude large manufacturers.  However, prescriptive statements to "include" specific items (such as those related to recordkeeping and reporting requirements) may be exhaustive.  
(d) Notes.  Statements that begin with "Note:" or "Note that" are intended to clarify specific regulatory provisions stated elsewhere in the regulations.  By themselves, such statements are not intended to specify regulatory requirements.  Such statements are typically used for regulatory text that, while legally sufficient to specify a requirement, may be misunderstood by some readers.  For example, the regulations might note that a word is defined elsewhere in the regulations to have a specific meaning that may be either narrower or broader than some readers might assume.
(e) Examples.  Examples provided in the regulations are typically introduced by either "for example" or "such as".  Specific examples given in the regulations do not necessarily represent the most common examples.  The regulations may specify examples conditionally (that is, specifying that they are applicable only if certain criteria or conditions are met).  Lists of examples cannot be presumed to be exhaustive lists.
(f) Generally and typically. Statements that begin with "generally", "in general", or "typically" should not be read to apply universally or absolutely.  Rather they are intended to apply for the most common circumstances.  "Generally" and "typically" statements may be identified as notes as described in paragraph (d) of this section.
(g) Unusual circumstances.  The regulations specify certain allowances that apply "in unusual circumstances".  While it is difficult to precisely define what "unusual circumstances" means, this generally refers to specific circumstances that are both rare and unforeseeable.  For example, a severe hurricane in the northeastern United States may be considered to be an unusual circumstance, while a less severe hurricane in the southeastern United States may not be.  Where the regulations limit an allowance to unusual circumstances, manufacturers and others should not presume that such an allowance will be available to them.  Provisions related to unusual circumstances may be described using the phrase "normal circumstances", which are those circumstances that are not unusual circumstances.  (h) Exceptions and other specifications.  Regulatory provisions may be expressed as a general prohibition, requirement, or allowance that is modified by other regulatory text.  Such provisions may include phrases such as "unless specified otherwise", "except as specified", or "as specified in this section".   It is important that the exceptions and the more general statement be considered together.  This regulatory construct is intended to allow the core requirement or allowance to be stated in simple, clear sentences, rather than more precise and comprehensive sentences that may be misread.  For example, where an action is prohibited in most but not all circumstances, the provision may state that you may not take the action, "except as specified in this section."  The exceptions could then be stated in subsequent regulatory text.

§1068.35  Symbols, acronyms, and abbreviations.
The following symbols, acronyms, and abbreviations apply to this part:
$
U.S. dollars.
CFR
Code of Federal Regulations.
disp
engine displacement.
EPA
Environmental Protection Agency.
kW
kilowatt.
L/cyl
liters per cylinder.
NARA
National Archives and Records Administration.
NOx
Oxides of nitrogen.
SAE
Society of Automotive Engineers.
SEA
selective enforcement audit.
U.S.
United States.
U.S.C.
United States Code.


§1068.40  Special provisions for implementing changes in the regulations.
(a) During the 12 months following the effective date of any change in the provisions of this part, you may ask to apply the previously applicable provisions. Note that the effective date is generally 30 or 60 days after publication in the Federal Register, as noted in the final rule.  We will generally approve your request if you can demonstrate that it would be impractical to comply with the new requirements. We may consider the potential for adverse environmental impacts in our decision. Similarly, in unusual circumstances, you may ask for relief under this paragraph (a) from new requirements that apply under the standard-setting part.
(b) During the 60 days following the effective date of any change in the provisions of this part, you may use the previously applicable provisions without request if they meet either of the following criteria:
   (1) The new provisions require you to redesign your engines/equipment, modify your engine/equipment labels, or change your production procedures.
   (2) The new provisions change what you must include in an application for certification that you submit before the end of this 60-day period.  You are not required to amend such applications to comply with the new provisions for that model year; however, this allowance does not apply for later model years, even if you certify an engine family using carryover emission data.  This allowance does not affect your obligation to provide information that we request separate from an application for certification.
   

§1068.45  General  labeling provisions.
The provisions of this part and the standard-setting part include a variety of labeling requirements.  The following general provisions apply:
(a) Permanent labels.  Where we specify that you apply a permanent label, you must meet the following requirements unless the standard-setting part includes other specific label requirements:
   (1)  Attach the label so no one can remove it without destroying or defacing it.
   (2)  Make sure it is durable and readable for the engine/equipment's entire life.
   (3)  Secure it to a part of the engine/equipment needed for normal operation and not normally requiring replacement.
   (4)  Write it in English.
   (5)  Make the labels readily visible to the average person after all installation and assembly are complete.
(b) Removable labels.  Where we specify that you apply a removable label, it must meet the following conditions: 
   (1) You must attach the label in a way that does not allow it to be separated from the engine/equipment without a deliberate effort.  Note that for exemptions requiring removable labels, the exemption no longer applies once the label is separated from the engine/equipment. 
   (2) The label must be durable and readable throughout the period of its intended purpose.  This period generally includes all distribution in U.S. commerce during which the exemption applies.  
   (3) Except as specified in paragraph (c) of this section, the label must be attached directly to the engine/equipment in a visible location.  We consider a tag that meets the specified requirements to be an attached label.
(c) Labels on packaging. Unless we specify otherwise, where we require engine/equipment labels that may be removable, you may instead label the packaging if the engines/equipment are packaged together as described in this paragraph (c). For example, this may involve packaging engines together by attaching them to a rack, binding them together on a pallet, or enclosing them in a box.  The provisions of this paragraph (c) also apply for engines/equipment boxed individually where you do not apply labels directly to the engines/equipment.  The following provisions apply if you label the packaging instead of labeling engines/equipment individually:
   (1) You may use the provisions of this paragraph (c) only if all the engines/equipment packaged together need the same label.
   (2) You must place the label on the package in a readily visible location.  This may require labeling the package in multiple locations.
   (3) You must package the engines/equipment such that the labels will not be separated from the engines/equipment or otherwise become unreadable throughout the period that the label applies.  For example, labels required for shipping engines to a secondary engine manufacturer under §1068.262 must remain attached and readable until they reach the secondary engine manufacturer.   Similarly, removable labels specified in §1068.240 for replacement engines must remain attached and readable until they reach the point of final installation.
   (4) You are in violation of §1068.101(a)(1) if such engines/equipment are removed from the package or are otherwise separated from the label before reaching the point at which the label is no longer needed.
(d) Temporary consumer labels.  Where we specify that you apply temporary consumer labels (including tags), each label must meet the following conditions: 
   (1) You must attach the label in a way that does not allow it to be separated from the engine/equipment without a deliberate effort. 
   (2) The label must be sufficiently durable to be readable until it reaches the ultimate purchaser.
   (3) The label must be attached directly to the engine/equipment in a visible location. 
(e) Prohibitions against removing labels.  As specified in §1068.101(b)(7), removing permanent labels is prohibited except for certain circumstances.  Removing temporary or removable labels prematurely is also prohibited by §1068.101(b)(7).
(f) Identifying emission control systems.  If the standard-setting part specifies that you use standardized terms and abbreviations to identify emission control systems, use terms and abbreviations consistent with SAE J1930 (incorporated by reference in §1068.95). 
(g) Date format.  If you use a coded approach to identify the engine/equipment's date of manufacture, describe or interpret the code in your application for certification.
(h) Branding. The following provisions apply if you identify the name and trademark of another company instead of your own on your emission control information label, as provided in the standard-setting part:
   (1) You must have a contractual agreement with the other company that obligates that company to take the following steps:
      (i) Meet the emission warranty requirements that apply under the standard-setting part.  This may involve a separate agreement involving reimbursement of warranty-related expenses.
      (ii) Report all warranty-related information to the certificate holder.
   (2) In your application for certification, identify the company whose trademark you will use.
   (3) You remain responsible for meeting all the requirements of this chapter, including warranty and defect-reporting provisions.

§1068.95  What materials does this part reference?
(a) Certain material is incorporated by reference into this part with the approval of the Director of the Federal Register under 5 U.S.C. 552(a) and 1 CFR part 51. To enforce any edition other than that specified in this section, a document must be published in the Federal Register and the material must be available to the public. All approved materials are available for inspection at the Air and Radiation Docket and Information Center (Air Docket) in the EPA Docket Center (EPA/DC) at Rm. 3334, EPA West Bldg., 1301 Constitution Ave. NW., Washington, DC. The EPA/DC Public Reading Room hours of operation are 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number of the EPA/DC Public Reading Room is (202) 566-1744, and the telephone number for the Air Docket is (202) 566-1742. These approved materials are also available for inspection at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call (202) 741-6030 or go to http://www.archives.gov/federal_register/code_of_federal_regulations/ibr_locations.html. In addition, these materials are available from the sources listed below.
(b) SAE International material. The following standards are available from SAE International, 400 Commonwealth Dr., Warrendale, PA 15096-0001, (724) 776-4841, or http://www.sae.org:
   (1) SAE J1930, Electrical/Electronic Systems Diagnostic Terms, Definitions, Abbreviations, and Acronyms, revised April 2002 ("SAE J1930"), IBR approved for §1068.45(f).
   (2) [Reserved]

Subpart B -- Prohibited Actions and Related Requirements


§1068.101  What general actions does this regulation prohibit?
This section specifies actions that are prohibited and the maximum civil penalties that we can assess for each violation in accordance with 42 U.S.C. 7522 and 7524.  The maximum penalty values listed in paragraphs (a) and (b) of this section and in §1068.125 apply as of December 7, 2013.  As described in paragraph (h) of this section, these maximum penalty limits are different for earlier violations and they may be adjusted as set forth in 40 CFR part 19. 
(a) The following prohibitions and requirements apply to manufacturers of new engines, manufacturers of equipment containing these engines, and manufacturers of new equipment, except as described in subparts C and D of this part:
   (1)  Introduction into commerce. You may not sell, offer for sale, or introduce or deliver into commerce in the United States or import into the United States any new engine/equipment after emission standards take effect for the engine/equipment, unless it is covered by a valid certificate of conformity for its model year and has the required label or tag. You also may not take any of the actions listed in the previous sentence with respect to any equipment containing an engine subject to this part's provisions unless the engine is covered by a valid certificate of conformity for its model year and has the required engine label or tag.  We may assess a civil penalty up to $37,500 for each engine or piece of equipment in violation.
      (i) For purposes of this paragraph (a)(1), a valid certificate of conformity is one that applies for the same model year as the model year of the equipment (except as allowed by §1068.105(a)), covers the appropriate category or subcategory of engines/equipment (such as locomotive or sterndrive/inboard Marine SI or nonhandheld Small SI), and conforms to all requirements specified for equipment in the standard-setting part.  Engines/equipment are considered not covered by a certificate unless they are in a configuration described in the application for certification.
      (ii) The requirements of this paragraph (a)(1) also cover new engines you produce to replace an older engine in a piece of equipment, unless the engine qualifies for the replacement-engine exemption in §1068.240. 
      (iii) For engines used in equipment subject to equipment-based standards, you may not sell, offer for sale, or introduce or deliver into commerce in the United States or import into the United States any new engine unless it is covered by a valid certificate of conformity for its model year and has the required label or tag.  See the standard-setting part for more information about how this prohibition applies.
      (iv) Where the regulations specify that you are allowed to introduce engines/equipment into U.S. commerce without a certificate of conformity, you may take any of the otherwise prohibited actions specified in this paragraph (a)(1) with respect to those engines/equipment.
   (2) Reporting and recordkeeping. This chapter requires you to record certain types of information to show that you meet our standards.  You must comply with these requirements to make and maintain required records (including those described in §1068.501).  You may not deny us access to your records or the ability to copy your records if we have the authority to see or copy them.  Also, you must give us complete and accurate reports and information without delay as required under this chapter.  Failure to comply with the requirements of this paragraph is prohibited.  We may assess a civil penalty up to $37,500 for each day you are in violation.  In addition, knowingly submitting false information is a violation of 18 U.S.C. 1001, which may involve criminal penalties and up to five years imprisonment.
   (3) Testing and access to facilities. You may not keep us from entering your facility to test engines/equipment or inspect if we are authorized to do so.  Also, you must perform the tests we require (or have the tests done for you).  Failure to perform this testing is prohibited. We may assess a civil penalty up to $37,500 for each day you are in violation.
(b) The following prohibitions apply to everyone with respect to the engines and equipment to which this part applies:
   (1) Tampering. You may not remove or render inoperative any device or element of design installed on or in engines/equipment in compliance with the regulations prior to its sale and delivery to the ultimate purchaser.  You also may not knowingly remove or render inoperative any such device or element of design after such sale and delivery to the ultimate purchaser.  This includes, for example, operating an engine without a supply of appropriate quality urea if the emission control system relies on urea to reduce NOx emissions or the use of incorrect fuel or engine oil that renders the emissions control system inoperative.  Section 1068.120 describes how this applies to rebuilding engines.  See the standard-setting part, which may include additional provisions regarding actions prohibited by this requirement.  For a manufacturer or dealer, we may assess a civil penalty up to $37,500 for each engine or piece of equipment in violation.  For anyone else, we may assess a civil penalty up to $3,750 for each engine or piece of equipment in violation.  This prohibition does not apply in any of the following situations:
      (i) You need to repair the engine/equipment and you restore it to proper functioning when the repair is complete.
      (ii) You need to modify the engine/equipment to respond to a temporary emergency and you restore it to proper functioning as soon as possible.
      (iii) You modify new engines/equipment that another manufacturer has already certified to meet emission standards and recertify them under your own family.  In this case you must tell the original manufacturer not to include the modified engines/equipment in the original family.  
   (2) Defeat devices. You may not knowingly manufacture, sell, offer to sell, or install, any component that bypasses, impairs, defeats, or disables the control of emissions of any regulated pollutant, except as explicitly allowed by the standard-setting part.  We may assess a civil penalty up to $3,750 for each component in violation.
   (3) Stationary engines. For an engine that is excluded from any requirements of this chapter because it is a stationary engine, you may not move it or install it in any mobile equipment except as allowed by the provisions of this chapter.  You may not circumvent or attempt to circumvent the residence-time requirements of paragraph (2)(iii) of the nonroad engine definition in §1068.30.  Anyone violating this paragraph (b)(3) is deemed to be a manufacturer in violation of paragraph (a)(1) of this section.  We may assess a civil penalty up to $37,500 for each engine or piece of equipment in violation.
   (4) Competition engines/equipment. (i) For uncertified engines/equipment that are excluded or exempted as new engines/equipment from any requirements of this chapter because they are to be used solely for competition, you may not use any of them in a manner that is inconsistent with use solely for competition.  Anyone violating this paragraph (b)(4)(i) is deemed to be a manufacturer in violation of paragraph (a)(1) of this section.  We may assess a civil penalty up to $37,500 for each engine or piece of equipment in violation. 
   (ii) For certified nonroad engines/equipment that qualify for exemption from the tampering prohibition as described in §1068.235 because they are to be used solely for competition, you may not use any of them in a manner that is inconsistent with use solely for competition.  Anyone violating this paragraph (b)(4)(ii) is in violation of paragraph (b)(1) or (b)(2) of this section.  Certified motor vehicles and motor vehicle engines and their emission control devices must remain in their certified configuration even if they are used solely for competition or if they become nonroad vehicles or engines; anyone modifying a certified motor vehicle or motor vehicle engine for any reason is subject to the tampering and defeat device prohibitions of 40 CFR 1068.101(b) and 42 U.S.C. 7522(a)(3).
   (5) Importation. You may not import an uncertified engine or piece of equipment if it is defined to be new in the standard-setting part with a model year for which emission standards applied.  Anyone violating this paragraph (b)(5) is deemed to be a manufacturer in violation of paragraph (a)(1) of this section.  We may assess a civil penalty up to $37,500 for each engine or piece of equipment in violation.  Note the following:
      (i) The definition of new is broad for imported engines/equipment; uncertified engines and equipment (including used engines and equipment) are generally considered to be new when imported.
      (ii) Used engines/equipment that were originally manufactured before applicable EPA standards were in effect are generally not subject to emission standards. 
   (6) Warranty, recall, and maintenance instructions. You must meet your obligation to honor your emission-related warranty under §1068.115, including any commitments you identify in your application for certification.  You must also fulfill all applicable requirements under subpart F of this part related to emission-related defects and recalls.  You must also provide emission-related installation and maintenance instructions as described in the standard-setting part.  Failure to meet these obligations is prohibited. Also, except as specifically provided by regulation, you are prohibited from directly or indirectly communicating to the ultimate purchaser or a later purchaser that the emission-related warranty is valid only if the owner has service performed at authorized facilities or only if the owner uses authorized parts, components, or systems.  We may assess a civil penalty up to $37,500 for each engine or piece of equipment in violation.
      (7) Labeling. (i) You may not remove or alter an emission control information label or other required permanent label except as specified in this paragraph (b)(7) or otherwise allowed by this chapter.  Removing or altering an emission control information label is a violation of paragraph (b)(1) of this section.  However, it is not a violation to remove a label in the following circumstances:
         (A) The engine is destroyed, is permanently disassembled, or otherwise loses its identity such that the original title to the engine is no longer valid. 
         (B) The regulations specifically direct you to remove the label.  For example, see §1068.235.
         (C) The part on which the label is mounted needs to be replaced.  In this case, you must have a replacement part with a duplicate of the original label installed by the certifying manufacturer or an authorized agent, except that the replacement label may omit the date of manufacture if applicable.  We generally require labels to be permanently attached to parts that will not normally be replaced, but this provision allows for replacements in unusual circumstances, such as damage in a collision or other accident.
         (D) The original label is incorrect, provided that it is replaced with the correct label from the certifying manufacturer or an authorized agent.  This allowance to replace incorrect labels does not affect whether the application of an incorrect original label is a violation.
      (ii) Removing or altering a temporary or removable label contrary to the provisions of this paragraph (b)(7)(ii) is a violation of paragraph (b)(1) of this section.
         (A) For labels identifying temporary exemptions, you may not remove or alter the label while the engine/equipment is in an exempt status.  The exemption is automatically revoked for each engine/equipment for which the label has been removed.
         (B) For temporary or removable consumer information labels, only the ultimate purchaser may remove the label.
      (iii) You may not apply a false emission control information label.  You also may not manufacture, sell, or offer to sell false labels. The application, manufacture, sale, or offer for sale of false labels is a violation of this section (such as paragraph (a)(1) or (b)(2) of this section).  Note that applying an otherwise valid emission control information label to the wrong engine is considered to be applying a false label. 
      (iv) Information on engine/equipment labels as specified in this chapter is deemed to be information submitted to EPA and is therefore subject to the prohibition against knowingly submitting false information under paragraph (a)(2) of this section and 18 U.S.C. 1001.
(c) If you cause someone to commit a prohibited act in paragraph (a) or (b) of this section, you are in violation of that prohibition.
(d) Exemptions from these prohibitions are described in subparts C and D of this part and in the standard-setting part.
(e) The standard-setting parts describe more requirements and prohibitions that apply to manufacturers (including importers) and others under this chapter.
(f) The specification of prohibitions and penalties in this part does not limit the prohibitions and penalties described in the Clean Air Act.  Additionally, a single act may trigger multiple violations under this section and the Act.  We may pursue all available administrative, civil, or criminal remedies for those violations even if the regulation references only a single prohibited act in this section.
(g) [Reserved]
(h)  The maximum penalty values listed in paragraphs (a) and (b) of this section and in §1068.125 apply as of December 7, 2013.  Maximum penalty values for earlier violations are published in 40 CFR part 19.  Maximum penalty limits may be adjusted after December 7, 2013 based on the Consumer Price Index.  The specific regulatory provisions for changing the maximum penalties, published in 40 CFR part 19, reference the applicable U.S. Code citation on which the prohibited action is based.  The following table is shown here for informational purposes:

             Table 1 of §1068.101 -- Legal Citation for Specific 
             Prohibitions for Determining Maximum Penalty Amounts
              Part 1068 Regulatory Citation of Prohibited Action
                             General Description 
                                of Prohibition
                U.S. Code Citation for Clean Air Act  Authority
§1068.101 (a)(1) 
Introduction into U.S. commerce of an uncertified source.
42 U.S.C. 7522(a)(1) and (a)(4)
§1068.101(a)(2)
Failure to provide information.
42 U.S.C. 7522(a)(2)
§1068.101(a)(3)
Denying access to facilities.
42 U.S.C. 7522(a)(2)
§1068.101(b)(1) 
Tampering with emission controls by a manufacturer or dealer.
42 U.S.C. 7522(a)(3)
                                       
Tampering with emission controls by someone other than a manufacturer or dealer.
                                       
§1068.101(b)(2) 
Sale or use of a defeat device.
42 U.S.C. 7522(a)(3)
§1068.101(b)(3) 
Mobile use of a stationary engine.
42 U.S.C. 7522(a)(1) and (a)(4)
§1068.101(b)(4) 
Noncompetitive use of uncertified engines/equipment that is exempted for competition.
42 U.S.C. 7522(a)(1) and (a)(4)
§1068.101(b)(5) 
Importation of an uncertified source.
42 U.S.C. 7522(a)(1) and (a)(4)
§1068.101(b)(6) 
Recall and warranty
42 U.S.C. 7522(a)(4)
§1068.101(b)(7) 
Removing labels
42 U.S.C. 7522(a)(3)


§1068.103 Provisions related to the duration and applicability of certificates of conformity.
(a) Engines/equipment covered by a certificate of conformity are limited to those that are produced during the period specified in the certificate and conform to the specifications described in the certificate and the associated application for certification.  For the purposes of this paragraph (a), "specifications" includes the emission control information label and any conditions or limitations identified by the manufacturer or EPA.  For example, if the application for certification specifies certain engine configurations, the certificate does not cover any configurations that are not specified. We may ignore any information provided in the application that we determine is not relevant to a demonstration of compliance with applicable regulations, such as your projected production volumes in many cases.  
(b) Unless the standard-setting part specifies otherwise, determine the production period corresponding to each certificate of conformity as specified in this paragraph (b).  In general, the production period is the manufacturer's annual production period identified as a model year. 
   (1) For engines/equipment subject to emission standards based on model years, the first day of the annual production period can be no earlier than January 2 of the calendar year preceding the year for which the model year is named, or the earliest date of manufacture for any engine/equipment in the engine family, whichever is later.  The last day of the annual production period can be no later than December 31 of the calendar year for which the model year is named or the latest date of manufacture for any engine/equipment in the engine family, whichever is sooner.  Note that this approach limits how you can designate a model year for your engines/equipment; however, it does not limit your ability to meet more stringent emission standards early where this is permitted in the regulation.
   (2) For fuel-system components certified to evaporative emission standards based on production periods rather than model years, the production period is either the calendar year or a longer period we specify consistent with the manufacturer's normal production practices.
(c) A certificate of conformity will not cover engines/equipment you produce with a date of manufacture earlier than the date you submit the application for certification for the family.  You may start to produce engines/equipment after you submit an application for certification and before the effective date of a certificate of conformity, subject to the following conditions:
   (1) The engines/equipment must conform in all material respects to the engines/equipment described in your application.  Note that if we require you to modify your application, you must ensure that all engines/equipment conform to the specifications of the modified application.
   (2) The engines/equipment may not be sold, offered for sale, introduced into U.S. commerce, or delivered for introduction into U.S. commerce before the effective date of the certificate of conformity.
   (3) You must notify us in your application for certification that you plan to use the provisions of this paragraph (c) and when you intend to start production.  If the standard-setting part specifies mandatory testing for production-line engines, you must start testing as directed in the standard-setting part based on your actual start of production, even if that occurs before we approve your certification.  You must also agree to give us full opportunity to inspect and/or test the engines/equipment during and after production.  For example, we must have the opportunity to specify selective enforcement audits as allowed by the standard-setting part and the Clean Air Act as if the engines/equipment were produced after the effective date of the certificate.
   (4) See §1068.262 for special provisions that apply for secondary engine manufacturers receiving shipment of partially complete engines before the effective date of a certificate.
(d) The prohibition in §1068.101(a)(1) against offering to sell engines/equipment without a valid certificate of conformity generally does not apply for engines/equipment that have not yet been produced.  You may contractually agree to produce engines/equipment before obtaining the required certificate of conformity.  This is intended to allow manufacturers of low-volume products to establish a sufficient market for engines/equipment before going through the effort to certify. 
(e) Engines/equipment with a date of manufacture after December 31 of the calendar year for which a model year is named are not covered by the certificate of conformity for that model year. You must submit an application for a new certificate of conformity demonstrating compliance with applicable standards even if the engines/equipment are identical to those built before December 31.
(f) The flexible approach to naming the annual production period described in paragraph (b)(1) of this section is intended to allow you to introduce new products at any point during the year.  This is based on the expectation that production periods generally run on consistent schedules from year to year.  You may not use this flexibility to arrange your production periods such that you can avoid annual certification.
(g) An engine is generally assigned a model year based on its date of manufacture, which is typically based on the date the crankshaft is installed in the engine (see §1068.30).  You may not circumvent the provisions of §1068.101(a)(1) by stockpiling engines with a date of manufacture before new or changed emission standards take effect by deviating from your normal production and inventory practices.  (For purposes of this paragraph (g), normal production and inventory practices means those practices you typically use for similar families in years in which emission standards do not change.  We may require you to provide us routine production and inventory records that document your normal practices for the preceding eight years.)  For most engines you should plan to complete the assembly of an engine of a given model year into its certified configuration within the first week after the end of the model year if new emission standards start to apply in that model year.  For special circumstances it may be appropriate for your normal business practice to involve more time.  For engines with per-cylinder displacement below 2.5 liters, if new emission standards start to apply in a given year, we would consider an engine not to be covered by a certificate of conformity for the preceding model year if the engine is not completely assembled into a compliant configuration as described in §1068.260 within 30 days after the end of the model year for that engine family.  For example, in the case where new standards apply in the 2010 model year, and your normal production period is based on the calendar year, you must complete the assembly of all your 2009 model year engines before January 31, 2010, or an earlier date consistent with your normal production and inventory practices. For engines with per-cylinder displacement at or above 2.5 liters, this time may not exceed 60 days.  Note that for the purposes of this paragraph (g), an engine shipped under §1068.261 is deemed to be a complete engine.  Note also that §1068.245 allows flexibility for additional time in unusual circumstances.  Note finally that disassembly of complete engines and reassembly (such as for shipment) does not affect the determination of model year; the provisions of this paragraph (g) apply based on the date on which initial assembly is complete.  
(h) This paragraph (h) describes the effect of suspending, revoking, or voiding a certificate of conformity. See the definitions of "suspend," "revoke," and "void" in § 1068.30. Engines/equipment produced at a time when the otherwise applicable certificate of conformity has been suspended or revoked are not covered by a certificate of conformity. Where a certificate of conformity is void, all engines/equipment produced under that certificate of conformity are not and were not covered by a certificate of conformity. In cases of suspension, engines/equipment will be covered by a certificate only if they are produced after the certificate is reinstated or a new certificate is issued. In cases of revocation and voiding, engines/equipment will be covered by a certificate only if they are produced after we issue a new certificate. 42 U.S.C. 7522(a)(1) and § 1068.101(a)(1) prohibit selling, offering for sale, introducing into commerce, delivering for introduction into commerce, and importing engines/equipment that are not covered by a certificate of conformity, and they prohibit anyone from causing another to violate these prohibitions.
(i) You may transfer a certificate to another entity only in the following cases:
   (1) You may transfer a certificate to a parent company, including a parent company that purchases your company after we have issued your certificate. 
   (2) You may transfer a certificate to a subsidiary including a subsidiary you purchase after we have issued your certificate.
   (3) You may transfer a certificate to a subsidiary of your parent company.

§1068.105  What other provisions apply to me specifically if I manufacture equipment needing certified engines?
This section describes general provisions that apply to equipment manufacturers for sources subject to engine-based standards.  See the standard-setting part for any requirements that apply for certain applications.  See §1068.101 for penalties associated with violations under this section and for other prohibitions related to your equipment.
(a) Transitioning to new engine-based standards. If new engine-based emission standards apply in a given model year, your equipment produced in that calendar year (or later) must have engines that are certified to the new standards, except that you may continue to use up normal inventories of earlier engines that were built before the date of the new or changed standards.  For purposes of this paragraph (a), normal inventory applies for engines you possess and engines from your engine supplier's normal inventory.  (Note: this paragraph (a) does not apply in the case of new remanufacturing standards.)  We may require you and your engine suppliers to provide us routine production and/or inventory records that document your normal practices for the preceding eight years.  For example, if you have records documenting that your normal inventory practice is to keep on hand a one-month supply of engines based on your upcoming production schedules, and a new tier of standards starts to apply for the 2015 model year, you may order engines consistent with your normal inventory requirements late in the engine manufacturer's 2014 model year and install those engines in your equipment consistent with your normal production schedule.  Also, if your model year starts before the end of the calendar year preceding new standards, you may use engines from the previous model year for those units you completely assemble before January 1 of the year that new standards apply.  If emission standards for the engine do not change in a given model year, you may continue to install engines from the previous model year without restriction (or any earlier model year for which the same standards apply).  You may not circumvent the provisions of §1068.101(a)(1) by stockpiling engines that were built before new or changed standards take effect.  Similarly, you may not circumvent the provisions of §1068.101(a)(1) by knowingly installing engines that were stockpiled by engine suppliers in violation of §1068.103(f).  Note that this allowance does not apply for equipment subject to equipment-based standards.  See 40 CFR 1060.601 for similar provisions that apply for equipment subject to evaporative emission standards.  Note that the standard-setting part may impose further restrictions on using up inventories of engines from an earlier model year under this paragraph (a).
(b)  Installing engines or certified components.  The provisions in §1068.101(a)(1) generally prohibit you from introducing into U.S. commerce any new equipment that includes engines not covered by a certificate of conformity.  In addition, you must follow the engine manufacturer's emission-related installation instructions.  For example, you may need to constrain where you place an exhaust aftertreatment device or integrate into your equipment models a device for sending visual or audible signals to the operator.  Similarly, you must follow the emission-related installation instructions from the manufacturer of a component that has been certified for controlling evaporative emissions under 40 CFR part 1060.  Not meeting the manufacturer's emission-related installation instructions is a violation of one or more of the prohibitions of §1068.101.  See §1068.261 for special provisions that apply when the engine manufacturer delegates final assembly of emission controls to you.
(c)  Attaching a duplicate label.  If you obscure the engine's label, you must do four things to avoid violating §1068.101(a)(1):
   (1) Send a request for duplicate labels in writing on your company's letterhead to the engine manufacturer.  Include the following information in your request:
      (i) Identify the type of equipment and the specific engine and equipment models needing duplicate labels.
      (ii) Identify the family (from the original engine label).
      (iii) State the reason that you need a duplicate label for each equipment model.
      (iv) Identify the number of duplicate labels you will need.
   (2) Permanently attach the duplicate label to your equipment by securing it to a part needed for normal operation and not normally requiring replacement.  Make sure an average person can easily read it.  Note that attaching an inaccurate duplicate label may be a violation of §1068.101(b)(7).
   (3) Destroy any unused duplicate labels if you find that you will not need them.
   (4) Keep the following records for at least eight years after the end of the model year identified on the engine label:
      (i) Keep a copy of your written request.
      (ii) Keep drawings or descriptions that show how you apply the duplicate labels to your equipment.
      (iii) Maintain a count of those duplicate labels you use and those you destroy.

§1068.110  Other provisions for engines/equipment in service.
(a)  Aftermarket parts and service.  As the certifying manufacturer, you may not require anyone to use your parts or service to maintain or repair an engine or piece of equipment, unless we approve this in your application for certification.  It is a violation of the Clean Air Act for anyone to manufacture any part if one of its main effects is to reduce the effectiveness of the emission controls.  See §1068.101(b)(2).
(b) Certifying aftermarket parts.  As the manufacturer or rebuilder of an aftermarket engine or equipment part, you may -- but are not required to -- certify according to 40 CFR part 85, subpart V, that using the part will not cause engines/equipment to fail to meet emission standards.  Whether you certify or not, you must keep any information showing how your parts or service affect emissions.
(c) Compliance with standards.  We may test engines and equipment to investigate compliance with emission standards and other requirements.  We may also require the manufacturer to do this testing.
(d) Defeat devices.  We may test components, engines, and equipment to investigate potential defeat devices.  We may also require the manufacturer to do this testing.  If we choose to investigate one of your designs, we may require you to show us that a component is not a defeat device, and that an engine/equipment does not have a defeat device.  To do this, you may have to share with us information regarding test programs, engineering evaluations, design specifications, calibrations, on-board computer algorithms, and design strategies.  It is a violation of the Clean Air Act for anyone to make, install or use defeat devices as described in §1068.101(b)(2) and the standard-setting part.
(e) Warranty and maintenance. Owners are responsible for properly maintaining their engines/equipment; however, owners may make warranty claims against the manufacturer for all expenses related to diagnosing and repairing or replacing emission-related parts, as described in §1068.115.  Manufacturers may ask to limit diagnosis and repair to authorized service facilities, provided this does not limit their ability to meet their warranty obligations under §1068.115.   The warranty period begins when the equipment is first placed into service.  See the standard-setting part for specific requirements.  It is a violation of the Clean Air Act for anyone to disable emission controls; see §1068.101(b)(1) and the standard-setting part.

--------------------------------------------------------------------------------
§ 1068.115  What are manufacturers' emission-related warranty requirements? 
Section 207(a) of the Clean Air Act (42 U.S.C. 7541(a)) requires certifying manufacturers to warrant to purchasers that their engines/equipment are designed, built, and equipped to conform at the time of sale to the applicable regulations for their full useful life, including a warranty that the engines/equipment are free from defects in materials and workmanship that would cause any engine/equipment to fail to conform to the applicable regulations during the specified warranty period. This section codifies the warranty requirements of section 207(a) without intending to limit these requirements.
(a) As a certifying manufacturer, you may deny warranty claims only for failures that have been caused by the owner's or operator's improper maintenance or use, by accidents for which you have no responsibility, or by acts of God. For example, you would not need to honor warranty claims for failures that have been directly caused by the operator's abuse of the engine/equipment or the operator's use of the engine/equipment in a manner for which it was not designed and are not attributable to you in any way.
(b) As a certifying manufacturer, you may not deny emission-related warranty claims based on any of the following:
   (1) Maintenance or other service you or your authorized facilities performed.
   (2) Engine/equipment repair work that an operator performed to correct an unsafe, emergency condition attributable to you as long as the operator tries to restore the engine/equipment to its proper configuration as soon as possible.
   (3) Any action or inaction by the operator unrelated to the warranty claim.
   (4) Maintenance that was performed more frequently than you specify.
   (5) Anything that is your fault or responsibility.
   (6) The use of any fuel that is commonly available where the equipment operates unless your written maintenance instructions state that this fuel would harm the equipment's emission control system and operators can readily find the proper fuel.

§1068.120  Requirements for rebuilding engines.
(a) This section describes the steps to take when rebuilding engines to avoid violating the tampering prohibition in §1068.101(b)(1).  These requirements apply to anyone rebuilding an engine subject to this part, but the recordkeeping requirements in paragraphs (j) and (k) of this section apply only to businesses.  For maintenance or service that is not rebuilding, including any maintenance related to evaporative emission controls, you may not make changes that might increase emissions of any regulated pollutant, but you do not need to keep any records. 
(b)  The term "rebuilding" r0efers to a rebuild of an engine or engine system, including a major overhaul in which you replace the engine's pistons or power assemblies or make other changes that significantly increase the service life of the engine.  It also includes replacing or rebuilding an engine's turbocharger or aftercooler or the engine's systems for fuel metering or electronic control so that it significantly increases the service life of the engine.  For these provisions, rebuilding may or may not involve removing the engine from the equipment.  Rebuilding does not normally include the following:
   (1)  Scheduled emission-related maintenance that the standard-setting part allows during the useful life period (such as replacing fuel injectors). 
   (2) Unscheduled maintenance that occurs commonly within the useful life period.  For example, replacing a water pump is not rebuilding an engine.
(c) [Reserved]
(d) If you rebuild an engine or engine system, you must have a reasonable technical basis for knowing that the rebuilt engine's emission control system performs as well as, or better than, it performs in its certified configuration.  Identify the model year of the resulting engine configuration. You have a reasonable basis if you meet two main conditions: 
   (1) Install parts --  new, used, or rebuilt --  so a person familiar with engine design and function would reasonably believe that the engine with those parts will control emissions of all pollutants at least to the same degree as with the original parts.  For example, it would be reasonable to believe that parts performing the same function as the original parts (and to the same degree) would control emissions to the same degree as the original parts.
   (2) Adjust parameters or change design elements only according to the original engine manufacturer's instructions.  Or, if you differ from these instructions, you must have data or some other technical basis to show you should not expect in-use emissions to increase.
(e)  If the rebuilt engine remains installed or is reinstalled in the same piece of equipment, you must rebuild it to the original configuration, except as allowed by this paragraph (e).  You may rebuild it to a different certified configuration of the same or later model year.  You may also rebuild it to a certified configuration from an earlier model year as long as the earlier configuration is as clean or cleaner than the original configuration.  For purposes of this paragraph (e), "as clean or cleaner" means one of the following:
   (1) For engines not certified with a Family Emission Limit for calculating credits for a particular pollutant, this means that the same emission standard applied for both model years.  This includes supplemental standards such as Not-to-Exceed standards.
   (2) For engines certified with a Family Emission Limit for a particular pollutant, this means that the configuration to which the engine is being rebuilt has a Family Emission Limit for that pollutant that is at or below the standard that applied to the engine originally, and is at or below the original Family Emission Limit.
(f) A rebuilt engine or other used engine may replace a certified engine in a piece of equipment only if the engine was built and/or rebuilt to a certified configuration meeting equivalent or more stringent emission standards.  Note that a certified configuration would generally include more than one model year.  A rebuilt engine being installed that is from the same model year or a newer model year than the engine being replaced meets this requirement.  The following examples illustrate the provisions of this paragraph (f):
   (1) In most cases, you may use a rebuilt Tier 2 engine to replace a Tier 1 engine or another Tier 2 engine. 
   (2) You may use a rebuilt Tier 1 engine to replace a Tier 2 engine if the two engines differ only with respect to model year or other characteristics unrelated to emissions since such engines would be considered to be in the same configuration.  This may occur if the Tier 1 engine had emission levels below the Tier 2 standards or if the Tier 2 engine was certified with a Family Emission Limit for calculating emission credits. 
   (3) You may use a rebuilt engine that originally met the Tier 1 standards without certification, as provided under §1068.265, to replace a certified Tier 1 engine.  This may occur for engines produced under a Transition Program for Equipment Manufacturers such as that described in 40 CFR 1039.625.
   (4) You may never replace a certified engine with an engine rebuilt to a configuration that does not meet EPA emission standards.  Note that, for purposes of this paragraph (f)(4), a configuration is considered to meet EPA emission standards if it was previously certified or was otherwise shown to meet emission standards (see §1068.265).  
(g)  Do not erase or reset emission-related codes or signals from onboard monitoring systems without diagnosing and responding appropriately to any diagnostic codes.  This requirement applies regardless of the manufacturer's reason for installing the monitoring system and regardless of its form or interface.  Clear any codes from diagnostic systems when you return the rebuilt engine to service.  Do not disable a diagnostic signal without addressing its cause.
(h) When you rebuild an engine, check, clean, adjust, repair, or replace all emission-related components (listed in Appendix I of this part) as needed according to the original manufacturer's recommended practice.  In particular, replace oxygen sensors, replace the catalyst if there is evidence of malfunction, clean gaseous fuel-system components, and replace fuel injectors (if applicable), unless you have a reasonable technical basis for believing any of these components do not need replacement.
(i)  If you are installing an engine that someone else has rebuilt, check all emission-related components listed in Appendix I of this part as needed according to the original manufacturer's recommended practice.
(j)  Keep at least the following records for all engines except spark-ignition engines with total displacement below 225 cc:
   (1)  Identify the hours of operation (or mileage, as appropriate) at the time of rebuild.  These may be noted as approximate values if the engine has no hour meter (or odometer).
   (2)  Identify the work done on the engine or any emission-related control components, including a listing of parts and components you used.
   (3)  Describe any engine parameter adjustments.
   (4)  Identify any emission-related codes or signals you responded to and reset.
(k)  You must show us or send us your records if we ask for them.  Keep records for at least two years after rebuilding an engine.  Keep them in any format that allows us to readily review them.
   (1)  You do not need to keep information that is not reasonably available through normal business practices.  We do not expect you to have information that you cannot reasonably access.
   (2)  You do not need to keep records of what other companies do. 
   (3)  You may keep records based on families rather than individual engines if that is the way you normally do business.

§1068.125  What happens if I violate the regulations?
(a)  Civil penalties and injunctions.  We may bring a civil action to assess and recover civil penalties and/or enjoin and restrain violations in the United States District Court for the district where you allegedly violated a requirement, or the district where you live or have your main place of business.  Actions to assess civil penalties or restrain violations of §1068.101 must be brought by and in the name of the United States.  The selected court has jurisdiction to restrain violations and assess civil penalties.  
   (1)  To determine the amount of a civil penalty and reach a just conclusion, the court considers these factors:
      (i)  The seriousness of your violation.
      (ii)  How much you benefited or saved because of the violation.
      (iii)  The size of your business.
      (iv)  Your history of compliance with Title II of the Clean Air Act (42 U.S.C. 7401-7590).
      (v)  What you did to remedy the violation.
      (vi)  How the penalty will affect your ability to continue in business.
      (vii) Such other matters as justice may require.
   (2)  Subpoenas for witnesses who must attend a district court in any district may apply to any other district.
(b) Administrative penalties. Instead of bringing a civil action, we may assess administrative penalties if the total is less than $320,000 against you individually.  This maximum penalty may be greater if the Administrator and the Attorney General jointly determine that a greater administrative penalty assessment is appropriate, or if the limit is adjusted under 40 CFR part 19.  No court may review this determination.  Before we assess an administrative penalty, you may ask for a hearing as described in subpart G of this part.  The Administrator may compromise or remit, with or without conditions, any administrative penalty that may be imposed under this section. 
   (1)  To determine the amount of an administrative penalty, we will consider the factors described in paragraph (a)(1) of this section.
   (2)  An administrative order we issue under this paragraph (b) becomes final 30 days after we issue it unless you ask for judicial review by that time (see paragraph (c) of this section).  You may ask for review by any of the district courts listed in paragraph (a) of this section.  Send the Administrator a copy of the filing by certified mail.
   (3) We will not pursue an administrative penalty for a particular violation if either of the following two conditions is true: 
      (i) We are separately prosecuting the violation under this subpart.
      (ii) We have issued a final order for a violation, no longer subject to judicial review, for which you have already paid a penalty.
(c)  Judicial review.  If you ask a court to review a civil or administrative penalty, we will file in the appropriate court within 30 days of your request a certified copy or certified index of the record on which the court or the Administrator issued the order.  
   (1)  The judge may set aside or remand any order issued under this section only if one of the following is true:
      (i)  Substantial evidence does not exist in the record, taken as a whole, to support finding a violation.
      (ii)  The Administrator's assessment of the penalty is an abuse of discretion.
   (2)  The judge may not add civil penalties unless our penalty is an abuse of discretion that favors you.
(d)  Effect of enforcement actions on other requirements.  Our pursuit of civil or administrative penalties does not affect or limit our authority to enforce any provisions of this chapter.
(e)  Penalties.  In any proceedings, the United States government may seek to collect civil penalties assessed under this section.
   (1)  Once a penalty assessment is final, if you do not pay it, the Administrator will ask the Attorney General to bring a civil action in an appropriate district court to recover the money.  We may collect interest from the date of the final order or final judgment at rates established by the Internal Revenue Code of 1986 (26 U.S.C. 6621(a)(2)).  In this action to collect overdue penalties, the court will not review the validity, amount, and appropriateness of the penalty.
   (2) In addition, if you do not pay the full amount of a penalty on time, you must then pay more to cover interest, enforcement expenses (including attorney's fees and costs for collection), and a quarterly nonpayment penalty for each quarter you do not pay.  The quarterly nonpayment penalty is 10 percent of your total penalties plus any unpaid nonpayment penalties from previous quarters.
Subpart C --  Exemptions and Exclusions


§1068.201   General exemption and exclusion provisions.
We may exempt new engines/equipment from some or all of the prohibited acts or requirements of this part under provisions described in this subpart.  We may exempt engines/equipment already placed in service in the United States from the prohibition in §1068.101(b)(1) if the exemption for engines/equipment used solely for competition applies (see §1068.235).  In addition, see §1068.1 and the standard-setting parts to determine if other engines/equipment are excluded from some or all of the regulations in this chapter.
(a) This subpart identifies which engines/equipment qualify for exemptions and what information we need.  We may require more information.
(b) If you violate any of the terms, conditions, instructions, or requirements to qualify for an exemption, we may void, revoke, or suspend the exemption.
(c) If you use an exemption under this subpart, we may require you to add a permanent or temporary label to your exempted engines/equipment.  You may ask us to modify these labeling requirements if it is appropriate for your engine/equipment.
(d) If you produce engines/equipment we exempt under this subpart, we may require you to make and keep records, perform tests, make reports and provide information as needed to reasonably evaluate the validity of the exemption.
(e) If you own or operate engines/equipment we exempt under this subpart, we may require you to provide information as needed to reasonably evaluate the validity of the exemption.
(f) Subpart D of this part describes how we apply these exemptions to engines/equipment you import (or intend to import).
(g) If you want to ask for an exemption or need more information, write to the Designated Compliance Officer.
(h) You may ask us to modify the administrative requirements for the exemptions described in this subpart or in subpart D of this part.  We may approve your request if we determine that such approval is consistent with the intent of this part.  For example, waivable administrative requirements might include some reporting requirements, but would not include any eligibility requirements or use restrictions.
(i) If you want to take an action with respect to an exempted or excluded engine/equipment that is prohibited by the exemption or exclusion, such as selling it, you need to certify the engine/equipment or qualify for a different exemption.  
   (1) We will issue a certificate of conformity if you send us an application for certification showing that you meet all the applicable requirements from the standard-setting part and pay the appropriate fee.  Alternatively, we may allow you to include in an existing certified engine family those engines/equipment you modify (or otherwise demonstrate) to be identical to engines/equipment already covered by the certificate.  We would base such an approval on our review of any appropriate documentation.  These engines/equipment must have emission control information labels that accurately describe their status. 
   (2) The exemption provisions of this part may be applied to new engines without regard to whether or not they have already been certified or exempted.  You may ask to apply the exemption provisions prospectively to used engines to cover circumstances not otherwise allowed by the original certification or exemption.  Note that application of new exemption provisions does not apply with respect to actions that occur before the new exemption applies. For example, you may ask for a testing exemption for a new or used engine that has already been introduced into commerce under a competition exemption, but the testing exemption would not cover non-competition use that occurred before we approved the testing exemption.   

§1068.210  Exempting test engines/equipment.
(a) We may exempt engines/equipment that you will use for research, investigations, studies, demonstrations, or training.  Note that you are not required to get an exemption under this section for engines that are exempted under other provisions of this part, such as the manufacturer-owned exemption in §1068.215.
(b) Anyone may ask for a testing exemption.  
(c)  If you are a certificate holder, you may request an exemption for engines/equipment you intend to include in test programs over a two-year period. 
   (1) In your request, tell us the maximum number of engines/equipment involved and describe how you will make sure exempted engines/equipment are used only for this testing.  For example, if the exemption will involve other companies using your engines/equipment, describe your plans to track individual units so you can properly report on their final disposition. 
   (2) Give us the information described in paragraph (d) of this section if we ask for it.
 (d)  If you are not a certificate holder, do all the following things: 
   (1)  Show that the proposed test program has a valid purpose under paragraph (a) of this section.
   (2)  Show you need an exemption to achieve the purpose of the test program (time constraints may be a basis for needing an exemption, but the cost of certification alone is not).
   (3)  Estimate the duration of the proposed test program and the number of engines/equipment involved.
   (4)  Allow us to monitor the testing.
   (5)  Describe how you will ensure that you stay within this exemption's purposes.  Address at least the following things:
      (i) The technical nature of the test.
      (ii) The test site.
      (iii) The duration and accumulated engine/equipment operation associated with the test.
      (iv) Ownership and control of the engines/equipment involved in the test.
      (v) The intended final disposition of the engines/equipment.
      (vi) How you will identify, record, and make available the engine/equipment identification numbers.
      (vii) The means or procedure for recording test results.
(e)  If we approve your request for a testing exemption, we will send you a letter or a memorandum describing the basis and scope of the exemption.  It will also include any necessary terms and conditions, which normally require you to do the following:
   (1)  Stay within the scope of the exemption.
   (2)  Create and maintain adequate records that we may inspect.
   (3)  Add a permanent label to all engines/equipment exempted under this section, consistent with §1068.45, with at least the following items: 
      (i) The label heading "EMISSION CONTROL INFORMATION".
      (ii) Your corporate name and trademark.
      (iii) Engine displacement, family identification, and model year of the engine/equipment (as applicable), or whom to contact for further information.
      (iv) The statement: "THIS [engine, equipment, vehicle, etc.]IS EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 FROM EMISSION STANDARDS AND RELATED REQUIREMENTS." 
   (4)  Tell us when the test program is finished.
   (5)  Tell us the final disposition of the engines/equipment.
   

§1068.215  Exempting manufacturer-owned engines/equipment.
(a)  You are eligible for this exemption for manufacturer-owned engines/equipment only if you are a certificate holder.  Any engine for which you meet all applicable requirements under this section is exempt without request.
(b)  Engines/equipment may be exempt without a request if they are nonconforming engines/equipment under your ownership, possession, and control and you do not operate them for purposes other than to develop products, assess production methods, or promote your engines/equipment in the marketplace, or other purposes we approve.  You may not loan, lease, sell, or use the engine/equipment to generate revenue, either by itself or for an engine installed in a piece of equipment, except as allowed by §1068.201(i).  Note that this paragraph (b) does not prevent the sale or shipment of a partially complete engine to a secondary engine manufacturer that will meet the requirements of this paragraph (b).  See §1068.262 for provisions related to shipping partially complete engines to secondary engine manufacturers.  
(c)  To use this exemption, you must do three things: 
   (1) Establish, maintain, and keep adequately organized and indexed information on all exempted engines/equipment, including the engine/equipment identification number, the use of the engine/equipment on exempt status, and the final disposition of any engine/equipment removed from exempt status.
   (2)  Let us access these records, as described in §1068.20.
   (3)  Add a permanent label to all engines/equipment exempted under this section, consistent with §1068.45, with at least the following items: 
      (i) The label heading "EMISSION CONTROL INFORMATION".
      (ii) Your corporate name and trademark.
      (iii) Family identification and model year of the engine/equipment (as applicable), or whom to contact for further information.
      (iv) The statement: "THIS [engine, equipment, vehicle, etc.] IS EXEMPT UNDER 40 CFR 1068.210 OR 1068.215 FROM EMISSION STANDARDS AND RELATED REQUIREMENTS." 

§1068.220  Exempting display engines/equipment.
(a) Anyone may request an exemption for display engines/equipment.  
(b) Nonconforming display engines/equipment will be exempted if they are used only for displays in the interest of a business or the general public.  This exemption does not apply to engines/equipment displayed for private use, private collections, or any other purpose we determine is inappropriate for a display exemption.
(c)  You may operate the exempted engine/equipment, but only if we approve specific operation that is part of the display, or is necessary for the display (possibly including operation that is indirectly necessary for the display).  We may consider any relevant factor in our approval process, including the extent of the operation, the overall emission impact, and whether the engine/equipment meets emission requirements of another country.
(d)  You may sell or lease the exempted engine/equipment only with our advance approval.
(e)  To use this exemption, you must add a permanent label to all engines/equipment exempted under this section, consistent with §1068.45, with at least the following items: 
   (1) The label heading "EMISSION CONTROL INFORMATION".
   (2) Your corporate name and trademark.
   (3) Engine displacement, family identification, and model year of the engine/equipment (as applicable), or whom to contact for further information.
   (4) The statement: "THIS [engine, equipment, vehicle, etc.]IS EXEMPT UNDER 40 CFR 1068.220 FROM EMISSION STANDARDS AND RELATED REQUIREMENTS." 
(f)  We may set other conditions for approval of this exemption.

§1068.225  Exempting engines/equipment for national security.
(a) An engine/equipment is exempt without a request if it will be used or owned by an agency of the federal government responsible for national defense, where the equipment in which it is installed has armor, permanently attached weaponry, or other substantial features typical of military combat. 
(b) Manufacturers may request a national security exemption for engines/equipment not meeting the conditions of paragraph (a) of this section as long as the request is endorsed by an agency of the federal government responsible for national defense. In your request, explain why you need the exemption.
(c) [Reserved].
(d) Add a permanent label to all engines/equipment exempted under this section, consistent with §1068.45, with at least the following items: 
   (1) The label heading "EMISSION CONTROL INFORMATION".
   (2) Your corporate name and trademark.
   (3) Engine displacement, family identification, and model year of the engine/equipment (as applicable), or whom to contact for further information.
   (4) The statement: "THIS [engine, equipment, vehicle, etc.] HAS AN EXEMPTION FOR NATIONAL SECURITY UNDER 40 CFR 1068.225." 
      

§1068.230  Exempting engines/equipment for export.
The provisions of this section apply differently depending on the country to which the engines/equipment are being exported. 
(a) We will not exempt new engines/equipment if you export them to a country with emission standards identical to ours, in which case they must be covered by a certificate of conformity.  Where we determine that such engines/equipment will not be placed into service in the United States, the following provisions apply for special export-only certification:
   (1) The engines/equipment must be covered by a certificate of conformity or equivalent approval issued by the destination country.
   (2) To get an export-only certificate of conformity, send the Designated Compliance Officer a request.  We may require you to provide information such as documentation of the foreign certification and related test data. 
   (3) No fees apply for export-only certification.
   (4) The engines/equipment must be labeled as specified in paragraph (d) of this section.
   (5) This export-only certificate is not considered a valid certificate of conformity with respect to the prohibition in §1068.101(a)(1) for sale to ultimate purchasers in the United States.  These engines/equipment also may not reenter the United States unless the regulations of this chapter otherwise allow it.
(b)  Engines/equipment exported to a country not covered by paragraph (a) of this section are exempt from the prohibited acts in this part without a request.  If you produce exempt engines/equipment for export and any of them are sold or offered for sale to an ultimate purchaser in the United States, the exemption is automatically void for those engines/equipment. You may operate engines/equipment in the United States only as needed to prepare and deliver them for export.
(c) Except as specified in paragraph (d) of this section, label exempted engines/equipment (including shipping containers if the label on the engine/equipment will be obscured by the container) with a label showing that they are not certified for sale or use in the United States.  This label may be permanent or removable.  See §1068.45 for provisions related to the use of removable labels and applying labels to containers without labeling individual engines/equipment.  The label must include your corporate name and trademark and the following statement:  "THIS [engine, equipment, vehicle, etc.] IS SOLELY FOR EXPORT AND IS THEREFORE EXEMPT UNDER 40 CFR 1068.230 FROM U.S. EMISSION STANDARDS AND RELATED REQUIREMENTS." 
(d) You must apply a permanent label as specified in this paragraph (d) for engines/equipment certified under paragraph (a) of this section.  You may apply a permanent label as specified in this paragraph (d) instead of the label specified in paragraph (c) of this section for exempted engines/equipment.  Add a permanent label meeting the requirements of the destination country and include in the bill of lading a statement that the engines/equipment must be exported to avoid violating EPA regulations.  We may modify applicable labeling requirements to align with the labeling requirements that apply for the destination country.
(e) We may set other reasonable conditions to ensure that engines/equipment exempted under this section are not placed into service in the United States.
(f) Exemptions under this section expire once engines are no longer in the United States.  Therefore exemptions under this section do not allow engines to be imported back into the United States.

§1068.235  Exempting nonroad engines/equipment used solely for competition.
The following provisions apply for nonroad engines/equipment, but not for motor vehicles:
(a) New nonroad engines/equipment you produce that are used solely for competition are excluded from emission standards.  We may exempt (rather than exclude) new nonroad engines/equipment you produce that you intend to be used solely for competition, where we determine that such engines/equipment are unlikely to be used contrary to your intent.  See the standard-setting parts for specific provisions where applicable.  Note that the definitions in the standard-setting part may deem uncertified engines/equipment to be new upon importation.
(b) If you modify any nonroad engines/equipment after they have been placed into service in the United States so they will be used solely for competition, they are exempt without request. This exemption applies only to the prohibitions in §1068.101(b)(1) and (2) and are valid only as long as the engine/equipment is used solely for competition. You may not use the provisions of this paragraph (b) to circumvent the requirements that apply to the sale of new competition engines under the standard-setting part.
(c) If you modify any nonroad engines/equipment under paragraph (b) of this section, you must destroy the original emission labels. If you loan, lease, sell, or give any of these engines/equipment to someone else, you must tell the new owner (or operator, if applicable) in writing that they may be used only for competition.

§1068.240  Exempting new replacement engines.
The prohibitions in § 1068.101(a)(1) do not apply to a new engine if it is exempt under this section as a replacement engine.  For purposes of this section, a replacement engine is a new engine that is used to replace an engine that has already been placed into service (whether the previous engine is replaced in whole or in part with a new engine).  
(a) General provisions. You are eligible for the exemption for new replacement engines only if you are a certificate holder. Note that this exemption does not apply for locomotives (40 CFR 1033.601) and that unique provisions apply to marine compression-ignition engines (40 CFR 1042.615). 
   (1) Paragraphs (b), (c), and (d) of this section describe different approaches for exempting new replacement engines where the engines are specially built to correspond to an engine model from an earlier model year that was subject to less stringent standards than those that apply for current production (or is no longer covered by a certificate of conformity).  You must comply with the requirements of paragraph (b) of this section for any number of replacement engines you produce in excess of what we allow under paragraph (c) of this section.  You must designate engines you produce under this section as tracked engines under paragraph (b) of this section or untracked engines under paragraph (c) of this section by the deadline for the report specified in paragraph (c)(3) of this section.
   (2) Paragraph (e) of this section describes a simpler approach for exempting partially complete new replacement engines that are built under a certificate of conformity that is valid for producing engines for the current model year.  
   (3) For all the different approaches described in paragraphs (b) through (e) of this section, the exemption applies only for equipment that is 40 years old or less at the time of installation.  
(b) Previous-tier replacement engines with tracking. You may produce any number of new engines to replace an engine already placed into service in a piece of equipment, as follows: 
   (1) The engine being replaced must have been either not originally subject to emission standards or originally subject to less stringent emission standards than those that apply to a new engine meeting current standards.  The provisions of this paragraph (b) also apply for engines that were originally certified to the same standards that apply for the current model year if you no longer have a certificate of conformity to continue producing that engine configuration.
   (2) The following requirements and conditions apply for engines exempted under this paragraph (b):
      (i) You must determine that you do not produce an engine certified to meet current requirements that has the appropriate physical or performance characteristics to repower the equipment. If the engine being replaced was made by a different company, you must make this determination also for engines produced by this other company.
      (ii) In the case of premature engine failure, if the old engine was subject to emission standards, you must make the new replacement engine in a configuration identical in all material respects to the old engine and meet the requirements of § 1068.265. You may alternatively make the new replacement engine in a configuration identical in all material respects to another certified engine of the same or later model year as long as the engine is not certified with a family emission limit higher than that of the old engine.
      (iii) For cases not involving premature engine failure, you must make a separate determination for your own product line addressing every tier of emission standards that is more stringent than the emission standards for the engine being replaced. For example, if the engine being replaced was built before the Tier 1 standards started to apply and engines of that power category are currently subject to Tier 3 standards, you must also consider whether any Tier 1 or Tier 2 engines that you produce have the appropriate physical and performance characteristics for replacing the old engine; if you produce a Tier 2 engine with the appropriate physical and performance characteristics, you must use it as the replacement engine.  
      (iv) You must keep records to document your basis for making the determinations in paragraphs (b)(2)(i) and (iii) of this section.
   (3) An old engine block replaced by a new engine exempted under this paragraph (b) may be reintroduced into U.S. commerce as part of an engine that meets either the current standards for new engines, the provisions for new replacement engines in this section, or another valid exemption.  Otherwise, you must destroy the old engine block or confirm that it has been destroyed.
   (4) If the old engine was subject to emission standards, the replacement engine must meet the appropriate emission standards as specified in § 1068.265.  This generally means you must make the new replacement engine in a previously certified configuration.
   (5) Except as specified in paragraph (d) of this section, you must add a permanent label, consistent with § 1068.45, with your corporate name and trademark and the following additional information:
   (i)  Add the following statement if the new engine may only be used to replace an engine that was not subject to any emission standards under this chapter:
      THIS REPLACEMENT ENGINE IS EXEMPT UNDER 40 CFR 1068.240.  SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN TO REPLACE AN UNREGULATED ENGINE MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.  THIS ENGINE MAY NOT BE INSTALLED IN EQUIPMENT THAT IS MORE THAN 40 YEARS OLD AT THE TIME OF INSTALLATION.
   (ii) Add the following statement if the new engine may replace an engine that was subject to emission standards:
      THIS ENGINE COMPLIES WITH U.S. EPA EMISSION REQUIREMENTS FOR [Identify the appropriate emission standards (by model year, tier, or emission levels) for the replaced engine] ENGINES UNDER 40 CFR 1068.240.  SELLING OR INSTALLING THIS ENGINE FOR ANY PURPOSE OTHER THAN TO REPLACE A [Identify the appropriate emission standards for the replaced engine, by model year(s), tier(s), or emission levels)] ENGINE MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY.  THIS ENGINE MAY NOT BE INSTALLED IN EQUIPMENT THAT IS MORE THAN 40 YEARS OLD AT THE TIME OF INSTALLATION.
   (6) Engines exempt under this paragraph (b) may not be introduced into U.S. commerce before you make the determinations under paragraph (b)(2) of this section, except as specified in this paragraph (b)(6).  We may waive this restriction for engines excluded under paragraph (c)(5) of this section that you ship to a distributor.  Where we waive this restriction, you must take steps to ensure that the engine is installed consistent with the requirements of this paragraph (b).  For example, at a minimum you must report to us annually whether engines we allowed you to ship to a distributor under this paragraph (b)(6) have been placed into service or remain in inventory.  After an engine is placed into service, your report must describe how the engine was installed consistent with the requirements of this paragraph (b).  Send these reports to the Designated Compliance Officer by the deadlines we specify.
(c) Previous-tier replacement engines without tracking. You may produce a limited number of new replacement engines that are not from a currently certified engine family under the provisions of this paragraph (c). If you produce new engines under this paragraph (c) to replace engines subject to emission standards, the new replacement engine must be in a configuration identical in all material respects to the old engine and meet the requirements of § 1068.265. You may make the new replacement engine in a configuration identical in all material respects to another certified engine of the same or later model year as long as the engine is not certified with a family emission limit higher than that of the old engine.  The provisions of this paragraph (c) also apply for engines that were originally certified to the same standards that apply for the current model year if you no longer have a certificate of conformity to continue producing that engine configuration.  This would apply, for example, for engine configurations that were certified in an earlier model year but are no longer covered by a certificate of conformity. The following provisions apply to engines exempted under this paragraph (c):
   (1) You may produce a limited number of replacement engines under this paragraph (c) representing 0.5 percent of your annual production volumes for each category and subcategory of engines identified in Table 1 to this section (1.0 percent through 2013).  Calculate this number by multiplying your annual U.S.-directed production volume by 0.005 (or 0.01 through 2013) and rounding to the nearest whole number.  Determine the appropriate production volume by identifying the highest total annual U.S.-directed production volume of engines from the previous three model years for all your certified engines from each category or subcategory identified in Table 1 to this section, as applicable.  In unusual circumstances, you may ask us to base your production limits on U.S.-directed production volume for a model year more than three years prior.  You may include stationary engines and exempted engines as part of your U.S.-directed production volume.  Include U.S.-directed engines produced by any parent or subsidiary companies and those from any other companies you license to produce engines for you. 
   (2) Count every exempted new replacement engine from your total U.S.-directed production volume that you produce in a given calendar year under this paragraph (c), including partially complete engines, except for the following:
      (i) Engines built to specifications for an earlier model year under paragraph (b) of this section.
      (ii) Partially complete engines exempted under paragraph (e) of this section.
   (3) Send the Designated Compliance Officer a report by September 30 of the year following any year in which you produced exempted replacement engines under this paragraph (c).  In your report include the total number of replacement engines you produce under this paragraph (c) for each category or subcategory, as appropriate, and the corresponding total production volumes determined under paragraph (c)(1) of this section.  If you send us a report under this paragraph (c)(3), you must also include the total number of replacement engines you produced under paragraphs (b), (d), and (e) of this section.  Count exempt engines as tracked under paragraph (b) of this section only if you meet all the requirements and conditions that apply under paragraph (b) of this section by the due date for the annual report.  You may include the information required under this paragraph (c)(3) in production reports required under the standard-setting part.
   (4) Add a permanent label as specified in paragraph (b)(5) of this section. For partially complete engines, you may alternatively add a permanent or removable label as specified in paragraph (d) of this section.
   (5) You may not use the provisions of this paragraph (c) for any engines in the following engine categories or subcategories:
      (i) Land-based nonroad compression-ignition engines we regulate under 40 CFR part 1039 with a per-cylinder displacement at or above 7.0 liters.
      (ii) Marine compression-ignition engines we regulate under 40 CFR part 1042 with a per-cylinder displacement at or above 7.0 liters.
      (iii) Locomotive engines we regulate under 40 CFR part 1033.
(d) Partially complete engines.  The following requirements apply if you ship a partially complete replacement engine under this section:
   (1) Provide instructions specifying how to complete the engine assembly such that the resulting engine conforms to the applicable certificate of conformity or the specifications of § 1068.265.  Where a partially complete engine can be built into multiple different configurations, you must be able to identify all the engine models and model years for which the partially complete engine may properly be used for replacement purposes.  Your instructions must make clear how the final assembler can determine which configurations are appropriate for the engine they receive. 
   (2) You must label the engine as follows:
      (i) If you have a reasonable basis to believe that the fully assembled engine will include the original emission control information label, you may add a removable label to the engine with your corporate name and trademark and the statement: "This replacement engine is exempt under 40 CFR 1068.240."  This would generally apply if all the engine models that are compatible with the replacement engine were covered by a certificate of conformity and they were labeled in a position on the engine or equipment that is not included as part of the partially complete engine being shipped for replacement purposes.  Removable labels must meet the requirements specified in § 1068.45.
      (ii) If you do not qualify for using a removable label in paragraph (d)(1) of this section, you must add a permanent label in a readily visible location, though it may be obscured after installation in a piece of equipment.  Include on the permanent label your corporate name and trademark, the engine's part number (or other identifying information), and the statement: "THIS REPLACEMENT ENGINE IS EXEMPT UNDER 40 CFR 1068.240. THIS ENGINE MAY NOT BE INSTALLED IN EQUIPMENT THAT IS MORE THAN 40 YEARS OLD AT THE TIME OF INSTALLATION."  If there is not enough space for this statement, you may alternatively add: "REPLACEMENT" or "SERVICE ENGINE".   For purposes of this paragraph (d)(2), engine part numbers permanently stamped or engraved on the engine are considered to be included on the label.
(e) Partially complete current-tier replacement engines. The provisions of paragraph (d) of this section apply for engines you produce from a current line of certified engines or vehicles if you ship them as partially complete engines for replacement purposes.  This applies for engine-based and equipment-based standards as follows:
   (1) Where engine-based standards apply, you may introduce into U.S. commerce short blocks or other partially complete engines from a currently certified engine family as replacement components for in-use equipment powered by engines you originally produced.  You must be able to identify all the engine models and model years for which the partially complete engine may properly be used for replacement purposes.  
   (2) Where equipment-based standards apply, you may introduce into U.S. commerce engines that are identical to engines covered by a current certificate of conformity by demonstrating compliance with currently applicable standards where the engines will be installed as replacement engines.  These engines might be fully assembled, but we would consider them to be partially complete engines because they are not yet installed in the equipment. 
(f) Emission credits. Replacement engines exempted under this section may not generate or use emission credits under the standard-setting part nor be part of any associated credit calculations.
                                       
         Table 1 to § 1068.240 -- Engine categories and subcategories 
            for new replacement engines exempted without tracking 
Engine category
                           Standard-setting part[1]
                             Engine subcategories
Highway CI
                                40 CFR part 86
                             disp. < 0.6 L/cyl

                                       
                         0.6 < disp. < 1.2 L/cyl

                                       
                             disp. > 1.2 L/cyl
Nonroad CI, Stationary CI, and Marine CI
                             40 CFR part 1039, or
                               40 CFR part 1042
                             disp. < 0.6 L/cyl

                                       
                         0.6 < disp. < 1.2 L/cyl

                                       
                         1.2 < disp. < 2.5 L/cyl

                                       
                         2.5 < disp. < 7.0 L/cyl
Marine SI
                               40 CFR part 1045
                                   outboard

                                       
                              personal watercraft
Large SI, Stationary SI, and Marine SI (sterndrive/ inboard only)
                              40 CFR part 1048 or
                               40 CFR part 1045
                                  all engines
Recreational vehicles
                               40 CFR part 1051
                            off-highway motorcycle

                                       
                              all-terrain vehicle

                                       
                                  snowmobile
Small SI and Stationary SI
                               40 CFR part 1054
                                   handheld
                                       
                                       
                                    Class I
                                       
                                       
                                   Class II
[1] Include an engine as being subject to the identified standard-setting part if it will eventually be subject to emission standards under that part.  For example, if you certify marine compression-ignition engines under part 94, count those as if they were already subject to part 1042.


§1068.245  Temporary provisions addressing hardship due to unusual circumstances.
(a) After considering the circumstances, we may permit you to introduce into U.S. commerce engines/equipment that do not comply with emission-related requirements for a limited time if all the following conditions apply:
   (1) Unusual circumstances that are clearly outside your control prevent you from meeting requirements from this chapter.
   (2) You exercised prudent planning and were not able to avoid the violation; you have taken all reasonable steps to minimize the extent of the nonconformity.
   (3) No other allowances are available under the regulations in this chapter to avoid the impending violation, including the provisions of §1068.250.
   (4) Not having the exemption will jeopardize the solvency of your company
(b) If your unusual circumstances are only related to compliance with the model-year provisions of §1068.103(f), we may grant hardship under this section without a demonstration that the solvency of your company is in jeopardy as follows:
   (1) You must demonstrate that the conditions specified in paragraphs (a)(1) through (3) of this section apply.
   (2) Your engines/equipment must comply with standards and other requirements that would have applied if assembly were completed on schedule. 
   (3) You may generally request this exemption only for engines/equipment for which assembly has been substantially completed; you may not begin assembly of any additional engines/equipment under this exemption after the cause for delay has occurred.  We may make an exception to this general restriction for secondary engine manufacturers. 
   (4) As an example, if your normal production process involves purchase of partially complete engines and a supplier fails to deliver all the ordered engines in time for your assembly according to your previously established schedule as a result of a fire at its factory, you may request that we treat those engine as if they had been completed on the original schedule.  Note that we would grant relief only for those engines where you had a reasonable basis for expecting the engines to be delivered on time based on past performance and terms of purchase.
(c) To apply for an exemption, you must send the Designated Compliance Officer a written request as soon as possible before you are in violation.  In your request, show that you meet all the conditions and requirements in paragraph (a) of this section.
(d) Include in your request a plan showing how you will meet all the applicable requirements as quickly as possible.
(e) You must give us other relevant information if we ask for it.
(f) We may include reasonable additional conditions on an approval granted under this section, including provisions to recover or otherwise address the lost environmental benefit or paying fees to offset any economic gain resulting from the exemption.  For example, in the case of multiple tiers of emission standards, we may require that you meet the standards from the previous tier whether or not your hardship is granted under paragraph (b) of this section.
(g) Add a permanent label to all engines/equipment exempted under this section, consistent with §1068.45, with at least the following items: 
   (1) The label heading "EMISSION CONTROL INFORMATION".
   (2) Your corporate name and trademark.
   (3) Engine displacement (in liters or cubic centimeters), and model year of the engine/equipment, (as applicable); or whom to contact for further information.  We may also require that you include maximum engine power. 
   (4) A statement describing the engine's status as an exempted engine:
      (i) If the engine/equipment does not meet any emission standards, add the following statement:"THIS [engine, equipment, vehicle, etc.] IS EXEMPT UNDER 40 CFR 1068.245 FROM EMISSION STANDARDS AND RELATED REQUIREMENTS." 
      (ii) If the engines/equipment meet alternate emission standards as a condition of an exemption under this section, we may specify a different statement to identify the alternate emission standards.

§1068.250 Extending compliance deadlines for small businesses under hardship.
(a)  After considering the circumstances, we may extend the compliance deadline for you to meet new or revised emission standards as long as you meet all the conditions and requirements in this section.  
(b)  You must be a small business to be eligible for this exemption.
(c) Send the Designated Compliance Officer a written request for an extension as soon as possible before you are in violation.  In your request, show that all the following conditions and requirements apply:  
   (1)  You have taken all possible business, technical, and economic steps to comply.  
      (i) In the case of importers of engines/equipment produced by other companies, show that you attempted to find a manufacturer capable of supplying complying products as soon as you became aware of the applicable requirements but were unable to do so.
      (ii) For all other manufacturers, show that the burden of compliance costs prevents you from meeting the requirements of this chapter.
   (2)  Not having the exemption will jeopardize the solvency of your company.
   (3)  No other allowances are available under the regulations in this chapter to avoid the impending violation.
(d) In describing the steps you have taken to comply under paragraph (c)(1) of this section, include at least the following information:
   (1)  Describe your business plan, showing the range of projects active or under consideration.
   (2) Describe your current and projected financial status, with and without the burden of complying fully with the applicable regulations in this chapter.
   (3)  Describe your efforts to raise capital to comply with regulations in this chapter (this may not apply for importers).
   (4) Identify the engineering and technical steps you have taken or those you plan to take to comply with regulations in this chapter.
   (5)  Identify the level of compliance you can achieve.  For example, you may be able to produce engines/equipment that meet a somewhat less stringent emission standard than the regulations in this chapter require.
(e)  Include in your request a plan showing how you will meet all the applicable requirements as quickly as possible.
(f)  You must give us other relevant information if we ask for it.
(g)  An authorized representative of your company must sign the request and include the statement: "All the information in this request is true and accurate to the best of my knowledge."
(h) [Reserved]
(i)  We may include reasonable requirements on an approval granted under this section, including provisions to recover or otherwise address the lost environmental benefit.  For example, we may require that you meet a less stringent emission standard or buy and use available emission credits.  
(j) We may approve extensions of the compliance deadlines as reasonable under the circumstances up to one model year at a time, and up to three years total.
(k) Add a permanent label to all engines/equipment exempted under this section, consistent with §1068.45, with at least the following items: 
   (1) The label heading "EMISSION CONTROL INFORMATION".
   (2) Your corporate name and trademark.
   (3) Engine displacement (in liters or cubic centimeters), and model year of the engine/equipment (as applicable); or whom to contact for further information.  We may also require that you include maximum engine power. 
   (4) A statement describing the engine's status as an exempted engine:
      (i) If the engine/equipment does not meet any emission standards, add the following statement:"THIS [engine, equipment, vehicle, etc.] IS EXEMPT UNDER 40 CFR 1068.250 FROM EMISSION STANDARDS AND RELATED REQUIREMENTS." 
      (ii) If the engine/equipment meets alternate emission standards as a condition of an exemption under this section, we may specify a different statement to identify the alternate emission standards.

§1068.255  Exempting engines and fuel-system components for hardship for equipment manufacturers and secondary engine manufacturers.
This section describes how, in unusual circumstances, we may approve an exemption to prevent hardship to an equipment manufacturer or a secondary engine manufacturer.  This section does not apply to products that are subject to equipment-based exhaust emission standards.
(a)  Equipment exemption.  As an equipment manufacturer, you may ask for approval to produce exempted equipment for up to 12 months.  We will generally limit this to a single interval up to 12 months in the first year that new or revised emission standards apply.  Exemptions under this section are not limited to small businesses.  Send the Designated Compliance Officer a written request for an exemption before you are in violation.  In your request, you must show you are not at fault for the impending violation and that you would face serious economic hardship if we do not grant the exemption.  This exemption is not available under this paragraph (a) if you manufacture the engine or fuel-system components you need for your own equipment, or if complying engines or fuel-system components are available from other manufacturers that could be used in your equipment, unless we allow it elsewhere in this chapter.  We may impose other conditions, including provisions to use products meeting less stringent emission standards or to recover the lost environmental benefit.  In determining whether to grant the exemptions, we will consider all relevant factors, including the following:
   (1) The number of engines or fuel-system components involved.
   (2) The size of your company and your ability to endure the hardship.
   (3) The amount of time you had to redesign your equipment to accommodate complying products.
   (4) Whether there was any breach of contract by a supplier.
   (5) The potential for market disruption.
(b) Engine and fuel-system component exemption. As an engine manufacturer or fuel-system component manufacturer, you may produce nonconforming products for the equipment we exempt in paragraph (a) of this section.  You do not have to request this exemption but you must have written assurance from equipment manufacturers that they need a certain number of exempted products under this section.  Label engines or fuel-system components as follows, consistent with §1068.45:
   (1) Engines. Add a permanent label to all engines/equipment exempted under this section with at least the following items: 
      (i) The label heading "EMISSION CONTROL INFORMATION".
      (ii) Your corporate name and trademark.
      (iii) Engine displacement (in liters or cubic centimeters) and model year of the engine, or whom to contact for further information.  We may also require that you include maximum engine power. 
      (iv) If the engine does not meet any emission standards: "THIS ENGINE IS EXEMPT UNDER 40 CFR 1068.255 FROM EMISSION STANDARDS AND RELATED REQUIREMENTS."  If the engine meets alternate emission standards as a condition of an exemption under this section, we may specify a different statement to identify the alternate emission standards.
   (2) Fuel-system components. Add a permanent label to all engines/equipment exempted under this section with at least the following items: 
      (i) Your corporate name and trademark.
      (ii) The statement "EXEMPT UNDER 40 CFR 1068.255".
(c) Secondary engine manufacturers.  As a secondary engine manufacturer, you may ask for approval to produce exempted engines under this section for up to 12 months.  We may require you to certify your engines to compliance levels above the emission standards that apply.  For example, in the case of multiple tiers of emission standards, we may require you to meet the standards from the previous tier.
   (1) The provisions in paragraph (a) of this section that apply to equipment manufacturers requesting an exemption apply equally to you except that you may manufacture the engines.  Before we approve an exemption under this section, we will generally require that you commit to a plan to make up the lost environmental benefit.
      (i) If you produce uncertified engines under this exemption, we will calculate the lost environmental benefit based on our best estimate of uncontrolled emission rates for your engines.
      (ii) If you produce engines under this exemption that are certified to a compliance level less stringent than the emission standards that would otherwise apply, we will calculate the lost environmental benefit based on the compliance level you select for your engines.
   (2) The labeling requirements in paragraph (b) of this section apply to your exempted engines; however, if you certify engines to specific compliance levels, state on the label the compliance levels that apply to each engine. 

§1068.260  General provisions for selling or shipping engines that are not yet in their certified configuration.
Except as specified in paragraph (e) of this section, all new engines in the United States are presumed to be subject to the prohibitions of §1068.101, which generally require that all new engines be in a certified configuration before being sold, offered for sale, or introduced or delivered into commerce in the United States or imported into the United States.  All emission-related components generally need to be installed on an engine for such an engine to be in its certified configuration.  This section specifies clarifications and exemptions related to these requirements for engines.  Except for paragraph (c) of this section, the provisions of this section generally apply for engine-based standards but not for equipment-based standards.
(a) The provisions of this paragraph (a) apply for emission-related components that cannot practically be assembled before shipment because they depend on equipment design parameters.
   (1) You do not need an exemption to ship an engine that does not include installation or assembly of certain emission-related components, if those components are shipped along with the engine. For example, you may generally ship aftertreatment devices along with engines rather than installing them on the engine before shipment. We may require you to describe how you plan to use this provision.  
   (2) You may ask us at the time of certification for an exemption to allow you to ship your engines without emission-related components.  If we allow this, we may specify conditions that we determine are needed to ensure that shipping the engine without such components will not result in the engine being operated outside of its certified configuration.  You must identify unshipped parts by specific part numbers if they cannot be properly characterized by performance specification.  For example, electronic control units, turbochargers, and EGR coolers must generally be identified by part number.  Parts that we believe can be properly characterized by performance specification include air filters, noncatalyzed mufflers, and charge air coolers.  See paragraph (d) of this section for additional provisions that apply in certain circumstances.   
(b) You do not need an exemption to ship engines without specific components if they are not emission-related components identified in Appendix I of this part. For example, you may generally ship engines without the following parts:
   (1) Radiators needed to cool the engine. 
   (2) Exhaust piping between the engine and an aftertreatment device, between two aftertreatment devices, or downstream of the last aftertreatment device.
(c) If you are a certificate holder, partially complete engines shipped between two of your facilities are exempt, subject to the provisions of this paragraph (c), as long as you maintain ownership and control of the engines until they reach their destination. We may also allow this where you do not maintain actual ownership and control of the engines (such as hiring a shipping company to transport the engines) but only if you demonstrate that the engines will be transported only according to your specifications. See §1068.261(b) for the provisions that apply instead of this paragraph (c) for the special case of integrated manufacturers using the delegated-assembly exemption. Notify us of your intent to use this exemption in your application for certification, if applicable.  Your exemption is effective when we grant your certificate. You may alternatively request an exemption in a separate submission; for example, this would be necessary if you will not be the certificate holder for the engines in question. We may require you to take specific steps to ensure that such engines are in a certified configuration before reaching the ultimate purchaser. Note that since this is a temporary exemption, it does not allow you to sell or otherwise distribute to ultimate purchasers an engine in an uncertified configuration. Note also that the exempted engine remains new and subject to emission standards (see definition of "exempted" in §1068.30) until its title is transferred to the ultimate purchaser or it otherwise ceases to be new.
(d) See §1068.261 for delegated-assembly provisions in which certificate-holding manufacturers ship engines that are not yet equipped with certain emission-related components.  See §1068.262 for provisions related to manufacturers shipping partially complete engines for which a secondary engine manufacturer holds the certificate of conformity.
(e) Engines used in hobby vehicles are not presumed to be engines subject to the prohibitions of §1068.101. Hobby vehicles are reduced-scale models of vehicles that are not capable of transporting a person.  Some gas turbine engines are subject to the prohibitions of §1068.101, but we do not presume that all gas turbine engines are subject to these prohibitions.  Other engines that do not have a valid certificate of conformity or exemption when sold, offered for sale, or introduced or delivered into commerce in the United States or imported into the United States are presumed to be engines subject to the prohibitions of §1068.101 unless we determine that such engines are excluded from the prohibitions of §1068.101.
(f) While we presume that new non-hobby engines are subject to the prohibitions of §1068.101, we may determine that a specific engine is not subject to these prohibitions based on information you provide or other information that is available to us.  For example, the provisions of this part 1068 and the standard-setting parts provide for exemptions in certain circumstances.  Also, some engines may be subject to separate prohibitions under subchapter C instead of the prohibitions of §1068.101.

§1068.261   Delegated assembly and other provisions related to engines not yet in the certified configuration.
This section describes an exemption that allows certificate holders to sell or ship engines that are missing certain emission-related components if those components will be installed by an equipment manufacturer.  This section does not apply to equipment subject to equipment-based standards.  See the standard-setting part to determine whether and how the provisions of this section apply.  (Note: See §1068.262 for provisions related to manufacturers introducing into U.S. commerce partially complete engines for which someone else holds the certificate of conformity.)  This exemption is temporary as described in paragraph (f) of this section.
(a) Shipping an engine separately from an aftertreatment component that you have specified as part of its certified configuration will not be a violation of the prohibitions in §1068.101(a)(1) subject to the provisions in this section.  
(b) If you manufacture engines and install them in equipment you also produce, you must take steps to ensure that your facilities, procedures, and production records are set up to ensure that equipment and engines are assembled in their proper certified configurations.  For example, you may demonstrate compliance with the requirements of this section by maintaining a database showing how you pair aftertreatment components with the appropriate engines such that the final product is in its certified configuration.
(c) If you include the price of all aftertreatment components in the price of the engine and ship the aftertreatment components directly to the equipment manufacturer, or arrange for separate shipment by the component manufacturer to the equipment manufacturer, all the following conditions apply:
   (1) Apply for and receive a certificate of conformity for the engine and its emission control system before shipment as described in the standard-setting part.  For an existing certificate of conformity, amend the application for certification by describing your plans to use the provisions of this section as described in paragraph (c)(8) of this section.
   (2) Provide installation instructions in enough detail to ensure that the engine will be in its certified configuration if someone follows these instructions.  Provide the installation instructions in a timely manner, generally directly after you receive an order for shipping engines or earlier.  If you apply removable labels as described in paragraph (c)(7)(i) of this section, include an instruction for the equipment manufacturer to remove the label after installing the appropriate aftertreatment component.
   (3) Have a contractual agreement with the equipment manufacturer obligating the equipment manufacturer to complete the final assembly of the engine so it is in its certified configuration when final assembly is complete.  This agreement must also obligate the equipment manufacturer to provide the affidavits required under paragraph (c)(4) of this section.
   (4) Take appropriate additional steps to ensure that all engines will be in a certified configuration when installed by the equipment manufacturer.  At a minimum, you must obtain annual affidavits from every equipment manufacturer to which you sell engines under this section. Include engines that you sell to distributors or dealers.  The affidavits must list the part numbers of the aftertreatment devices that equipment manufacturers install on each engine they purchase from you under this section and include confirmation that the number of aftertreatment devices received were sufficient for the number of engines involved. 
   (5) [Reserved]
   (6) Keep records to document how many engines you produce under this exemption.  Also, keep records to document your contractual agreements under paragraph (c)(3) of this section. Keep all these records for five years after the end of the applicable model year and make them available to us upon request.
   (7) Make sure the engine has the emission control information label we require under the standard-setting part.  Include additional labeling using one of the following approaches:
      (i) Apply an additional removable label in a way that makes it unlikely that the engine will be installed in equipment other than in its certified configuration. The label must identify the engine as incomplete and include a clear statement that failing to install the aftertreatment device, or otherwise failing to bring the engine into its certified configuration, is a violation of federal law subject to civil penalty.
      (ii) Add the statement "DELEGATED ASSEMBLY" to the permanent emission control information label.  You may alternatively add the abbreviated statement "DEL ASSY" if there is not enough room on the label.
   (8) Describe the following things in your application for certification:
      (i) How you plan to use the provisions of this section.
      (ii) A detailed plan for auditing equipment manufacturers, as described in paragraph (d)(3) of this section, if applicable.
      (iii) All other steps you plan to take under paragraph (c)(4) of this section.
   (9) If one of your engines produced under this section is selected for production-line testing or a selective enforcement audit, you must arrange to get a randomly selected aftertreatment component from either the equipment manufacturer or the equipment manufacturer's supplier.  You may keep an inventory of these randomly selected parts, consistent with good engineering judgment and the intent of this section.  You may obtain such aftertreatment components from any point in the normal distribution from the aftertreatment component manufacturer to the equipment manufacturer.  Keep records describing how you randomly selected these aftertreatment components, consistent with the requirements specified in the standard-setting part.
   (10) Note that for purposes of importation, you may itemize your invoice to identify separate costs for engines and aftertreatment components that will be shipped separately.  A copy of your invoice from the aftertreatment manufacturer may be needed to avoid payment of importation duties for the engine that also include the value of aftertreatment components.
(d) If you do not include the price of all aftertreatment components in the price of the engine, you must meet all the conditions described in paragraphs (c)(1) through (9) of this section, with the following additional provisions:
   (1) The contractual agreement described in paragraph (c)(3) of this section must include a commitment that the equipment manufacturer will do the following things:
      (i) Purchase the aftertreatment components you have specified in your application for certification and keep records to document these purchases.
      (ii) Cooperate with the audits described in paragraph (d)(3) of this section.
   (2) You must have written confirmation that the equipment manufacturer has ordered the appropriate type of aftertreatment components for an initial shipment of engines under this section.  For the purpose of this paragraph (d)(2), initial shipment means the first shipment of engines that are subject to new or more stringent emissions standard (or the first shipment of engines using the provisions of this section) to a given equipment manufacturer for a given engine family.  For the purpose of this paragraph (d)(2), you may treat as a single engine family those engine families from different model years that differ only with respect to model year or other characteristics unrelated to emissions.  You must receive the written confirmation within 30 days after shipment.  If you do not receive written confirmation within 30 days, you may not ship any more engines from that engine family to that equipment manufacturer until you have the written confirmation.  Note that it may be appropriate to obtain subsequent written confirmations to ensure compliance with this section, as described in paragraph (c)(4) of this section.
   (3) You must perform or arrange for audits of equipment manufacturers as follows:
      (i) If you sell engines to 16 or more equipment manufacturers under the provisions of this section, you must annually perform or arrange for audits of four equipment manufacturers to whom you sell engines under this section. To select individual equipment manufacturers, divide all the affected equipment manufacturers into quartiles based on the number of engines they buy from you; select a single equipment manufacturer from each quartile each model year.  Vary the equipment manufacturers selected for auditing from year to year, though you may repeat an audit in a later model year if you find or suspect that a particular equipment manufacturer is not properly installing aftertreatment devices.
      (ii) If you sell engines to fewer than 16 equipment manufacturers under the provisions of this section, set up a plan to perform or arrange for audits of each equipment manufacturer on average once every four model years.
      (iii) Starting with the 2019 model year, if you sell engines to fewer than 40 equipment manufacturers under the provisions of this section, you may ask us to approve a reduced auditing rate. We may approve an alternate plan that involves audits of each equipment manufacturer on average once every ten model years as long as you show that you have met the auditing requirements in preceding years without finding noncompliance or improper procedures.
      (iv) To meet these audit requirements, you or your agent must at a minimum inspect the assembling companies' procedures and production records to monitor their compliance with your instructions, investigate some assembled engines, and confirm that the number of aftertreatment devices shipped were sufficient for the number of engines produced.
      (v) You must keep records of these audits for five years after the end of the applicable model year. 
(e) The following provisions apply if you ship engines without air filters or other portions of the air intake system that are specifically identified by part number (or other specific part reference) in the application for certification such that the shipped engine is not in its certified configuration.  You do not need an exemption under this section to ship engines without air intake system components if you instead describe in your installation instructions how equipment manufacturers should use components meeting certain functional specifications.
   (1) If you are using the provisions of this section to ship an engine without aftertreatment, apply all the provisions of this section to ensure that each engine, including its intake system, is in its certified configuration before it reaches the ultimate purchaser. 
   (2) If you are not using the provisions of this section to ship an engine without aftertreatment, shipping an engine without air-intake components that you have specified as part of its certified configuration will not be a violation of the prohibitions in §1068.101(a) if you follow the provisions specified in paragraph (b) or paragraphs (c)(1) through (9) of this section.  If we find there is a problem, we may require you to perform audits as specified in paragraph (d)(3) of this section.
(f) Once the equipment manufacturer takes possession of an engine exempted under this section and the engine reaches the point of final equipment assembly, the exemption expires and the engine is subject to all the prohibitions in §1068.101.  Note that the engine's model year does not change based on the date the equipment manufacturer adds the aftertreatment device and/or air filter under this section. 
(g) You may use the provisions of this section for engines you sell to a distributor as described in this paragraph (g) using one of the following approaches:
   (1) You may sell engines through a distributor if you comply with the provisions of paragraph (d) of this section with respect to the equipment manufacturer.
   (2) You may treat the distributor as the equipment manufacturer as described in this paragraph (g)(2) for all applicable requirements and prohibitions.  Such distributors must bring engines into their final certified configuration.  This may include shipping the engine with the appropriate aftertreatment device and/or air filter, but without completing the assembly with all the components.  The exemptions expire for such engines when the distributor no longer has control of them.  
(h) You must notify us within 15 days if you find from an audit or another source that engines produced under this section are not in a certified configuration at the point of final assembly or that an equipment manufacturer has otherwise failed to meet its obligations under this section.  If this occurs, send us a report describing the circumstances related to the noncompliance within 75 days after you notify us.
(i) We may suspend, revoke, or void an exemption under this section, as follows:
   (1) We may suspend or revoke your exemption for a specific equipment manufacturer if any of the engines are not in a certified configuration after installation in that manufacturer's equipment, or if we determine that the equipment manufacturer has otherwise failed to comply with the requirements of this section.  We may also suspend or revoke your exemption for other engine families with respect to the equipment manufacturer unless you demonstrate that the noncompliance is limited to a specific engine family.  You may not use this exemption for future shipments to the affected equipment manufacturer without taking action beyond the minimum steps specified in this section, such as performing on-site audits.  We will approve further use of this exemption only if you convince us that you have adequately addressed the factors causing the noncompliance.
   (2) We may suspend or revoke your exemption for the entire engine family if we determine that you have failed to comply with the requirements of this section.  If we make an adverse decision with respect to the exemption for any of your engine families under this paragraph (i), this exemption will not apply for future certificates unless you convince us that the factors causing the noncompliance do not apply to the other engine families.  We may also set additional conditions beyond the provisions specified in this section.
   (3) We may void your exemption for the entire engine family if you intentionally submit false or incomplete information or fail to keep and provide to EPA the records required by this section.  Note that all records and reports required under this section (whether generated by the engine manufacturer, equipment manufacturer, or others) are subject to the prohibition in §1068.101(a)(2), which prohibits the submission of false or incomplete information.  For example, the affidavits required by this section are considered a submission.
(j) You are liable for the in-use compliance of any engine that is exempt under this section.
(k) It is a violation of §1068.101(a)(1) for any person to introduce into U.S. commerce a previously exempted engine, including as part of a piece of equipment, without complying fully with the installation instructions. 

§1068.262  Shipment of engines to secondary engine manufacturers.
This section specifies how manufacturers may introduce into U.S. commerce partially complete engines that have an exemption or a certificate of conformity held by a secondary engine manufacturer and are not yet in a certified configuration.  See the standard-setting part to determine whether and how the provisions of this section apply. (Note: See §1068.261 for provisions related to manufacturers introducing into U.S. commerce partially complete engines for which they hold the certificate of conformity.)   This exemption is temporary as described in paragraph (g) of this section.
(a) The provisions of this section apply where the secondary engine manufacturer has substantial control over the design and assembly of emission controls.  In determining whether a manufacturer has substantial control over the design and assembly of emission controls, we would consider the degree to which the secondary engine manufacturer would be able to ensure that the engine will conform to the regulations in its final configuration.  Such secondary engine manufacturers may finish assembly of partially complete engines in the following cases:
   (1) You obtain an engine that is not fully assembled with the intent to manufacture a complete engine.
   (2) You obtain an engine with the intent to modify it before it reaches the ultimate purchaser.  
   (3) You obtain an engine with the intent to install it in equipment that will be subject to equipment-based standards.
(b) Manufacturers may introduce into U.S. commerce partially complete engines as described in this section if they have a written request for such engines from a secondary engine manufacturer that has certified the engine and will finish the engine assembly.  The written request must include a statement that the secondary engine manufacturer has a certificate of conformity for the engine and identify a valid engine family name associated with each engine model ordered (or the basis for an exemption if applicable, as specified in paragraph (e) of this section).  The original engine manufacturer must apply a removable label meeting the requirements of §1068.45 that identifies the corporate name of the original manufacturer and states that the engine is exempt under the provisions of §1068.262.  The name of the certifying manufacturer must also be on the label or, alternatively, on the bill of lading that accompanies the engines during shipment.  The original engine manufacturer may not apply a permanent emission control information label identifying the engine's eventual status as a certified engine.
(c) If you are the secondary engine manufacturer and you will hold the certificate, you must include the following information in your application for certification:
   (1) Identify the original engine manufacturer of the partially complete engine or of the complete engine you will modify.
   (2) Describe briefly how and where final assembly will be completed.  Specify how you have the ability to ensure that the engines will conform to the regulations in their final configuration.  (Note: Paragraph (a) of this section prohibits using the provisions of this section unless you have substantial control over the design and assembly of emission controls.)
   (3) State unconditionally that you will not distribute the engines without conforming to all applicable regulations.
(d) If you are a secondary engine manufacturer and you are already a certificate holder for other families, you may receive shipment of partially complete engines after you apply for a certificate of conformity but before the certificate's effective date.  In this case, all the provisions of §1068.103(c)(1) through (3) apply.  This exemption allows the original manufacturer to ship engines after you have applied for a certificate of conformity.  Manufacturers may introduce into U.S. commerce partially complete engines as described in this paragraph (d) if they have a written request for such engines from a secondary engine manufacturer stating that the application for certification has been submitted (instead of the information we specify in paragraph (b) of this section).  We may set additional conditions under this paragraph (d) to prevent circumvention of regulatory requirements.  Consistent with §1068.103(c), we may also revoke an exemption under this paragraph (d) if we have reason to believe that the application for certification will not be approved or that the engines will otherwise not reach a certified configuration before reaching the ultimate purchaser. This may require that you export the engines.
(e) The provisions of this section also apply for shipping partially complete engines if the engine is covered by a valid exemption and there is no valid engine family name that could be used to represent the engine model.  Unless we approve otherwise in advance, you may do this only when shipping engines to secondary engine manufacturers that are certificate holders.  In this case, the secondary engine manufacturer must identify the regulatory cite identifying the applicable exemption instead of a valid engine family name when ordering engines from the original engine manufacturer.
(f) If secondary engine manufacturers determine after receiving an engine under this section that the engine will not be covered by a certificate or exemption as planned, they may ask us to allow for shipment of the engines back to the original engine manufacturer or to another secondary engine manufacturer.  This might occur in the case of an incorrect shipment or excess inventory.  We may modify the provisions of this section as appropriate to address these cases.
(g) Both original and secondary engine manufacturers must keep the records described in this section for at least five years, including the written request for engines and the bill of lading for each shipment (if applicable).  The written request is deemed to be a submission to EPA and is thus subject to the reporting requirements of 40 CFR 1068.101(a)(2).
(h) These provisions are intended only to allow secondary engine manufacturers to obtain or transport engines in the specific circumstances identified in this section so any exemption under this section expires when the engine reaches the point of final assembly identified in paragraph (c)(2) of this section.
(i) For purposes of this section, an allowance to introduce partially complete engines into U.S. commerce includes a conditional allowance to sell, introduce, or deliver such engines into commerce in the United States or import them into the United States.  It does not include a general allowance to offer such partially complete engines for sale because this exemption is intended to apply only for cases in which the certificate holder already has an arrangement to purchase the engines from the original engine manufacturer.  This exemption does not allow the original engine manufacturer to subsequently offer the engines for sale to a different manufacturer who will hold the certificate unless that second manufacturer has also complied with the requirements of this part.  The exemption does not apply for any individual engines that are not labeled as specified in this section or which are shipped to someone who is not a certificate holder.
(j) We may suspend, revoke, or void an exemption under this section, as follows:
   (1) We may suspend or revoke your exemption if you fail to meet the requirements of this section.  We may suspend or revoke an exemption related to a specific secondary engine manufacturer if that manufacturer sells engines that are in not in a certified configuration in violation of the regulations.  We may disallow this exemption for future shipments to the affected secondary engine manufacturer or set additional conditions to ensure that engines will be assembled in the certified configuration. 
   (2) We may void an exemption for all the affected engines if you intentionally submit false or incomplete information or fail to keep and provide to EPA the records required by this section.
   (3) The exemption is void for an engine that is shipped to a company that is not a certificate holder or for an engine that is shipped to a secondary engine manufacturer that is not in compliance with the requirements of this section.
   (4) The secondary engine manufacturer may be liable for causing a prohibited act if voiding the exemption is due to its own actions.
(k) No exemption is needed to import equipment that does not include an engine.  No exemption is available under this section for equipment subject to equipment-based standards if the engine has been installed.

§1068.265  Provisions for engines/equipment conditionally exempted from certification.
In some cases, exempted engines may need to meet alternate emission standards as a condition of the exemption.  For example, replacement engines exempted under §1068.240 in many cases need to meet the same standards as the engines they are replacing.  The standard-setting part may similarly exempt engines/equipment from all certification requirements, or allow us to exempt engines/equipment from all certification requirements for certain cases, but require the engines/equipment to meet alternate standards.  In these cases, all the following provisions apply:
(a) Your engines/equipment must meet the alternate standards we specify in (or pursuant to) the exemption section, and all other requirements applicable to engines/equipment that are subject to such standards.
(b) You need not apply for and receive a certificate for the exempt engines/equipment.  However, you must comply with all the requirements and obligations that would apply to the engines/equipment if you had received a certificate of conformity for them unless we specifically waive certain requirements.
(c) You must have emission data from test engines/equipment using the appropriate procedures that demonstrate compliance with the alternate standards unless the engines/equipment are identical in all material respects to engines/equipment that you have previously certified to standards that are the same as, or more stringent than, the alternate standards.  Note that "engines/equipment that you have previously certified" does not include any engines/equipment initially covered by a certificate that was later voided or otherwise invalidated, or engines/equipment that we have determined did not fully conform to the regulations. 
(d) See the provisions of the applicable exemption for labeling instructions, including those related to the compliance statement and other modifications to the label otherwise required in the standard-setting part.  If we do not identify specific labeling requirements for an exempted engine, you must meet the labeling requirements in the standard-setting part, with the following exceptions:
   (1) Modify the family designation by eliminating the character that identifies the model year.
   (2) We may also specify alternative language to replace the compliance statement otherwise required in the standard-setting part.
(e) You may not generate emission credits for averaging, banking, or trading with engines/equipment meeting requirements under the provisions of this section.
(f) Keep records to show that you meet the alternate standards as follows:
   (1) If your exempted engines/equipment are identical to previously certified engines/equipment, keep your most recent application for certification for the certified family.
   (2) If you previously certified a similar family, but have modified the exempted engines/equipment in a way that changes them from their previously certified configuration, keep your most recent application for certification for the certified family, a description of the relevant changes, and any test data or engineering evaluations that support your conclusions.
   (3) If you have not previously certified a similar family, keep all the records we specify for the application for certification and any additional records the standard-setting part requires you to keep.
(g) We may require you to send us an annual report of the engines/equipment you produce under this section.
Subpart D -- Imports


§1068.301  General provisions for importing engines/equipment.
(a) This subpart applies to you if you import into the United States engines or equipment subject to EPA emission standards or equipment containing engines subject to EPA emission standards.  
(b) In general, engines/equipment that you import must be covered by a certificate of conformity unless they were built before emission standards started to apply.  This subpart describes the limited cases where we allow importation of exempt or excluded engines/equipment.  If an engine has an exemption from exhaust emission standards, this allows you to import the equipment under the same exemption.
(c) U.S. Customs and Border Protection may prevent you from importing engines or equipment if you do not meet the requirements of this subpart.  In addition, U.S. Customs and Border Protection regulations may contain other requirements for engines/equipment imported into the United States (see 19 CFR Chapter I).
(d) Complete the appropriate EPA declaration form before importing any engines or equipment.  These forms are available on the Internet at http://www.epa.gov/otaq/importshttp://www.epa.gov/OTAQ/imports/ or by phone at 734-214-4100.  Importers must keep the forms for five years and make them available promptly upon request.
(e) The standard-setting part may defines uncertified engines/equipment to be "new" upon importation, whether or not they have already been placed into service.  This may affect how the provisions of this subpart apply for your engines/equipment.  (See the definition of "new" and other relevant terms in the standard-setting part.)

§1068.305  How do I get an exemption or exclusion for imported engines/equipment?
(a) You must meet the requirements of the specific exemption or exclusion you intend to use, including any labeling requirements that apply, and complete the appropriate declaration form described in §1068.301(d).
(b) If we ask for it, prepare a written request in which you do the following:
   (1) Give your name, address, and telephone number.
   (2) Give the engine/equipment owner's name, address, and telephone number.
   (3) Identify the make, model, identification number, and original production year of all engines/equipment.
   (4) Identify which exemption or exclusion in this subpart allows you to import nonconforming engines/equipment and describe how your engine/equipment qualifies.
   (5) Tell us where you will keep your engines/equipment if you might need to store them until we approve your request. 
   (6) Authorize us to inspect or test your engines/equipment as the Clean Air Act allows.
(c) We may ask for more information.
(d) You may import the nonconforming engines/equipment you identify in your request if you get prior written approval from us.  U.S. Customs and Border Protection may require you to present the approval letter.  We may temporarily or permanently approve the exemptions or exclusions, as described in this subpart.  

§1068.310  Exclusions for imported engines/equipment.
If you show us that your engines/equipment qualify under one of the paragraphs of this section, we will approve your request to import such excluded engines/equipment.  You must have our approval before importing engines/equipment under paragraph (a) of this section.  You may, but are not required to request our approval to import the engines/equipment under paragraph (b) through (c) of this section.  The following engines/equipment are excluded:
(a) Engines/equipment used solely for competition.  Engines/equipment that you demonstrate will be used solely for competition are excluded from the restrictions on imports in §1068.301(b), but only if they are properly labeled.  See the standard-setting part for provisions related to this demonstration that may apply.  Section 1068.101(b)(4) prohibits anyone from using these excluded engines/equipment for purposes other than competition.  We may waive the labeling requirement or allow a removable label for engines/equipment that are being temporarily imported for one or more specific competition events.
(b) Stationary engines. The definition of nonroad engine in §1068.30 does not include certain engines used in stationary applications.  Such engines (and equipment containing such engines) may be subject to the standards of 40 CFR part 60.  Engines that are excluded from the definition of nonroad engine in this part and are not required to be certified to standards under 40 CFR part 60 are not subject to the restrictions on imports in §1068.301(b), but only if they are properly labeled and there is clear and convincing evidence that each engine will be used in a stationary application (see paragraph (2)(iii) of the definition of "Nonroad engine").  Section 1068.101 restricts the use of stationary engines for non-stationary purposes unless they are certified under 40 CFR part 60 to the same standards that would apply to nonroad engines for the same model year.
(c) Hobby engines.  The standard-setting parts exclude engines used in reduced-scale models of vehicles that are not capable of transporting a person.
(d) Other engines/equipment.  The standard-setting parts may exclude engines/equipment used in certain applications.  For example, engines used in aircraft are generally excluded.  Engines/equipment used in underground mining are excluded if they are regulated by the Mine Safety and Health Administration.
(e) Labeling.  For engines/equipment imported under paragraph (a) or (b) of this section, you must add a permanent label, consistent with §1068.45, with at least the following items unless the standard-setting part includes other specific labeling requirements or we approve alternate label language that is more accurate for your engine/equipment: 
   (1) Include the heading "EMISSION CONTROL INFORMATION".
   (2) Include your full corporate name and trademark.
   (3) State the engine displacement (in liters or cubic centimeters).  We may also require that you include maximum engine power.   If the engine's power is not established, state the approximate power.
   (4) State: "THIS ENGINE IS EXEMPT FROM THE REQUIREMENTS OF [identify the part referenced in §1068.1(a) that would otherwise apply], AS PROVIDED IN [identify the paragraph authorizing the exemption (for example, "40 CFR 1068.315(a)")].  INSTALLING THIS ENGINE IN ANY DIFFERENT APPLICATION MAY BE A VIOLATION OF FEDERAL LAW SUBJECT TO CIVIL PENALTY."

§1068.315  Permanent exemptions for imported engines/equipment.
We may approve a permanent exemption from the restrictions on imports under §1068.301(b) under the following conditions:
(a) National security exemption. You may import an engine or piece of equipment under the national security exemption in §1068.225, but only if it is properly labeled.
(b) Manufacturer-owned engine/equipment exemption. You may import manufacturer-owned engines/equipment, as described in §1068.215.
(c) Replacement engine exemption.  You may import a nonconforming replacement engine as described in §1068.240.  To use this exemption, you must be a certificate holder for a family we regulate under the same part as the replacement engine.
(d) Extraordinary circumstances exemption. You may import a nonconforming engine or piece of equipment if we grant hardship relief as described in §1068.245.
(e) Small-volume manufacturer exemption. You may import a nonconforming engine or piece of equipment if we grant hardship relief for a small-volume manufacturer, as described in §1068.250.
(f) Equipment-manufacturer hardship exemption. You may import a nonconforming engine if we grant an exemption for the transition to new or revised emission standards, as described in §1068.255.
(g) [Reserved]
(h) Identical configuration exemption.  Unless specified otherwise in the standard-setting part, you may import nonconforming engines/equipment if they are identical to certified engines/equipment produced by the same manufacturer, subject to the following provisions: 
   (1) You must meet all the following criteria:
      (i) You have owned the engines/equipment for at least six months.
      (ii)  You agree not to sell, lease, donate, trade, or otherwise transfer ownership of the engines/equipment for at least five years.  During this period, the only acceptable way to dispose of the engines/equipment is to destroy or export them.
      (iii) You use data or evidence sufficient to show that the engines/equipment are in a configuration that is identical to engines/equipment the original manufacturer has certified to meet emission standards that apply at the time the manufacturer finished assembling or modifying the engines/equipment in question.  If you modify the engines/equipment to make them identical, you must completely follow the original manufacturer's written instructions.
   (2)  We will tell you in writing if we find the information insufficient to show that the engines/equipment are eligible for this exemption.  In this case, we will not consider your request further until you address our concerns.
(i) Ancient engine/equipment exemption.  If you are not the original engine/equipment manufacturer, you may import nonconforming engines/equipment that are subject to a standard-setting part and were first manufactured at least 21 years earlier, as long as they are still substantially in their original configurations.

§1068.325  Temporary exemptions for imported engines/equipment.
You may import engines/equipment under certain temporary exemptions, subject to the conditions in this section.  We may ask U.S. Customs and Border Protection to require a specific bond amount to make sure you comply with the requirements of this subpart.  You may not sell or lease one of these engines/equipment while it is in the United States except as specified in this section or §1068.201(i).  You must eventually export the engine/equipment as we describe in this section unless it conforms to a certificate of conformity or it qualifies for one of the permanent exemptions in §1068.315 or the standard-setting part. 
(a) Exemption for repairs or alterations.   You may temporarily import nonconforming engines/equipment under bond solely for repair or alteration, subject to our advance approval as described in paragraph (j) of this section.  You may operate the engine/equipment in the United States only as necessary to repair it, alter it, or ship it to or from the service location.  Export the engine/equipment directly after servicing is complete, or confirm that it has been destroyed.
(b) Testing exemption.   You may temporarily import nonconforming engines/equipment under bond for testing if you follow the requirements of §1068.210, subject to our advance approval as described in paragraph (j) of this section.  You may operate the engines/equipment in the United States only as needed to perform tests.  This exemption expires one year after you import the engine/equipment unless we approve an extension.  The engine/equipment must be exported before the exemption expires.  You may sell or lease the engines/equipment consistent with the provisions of §1068.210.
(c) Display exemption.  You may temporarily import nonconforming engines/equipment under bond for display if you follow the requirements of §1068.220, subject to our advance approval as described in paragraph (j) of this section.  This exemption expires one year after you import the engine/equipment, unless we approve your request for an extension.  The engine/equipment must be exported (or destroyed) by the time the exemption expires or directly after the display concludes, whichever comes first. 
(d) Export exemption.  You may temporarily import nonconforming engines/equipment to export them, as described in §1068.230.  Label the engine/equipment as described in §1068.230.  You may sell or lease the engines/equipment for operation outside the United States consistent with the provisions of §1068.230.
(e) Diplomatic or military exemption.  You may temporarily import nonconforming engines/equipment without bond if you represent a foreign government in a diplomatic or military capacity.  In your request to the Designated Compliance Officer (see §1068.305), include either written confirmation from the U.S. State Department that you qualify for this exemption or a copy of your orders for military duty in the United States.  We will rely on the State Department or your military orders to determine when your diplomatic or military status expires, at which time you must export your exempt engines/equipment.
(f) Delegated-assembly exemption.  You may import a nonconforming engine for final assembly under the provisions of §1068.261.  You may sell or lease the engines/equipment consistent with the provisions of §1068.261.
(g) Exemption for partially complete engines. You may import an engine if another company already has a certificate of conformity and will be modifying the engine to be in its final certified configuration or a final exempt configuration under the provisions of §1068.262.  You may also import a partially complete engine by shipping it from one of your facilities to another under the provisions of §1068.260(c).  If you are importing a used engine that becomes new as a result of importation, you must meet all the requirements that apply to original engine manufacturers under §1068.262.  You may sell or lease the engines consistent with the provisions of §1068.262.
(h) [Reserved]
(i) [Reserved]
(j) Approvals.  For the exemptions in this section requiring our approval, you must send a request to the Designated Compliance Officer before importing the engines/equipment.  We will approve your request if you meet all the applicable requirements and conditions.  If another section separately requires that you request approval for the exemption, you may combine the information requirements in a single request.  Include the following information in your request:
   (1) Identify the importer of the engine/equipment and the applicable postal address, e-mail address, and telephone number.
   (2) Identify the engine/equipment owner and the applicable postal address, e-mail address, and telephone number.
   (3) Identify the engine/equipment by model number (or name), serial number, and original production year.
   (4) Identify the specific regulatory provision under which you are seeking an exemption.
   (5) Acknowledge that EPA enforcement officers may conduct inspections or testing as allowed under the Clean Air Act.
   (6) Include any additional information we specify for demonstrating that you qualify for the exemption. 

§1068.335  Penalties for violations.
(a)  All imported engines/equipment.  Unless you comply with the provisions of this subpart, importation of nonconforming engines/equipment violates sections 203 and 213(d) of the Clean Air Act (42 U.S.C. 7522 and 7547(d)).  You may then have to export the engines/equipment, pay civil penalties, or both.  U.S. Customs and Border Protection may seize unlawfully imported engines and equipment.  
(b) Temporarily imported engines/equipment.  If you do not comply with the provisions of this subpart for a temporary exemption under §1068.325, you may forfeit the total amount of the bond in addition to the sanctions we identify in paragraph (a) of this section.  We will consider an engine or piece of equipment to be exported if it has been destroyed or delivered to U.S. Customs and Border Protection for export or other disposition under applicable Customs laws and regulations.  EPA or U.S. Customs and Border Protection may offer you a grace period to allow you to export temporarily exempted engines/equipment without penalty after the exemption expires.

§1068.360 Restrictions for assigning a model year to imported engines and equipment.
This section includes limitations on assigning a model year to engines and equipment that are imported in a year later than the model year in which they were manufactured, except as specified in paragraph (e) of this section.
(a) The term "model year" is defined in each of the standard-setting parts.  These definitions may vary slightly to address the different categories of engines and equipment.  Except as specified in paragraphs (b) and (c) of this section, the emission standards and other emission-related requirements that apply for an imported engine or piece of equipment are determined by the model year as defined in the applicable standard-setting part and the provisions of 40 CFR 1068.105(a).
(b) This paragraph (b) applies for the importation of engines and  equipment that have not been placed into service, where the importation occurs in any calendar year that is more than one year after the named model year of the engine or equipment when emission control requirements applying to current engines are different than for engines or equipment in the named model year, unless they are imported under special provisions for Independent Commercial Importers as allowed under the standard-setting part.  Regardless of what other provisions of this subchapter U specify for the model year of the engine or equipment, such engines and equipment are deemed to have an applicable model year no more than one year earlier than the calendar year in which they are imported.  For example, a new engine identified as a 2007 model-year product that is imported on January 31, 2010 will be treated as a 2009 model-year engine; the same engine will be treated as a 2010 model-year engine if it is imported any time in calendar year 2011. 
(c) If you claim that an engine or piece of equipment is not subject to standards -- or is subject to standards less stringent than those currently in place -- based on its original manufacture date because it has already been placed into service, you must provide clear and convincing evidence that it has already been placed into service.  Such evidence must generally include, but not be limited to, documentary evidence of purchase and maintenance history and visible wear that is consistent with the reported manufacture date.  Importing products for resale or importing more than one engine or piece of equipment at a time would generally require a greater degree of evidence under this paragraph (c).  If you do not satisfactorily demonstrate that the engine or equipment has already been placed into service, the provisions of paragraph (b) of this section apply.
(d) Nothing in this section should be interpreted to allow circumvention of the requirements of this part by mis-stating or mis-labeling the model year of engines or equipment.  For example, this section does not permit engines imported in the same year that they are manufactured to be treated as an engine manufactured in the previous year.  To verify compliance with the provisions of this section, we may require you to verify the original manufacture date of the engine or equipment based on manufacturing records, title-transfer documents, service records, or other documentation.
(e) If all the current emission control requirements are the same as in the named model year, the provisions of this section do not apply.
Subpart E -- Selective Enforcement Auditing


§1068.401  What is a selective enforcement audit?
(a) We may conduct or require you as a certificate holder to conduct emission tests on production engines/equipment in a selective enforcement audit.  This requirement is independent of any requirement for you to routinely test production-line engines/equipment.  Where there are multiple entities meeting the definition of manufacturer, we may require manufacturers other than the certificate holder to conduct or participate in the audit as necessary.  For products subject to equipment-based standards, but tested using engine-based test procedures, this subpart applies to the engines and/or the equipment, as applicable.  Otherwise this subpart applies to engines for products subject to engine-based standards and to equipment for products subject to equipment-based standards.
(b) If we send you a signed test order, you must follow its directions and the provisions of this subpart.  We may tell you where to test the engines/equipment.  This may be where you produce the engines/equipment or any other emission testing facility.  You are responsible for all testing costs whether the testing is conducted at your facility or another facility.
(c) If we select one or more of your families for a selective enforcement audit, we will send the test order to the person who signed the application for certification or we will deliver it in person.
(d) If we do not select a testing facility, notify the Designated Compliance Officer within one working day of receiving the test order where you will test your engines/equipment.
--------------------------------------------------------------------------------
(e) You must do everything we require in the audit without delay. We may suspend or revoke your certificate of conformity for the affected engine families if you do not fulfill your obligations under this subpart.

§1068.405  What is in a test order?
(a) In the test order, we will specify the following things:
   (1)  The family we have identified for testing. We may also specify individual configurations.
   (2)  The engine/equipment assembly plant, storage facility, or (if you import the engines/equipment) port facility from which you must select engines/equipment.
   (3)  The procedure for selecting engines/equipment for testing, including a selection rate.
   (4)  The test procedures, duty cycles, and test points, as appropriate, for testing the engines/equipment to show that they meet emission standards.
(b) We may state that we will select the test engines/equipment.
(c) We may identify alternate families or configurations for testing in case we determine the intended engines/equipment are not available for testing or if you do not produce enough engines/equipment to meet the minimum rate for selecting test engines/equipment.
(d) We may include other directions or information in the test order.
(e)  We may ask you to show us that you meet any additional requirements that apply to your engines/equipment (closed crankcases, for example).
(f) In anticipation of a potential audit, you may give us a list of your preferred families and the corresponding assembly plants, storage facilities, or (if you import the engines/equipment) port facilities from which we should select engines/equipment for testing.  The information would apply only for a single model year so it would be best to include this information in your application for certification.  If you give us this list before we issue a test order, we will consider your recommendations, but we may select different engines/equipment.
(g) If you also do routine production-line testing with the selected family in the same time period, the test order will tell you what changes you might need to make in your production-line testing schedule.

§1068.410  How must I select and prepare my engines/equipment?
(a)  Selecting engines/equipment.  Select engines/equipment as described in the test order.  If you are unable to select test engines/equipment this way, you may ask us to approve an alternate plan as long as you make the request before you start selecting engines/equipment.
(b)  Assembling engines/equipment.  Produce and assemble test engines/equipment using your normal production and assembly process for that family.  
   (1) Notify us directly if you make any change in your production, assembly, or quality control processes that might affect emissions between the time you receive the test order and the time you finish selecting test engines/equipment. 
   (2) If you do not fully assemble engines/equipment at the specified location, we will describe in the test order how to select components to finish assembling the engines/equipment.  Assemble these components onto the test engines/equipment using your documented assembly and quality control procedures.
(c) Modifying engines/equipment.  Once an engine or piece of equipment is selected for testing, you may adjust, repair, prepare, or modify it or check its emissions only if one of the following is true:
   (1)  You document the need for doing so in your procedures for assembling and inspecting all your production engines/equipment and make the action routine for all the engines/equipment in the family.
   (2)  This subpart otherwise allows your action.
   (3)  We approve your action in advance.
(d)  Engine/equipment malfunction.  If an engine/equipment malfunction prevents further emission testing, ask us to approve your decision to either repair the engine or delete it from the test sequence.
(e)   Setting adjustable parameters.  Before any test, we may adjust or require you to adjust any adjustable parameter to any setting within its physically adjustable range.
   (1) [Reserved]
   (2)  We may make or specify adjustments within the physically adjustable range by considering their effect on emission levels.  We may also consider how likely it is that someone will make such an adjustment with in-use engines/equipment.
(f)   Stabilizing emission levels.  (1) Before you test production-line engines/equipment for exhaust emission, you may operate the engine/equipment to stabilize the exhaust emission levels.  Using good engineering judgment, operate your engines/equipment in a way that represents the way production engines/equipment will be used.  You may operate each engine or piece of equipment for no more than the greater of two periods:
      (i)  50 hours.
      (ii)  The number of hours you operated your emission-data engine/equipment for certifying the family (see 40 CFR part 1065, subpart E).
   (2) Use good engineering judgment and follow the standard-setting part to stabilize equipment for evaporative emissions, where appropriate.
(g)  Damage during shipment.  If shipping the engine/equipment to a remote facility for testing under a selective enforcement audit makes necessary an adjustment or repair, you must wait until after the initial emission test to do this work.  We may waive this requirement if the test would be impossible or unsafe or if it would permanently damage the engine/equipment.  Report to us, in your written report under §1068.450, all adjustments or repairs you make on test engines/equipment before each test.
(h)  Shipping engines/equipment.  If you need to ship engines/equipment to another facility for testing, make sure the test engines/equipment arrive at the test facility within 24 hours after being selected.  You may ask that we allow more time if you are unable to do this.
(i)  Retesting after invalid tests. You may retest an engine or piece of equipment if you determine an emission test is invalid under the standard-setting part.  Explain in your written report reasons for invalidating any test and the emission results from all tests.  If you retest an engine or piece of equipment and, within ten days after testing, ask to substitute results of the new tests for the original ones, we will answer within ten days after we receive your information.
(j) Retesting after reaching a fail decision. You may retest your engines/equipment once a fail decision for the audit has been reached based on the first test on each engine or piece of equipment under §1068.420(c).  You may test each engine or piece of equipment up to a total of three times, but you must perform the same number of tests on each engine or piece of equipment.  You may further operate the engine/equipment to stabilize emission levels before testing, subject to the provisions of paragraph (f) of this section.  We may approve retesting at other times if you send us a request with satisfactory justification.

§1068.415  How do I test my engines/equipment?
(a) Use the test procedures specified in the standard-setting part for showing that your engines/equipment meet emission standards.  The test order will give further testing instructions.
(b) If no test cells are available at a given facility, you may make alternate testing arrangements with our approval.
(c) Test at least two engines/equipment in each 24-hour period (including void tests). However, for engines with maximum engine power above 560 kW, you may test one engine per 24-hour period. If you request and justify it, we may approve a lower testing rate.
(d) For exhaust emissions, accumulate service on test engines/equipment at a minimum rate of 6 hours per engine or piece of equipment during each 24-hour period; however, service accumulation to stabilize an engine's emission levels may not take longer than eight days.  The first 24-hour period for service accumulation begins when you finish preparing an engine or piece of equipment for testing.  The minimum service accumulation rate does not apply on weekends or holidays.  We may approve a longer stabilization period or a lower service accumulation rate if you request and justify it.  We may require you to accumulate hours more rapidly than the minimum rate, as appropriate.  Plan your service accumulation to allow testing at the rate specified in paragraph (c) of this section.  Select operation for accumulating operating hours on your test engines/equipment to represent normal in-use operation for the family.
(e) Test engines/equipment in the same order you select them.

§1068.420  How do I know when my engine family fails an SEA?
(a)  A failed engine or piece of equipment is one whose final deteriorated test results exceed an applicable emission standard for any regulated pollutant.
(b)  Continue testing engines/equipment until you reach a pass decision for all pollutants or a fail decision for one pollutant, as described in paragraph (c) of this section.
(c)  You reach a pass decision for the SEA requirements when the number of failed engines/equipment is less than or equal to the pass decision number in Appendix A to this subpart for the total number of engines/equipment tested.  You reach a fail decision for the SEA requirements when the number of failed engines/equipment is greater than or equal to the fail decision number in Appendix A to this subpart for the total number of engines/equipment you test.  An acceptable quality level of 40 percent is the basis for the pass or fail decision.
(d)  Consider test results in the same order as the engine/equipment testing sequence.   
(e)  If you reach a pass decision for one pollutant, but need to continue testing for another pollutant, we will not use these later test results for the pollutant with the pass decision as part of the SEA.  
(f)  Appendix A to this subpart lists multiple sampling plans.  Use the sampling plan for the projected sales volume you reported in your application for the audited family.
(g)  We may choose to stop testing after any number of tests.
(h)  If we test some of your engines/equipment in addition to your own testing, we may decide not to include your test results as official data for those engines/equipment if there is substantial disagreement between your testing and our testing.  We will reinstate your data as valid if you show us that we made an error and your data are correct.  
(i)  If we rely on our test data instead of yours, we will notify you in writing of our decision and the reasons we believe your facility is not appropriate for doing the tests we require under this subpart. You may request in writing that we consider your test results from the same facility for future testing if you show us that you have made changes to resolve the problem.

§1068.425  What happens if one of my production-line engines/equipment exceeds the emission standards?
(a) If one of your production-line engines/equipment fails to meet one or more emission standards (see §1068.420), the certificate of conformity is automatically suspended for that engine or piece of equipment.  You must take the following actions before your certificate of conformity can cover that engine or piece of equipment:
   (1) Correct the problem and retest the engine/equipment to show it complies with all emission standards.
   (2) Include in your written report a description of the test results and the remedy for each engine or piece of equipment (see §1068.450).
(b) You may ask for a hearing relative to the suspended certificate of conformity for the failing engine/equipment as specified in subpart G of this part. 

§1068.430  What happens if a family fails an SEA?
(a)  We may suspend your certificate of conformity for a family if it fails the SEA under §1068.420.  The suspension may apply to all facilities producing engines/equipment from a family even if you find noncompliant engines/equipment only at one facility. 
(b)  We will tell you in writing if we suspend your certificate in whole or in part.  We will not suspend a certificate until at least 15 days after the family fails the SEA.  The suspension is effective when you receive our notice.
(c)  You may ask for a hearing as described in subpart G of this part up to 15 days after we suspend the certificate for a family.  If we agree that we used erroneous information in deciding to suspend the certificate before a hearing is held, we will reinstate the certificate.

§1068.435  May I sell engines/equipment from a family with a suspended certificate of conformity?
You may sell engines/equipment that you produce after we suspend the family's certificate of conformity only if one of the following occurs: 
(a)  You test each engine or piece of equipment you produce and show it complies with emission standards that apply.
(b)  We conditionally reinstate the certificate for the family.  We may do so if you agree to recall all the affected engines/equipment and remedy any noncompliance at no expense to the owner if later testing shows that engines/equipment in the family still do not comply.

§1068.440  How do I ask EPA to reinstate my suspended certificate?
(a) Send us a written report asking us to reinstate your suspended certificate.  In your report, identify the reason for the SEA failure, propose a remedy, and commit to a date for carrying it out.  In your proposed remedy include any quality control measures you propose to keep the problem from happening again.
(b) Give us test data from production engines/equipment showing that engines/equipment in the remedied family comply with all the emission standards that apply.

§1068.445  When may EPA revoke my certificate under this subpart and how may I sell these engines/equipment again?
(a)  We may revoke your certificate for a family in the following cases:
   (1)  You do not meet the reporting requirements under this subpart.
   (2)  Your family fails an SEA and your proposed remedy to address a suspended certificate is inadequate to solve the problem or requires you to change the engine/equipment's design or emission control system.
(b)  To sell engines/equipment from a family with a revoked certificate of conformity, you must modify the family and then show it complies with the applicable requirements.
   (1)  If we determine your proposed design change may not control emissions for the engine/equipment's full useful life, we will tell you within five working days after receiving your report.  In this case we will decide whether production-line testing will be enough for us to evaluate the change or whether you need to do more testing.
   (2)  Unless we require more testing, you may show compliance by testing production-line engines/equipment as described in this subpart.
   (3)  We will issue a new or updated certificate of conformity when you have met these requirements.

§1068.450  What records must I send to EPA?
(a)  Within 30 days of the end of each audit, send us a report with the following information:
   (1) Describe any facility used to test production-line engines/equipment and state its location.
   (2) State the total U.S.-directed production volume and number of tests for each family.
   (3) Describe your test engines/equipment, including the family's identification and the engine/equipment's model year, build date, model number, identification number, and number of hours of operation before testing for each test engine or piece of equipment.
   (4)  Identify where you accumulated hours of operation on the engines/equipment and describe the procedure and schedule you used.
   (5)  Provide the test number; the date, time and duration of testing; test procedure; initial test results before and after rounding; final test results; and final deteriorated test results for all tests.  Provide the emission figures for all measured pollutants.  Include information for both valid and invalid tests and the reason for any invalidation.
   (6)  Describe completely and justify any nonroutine adjustment, modification, repair, preparation, maintenance, or test for the test engine/equipment if you did not report it separately under this subpart.  Include the results of any emission measurements, regardless of the procedure or type of equipment.
   (7)  Report on each failed engine or piece of equipment as described in §1068.425.
(b)  We may ask you to add information to your written report, so we can determine whether your new engines/equipment conform to the requirements of this subpart.
(c)  An authorized representative of your company must sign the following statement:
   We submit this report under Sections 208 and 213 of the Clean Air Act.  Our testing conformed completely with the requirements of 40 CFR part 1068.  We have not changed production processes or quality-control procedures for the family in a way that might affect the emission control from production engines/equipment.  All the information in this report is true and accurate to the best of my knowledge.  I know of the penalties for violating the Clean Air Act and the regulations.  (Authorized Company Representative)
(d)  Send reports of your testing to the Designated Compliance Officer using an approved information format.  If you want to use a different format, send us a written request with justification for a waiver.
(e) We may post test results on publicly accessible databases and we will send copies of your reports to anyone from the public who asks for them.  We will not release information about your sales or production volumes, which is all we will consider confidential.

§1068.455  What records must I keep?
(a) We may review your records at any time so it is important to keep required information readily available.  Organize and maintain your records as described in this section.
(b)  Keep paper records for testing under this subpart for one full year after you complete all the testing required for the selective enforcement audit.  For additional storage, you may use any format or media.
(c)  Keep a copy of the written reports described in §1068.450.
(d)  Keep the following additional records:
   (1)  The names of supervisors involved in each test.
   (2)  The name of anyone who authorizes adjusting, repairing, preparing, or modifying a test engine/equipment and the names of all supervisors who oversee this work.
   (3)  If you shipped the engine/equipment for testing, the date you shipped it, the associated storage or port facility, and the date the engine/equipment arrived at the testing facility.
   (4)  Any records related to your audit that are not in the written report.
   (5)  A brief description of any significant events during testing not otherwise described in the written report or in this section. 
(e)  If we ask, you must give us projected or actual production for a family.  Include each assembly plant if you produce engines/equipment at more than one plant.  
(f)  We may ask you to keep or send other information necessary to implement this subpart.

Appendix A to Subpart E of Part 1068 -- Plans for Selective Enforcement Auditing

	The following tables describe sampling plans for selective enforcement audits, as described in §1068.420:
Table A-1 -- Sampling Plan Code Letter
                            Projected Family Sales
                                Code letter[1]
                            Minimum Number of Tests
                            Maximum Number of Tests
                                       
                                       
                                    To Pass
                                    To Fail
                                       
                                    20 - 50
                                      AA
                                       3
                                       5
                                      20
                                    20 - 99
                                       A
                                       4
                                       6
                                      30
                                   100 - 299
                                       B
                                       5
                                       6
                                      40
                                   300 - 499
                                       C
                                       5
                                       6
                                      50
                                     500 +
                                       D
                                       5
                                       6
                                      60
[1]  A manufacturer may optionally use either the sampling plan for code letter "AA" or sampling plan for code letter "A" for Selective Enforcement Audits of families with annual sales between 20 and 50 engines/equipment.  Additionally, the manufacturer may switch between these plans during the audit.

Table A-2 -- Sampling Plans for Different Engine Family Sales Volumes
                                       
                                   Stage[a]
                                     [AA]
                                      [A]
                                      [B]
                                      [C]
                                      [D]
                                       
                                   [Pass #]
                                   [Fail #]
                                   [Pass #]
                                   [Fail #]
                                   [Pass #]
                                   [Fail #]
                                   [Pass #]
                                   [Fail #]
                                   [Pass #]
                                   [Fail #]
                                      [1]
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                      [2]
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                      [3]
                                      [0]
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                      [4]
                                      [0]
                                        
                                      [0]
                                        
                                        
                                        
                                        
                                        
                                        
                                        
                                      [5]
                                      [1]
                                      [5]
                                      [0]
                                        
                                      [0]
                                        
                                      [0]
                                        
                                      [0]
                                        
                                      [6]
                                      [1]
                                      [6]
                                      [1]
                                      [6]
                                      [1]
                                      [6]
                                      [0]
                                      [6]
                                      [0]
                                      [6]
                                      [7]
                                      [2]
                                      [6]
                                      [1]
                                      [7]
                                      [1]
                                      [7]
                                      [1]
                                      [7]
                                      [1]
                                      [7]
                                      [8]
                                      [2]
                                      [7]
                                      [2]
                                      [7]
                                      [2]
                                      [7]
                                      [2]
                                      [7]
                                      [2]
                                      [8]
                                      [9]
                                      [3]
                                      [7]
                                      [2]
                                      [8]
                                      [2]
                                      [8]
                                      [2]
                                      [8]
                                      [2]
                                      [8]
                                     [10]
                                      [3]
                                      [8]
                                      [3]
                                      [8]
                                      [3]
                                      [8]
                                      [3]
                                      [9]
                                      [3]
                                      [9]
                                     [11]
                                      [4]
                                      [8]
                                      [3]
                                      [8]
                                      [3]
                                      [9]
                                      [3]
                                      [9]
                                      [3]
                                      [9]
                                     [12]
                                      [4]
                                      [9]
                                      [4]
                                      [9]
                                      [4]
                                      [9]
                                      [4]
                                     [10]
                                      [4]
                                     [10]
                                     [13]
                                      [5]
                                      [9]
                                      [5]
                                     [10]
                                      [4]
                                     [10]
                                      [4]
                                     [10]
                                      [4]
                                     [10]
                                     [14]
                                      [5]
                                     [10]
                                      [5]
                                     [10]
                                      [5]
                                     [10]
                                      [5]
                                     [11]
                                      [5]
                                     [11]
                                     [15]
                                      [6]
                                     [10]
                                      [6]
                                     [11]
                                      [5]
                                     [11]
                                      [5]
                                     [11]
                                      [5]
                                     [11]
                                     [16]
                                      [6]
                                     [10]
                                      [6]
                                     [11]
                                      [6]
                                     [12]
                                      [6]
                                     [12]
                                      [6]
                                     [12]
                                     [17]
                                      [7]
                                     [10]
                                      [7]
                                     [12]
                                      [6]
                                     [12]
                                      [6]
                                     [12]
                                      [6]
                                     [12]
                                     [18]
                                      [8]
                                     [10]
                                      [7]
                                     [12]
                                      [7]
                                     [13]
                                      [7]
                                     [13]
                                      [7]
                                     [13]
                                      19
                                      [8]
                                     [10]
                                      [8]
                                     [13]
                                      [8]
                                     [13]
                                      [7]
                                     [13]
                                      [7]
                                     [13]
                                     [20]
                                      [9]
                                     [10]
                                      [8]
                                     [13]
                                      [8]
                                     [14]
                                      [8]
                                     [14]
                                      [8]
                                     [14]
                                     [21]
                                       
                                       
                                      [9]
                                     [14]
                                      [9]
                                     [14]
                                      [8]
                                     [14]
                                      [8]
                                     [14]
                                     [22]
                                       
                                       
                                     [10]
                                     [14]
                                      [9]
                                     [15]
                                      [9]
                                     [15]
                                      [9]
                                     [15]
                                     [23]
                                       
                                       
                                     [10]
                                     [15]
                                     [10]
                                     [15]
                                     [10]
                                     [15]
                                      [9]
                                     [15]
                                     [24]
                                       
                                       
                                     [11]
                                     [15]
                                     [10]
                                     [16]
                                     [10]
                                     [16]
                                     [10]
                                     [16]
                                     [25]
                                       
                                       
                                     [11]
                                     [16]
                                     [11]
                                     [16]
                                     [11]
                                     [16]
                                     [11]
                                     [16]
                                     [26]
                                       
                                       
                                     [12]
                                     [16]
                                     [11]
                                     [17]
                                     [11]
                                     [17]
                                     [11]
                                     [17]
                                     [27]
                                       
                                       
                                     [12]
                                     [17]
                                     [12]
                                     [17]
                                     [12]
                                     [17]
                                     [12]
                                     [17]
                                     [28]
                                       
                                       
                                     [13]
                                     [17]
                                     [12]
                                     [18]
                                     [12]
                                     [18]
                                     [12]
                                     [18]
                                     [29]
                                       
                                       
                                     [14]
                                     [17]
                                     [13]
                                     [18]
                                     [13]
                                     [18]
                                     [13]
                                     [19]
                                     [30]
                                       
                                       
                                     [16]
                                     [17]
                                     [13]
                                     [19]
                                     [13]
                                     [19]
                                     [13]
                                     [19]
                                     [31]
                                       
                                       
                                       
                                       
                                     [14]
                                     [19]
                                     [14]
                                     [19]
                                     [14]
                                     [20]
                                     [32]
                                       
                                       
                                       
                                       
                                     [14]
                                     [20]
                                     [14]
                                     [20]
                                     [14]
                                     [20]
                                     [33]
                                       
                                       
                                       
                                       
                                     [15]
                                     [20]
                                     [15]
                                     [20]
                                     [15]
                                     [21]
                                     [34]
                                       
                                       
                                       
                                       
                                     [16]
                                     [21]
                                     [15]
                                     [21]
                                     [15]
                                     [21]
                                     [35]
                                       
                                       
                                       
                                       
                                     [16]
                                     [21]
                                     [16]
                                     [21]
                                     [16]
                                     [22]
                                     [36]
                                       
                                       
                                       
                                       
                                     [17]
                                     [22]
                                     [16]
                                     [22]
                                     [16]
                                     [22]
                                     [37]
                                       
                                       
                                       
                                       
                                     [17]
                                     [22]
                                     [17]
                                     [22]
                                     [17]
                                     [23]
                                     [38]
                                       
                                       
                                       
                                       
                                     [18]
                                     [22]
                                     [18]
                                     [23]
                                     [17]
                                     [23]
                                     [39]
                                       
                                       
                                       
                                       
                                     [18]
                                     [22]
                                     [18]
                                     [23]
                                     [18]
                                     [24]
                                     [40]
                                       
                                       
                                       
                                       
                                     [21]
                                     [22]
                                     [19]
                                     [24]
                                     [18]
                                     [24]
                                     [41]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [19]
                                     [24]
                                     [19]
                                     [25]
                                     [42]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [20]
                                     [25]
                                     [19]
                                     [26]
                                     [43]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [20]
                                     [25]
                                     [20]
                                     [26]
                                     [44]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [21]
                                     [26]
                                     [21]
                                     [27]
                                     [45]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [21]
                                     [27]
                                     [21]
                                     [27]
                                     [46]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [22]
                                     [27]
                                     [22]
                                     [28]
                                     [47]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [22]
                                     [27]
                                     [22]
                                     [28]
                                     [48]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [23]
                                     [27]
                                     [23]
                                     [29]
                                     [49]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [23]
                                     [27]
                                     [23]
                                     [29]
                                     [50]
                                       
                                       
                                       
                                       
                                       
                                       
                                     [26]
                                     [27]
                                     [24]
                                     [30]
                                     [51]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [24]
                                     [30]
                                     [52]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [25]
                                     [31]
                                     [53]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [25]
                                     [31]
                                     [54]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [26]
                                     [32]
                                     [55]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [26]
                                     [32]
                                     [56]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [27]
                                     [33]
                                     [57]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [27]
                                     [33]
                                     [58]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [28]
                                     [33]
                                     [59]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [28]
                                     [33]
                                     [60]
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                     [32]
                                     [33]
[a] Stage refers to the cumulative number of engines/equipment tested.

Subpart F -- Reporting Defects and Recalling Engines/Equipment


§1068.501  How do I report emission-related defects?
This section addresses the certificate holder's responsibility to investigate and report emission-related defects in design, materials, or workmanship. The provisions of this section do not limit your liability under this part or the Clean Air Act.  For example, selling an engine/equipment that does not conform to your application for certification is a violation of §1068.101(a)(1) independent of the requirements of this section.  The requirements of this section apply separately to each certificate holder if there is more than one certificate holder for the equipment.
(a) General provisions.  As a certifying manufacturer, you must investigate in certain circumstances whether engines/equipment that have been introduced into U.S. commerce under your certificate have incorrect, improperly installed, or otherwise defective emission-related components or systems.  This includes defects in design, materials, or workmanship.  You must also send us reports as specified by this section.
   (1) This section addresses defects for any of the following emission-related components or systems containing the following components: 
      (i) Electronic control units, aftertreatment devices, fuel-metering components, EGR-system components, crankcase-ventilation valves, all components related to charge-air compression and cooling, and all sensors associated with any of these components.
      (ii) For engines and equipment subject to evaporative emission standards, fuel tanks, fuel caps, and fuel lines and connectors.
      (iii) Any other component whose primary purpose is to reduce emissions. 
      (iv) Any other component whose failure would commonly increase emissions of any regulated pollutant without significantly degrading engine/equipment performance.
   (2) The requirements of this section relate to defects in any of the components or systems identified in paragraph (a)(1) of this section if the defects might affect any of the parameters or specifications in Appendix II of this part or might otherwise affect the emissions of any regulated pollutant. 
   (3) For the purposes of this section, defects do not include damage to emission-related components or systems (or maladjustment of parameters) caused by owners improperly maintaining or abusing their engines/equipment.
   (4) The requirements of this section do not apply to emission control information labels.  Note however, that §1068.101(a)(1) prohibits the sale of engines/equipment without proper labels, which also applies to misprinted labels.
   (5) You must track the information specified in paragraph (b)(1) of this section.  You must assess this data at least every three months to evaluate whether you exceed the thresholds specified in paragraphs (e) and (f) of this section.  Where thresholds are based on a percentage of engines/equipment in the family, use actual U.S.-directed production volumes for the whole model year when they become available.  Use projected production figures until the actual production figures become available. You are not required to collect additional information other than that specified in paragraph (b)(1) of this section before reaching a threshold for an investigation specified in paragraph (e) of this section.
   (6) You may ask us to allow you to use alternate methods for tracking, investigating, reporting, and correcting emission-related defects.  In your request, explain and demonstrate why you believe your alternate system will be at least as effective in the aggregate in tracking, identifying, investigating, evaluating, reporting, and correcting potential and actual emissions-related defects as the requirements in this section.  In this case, provide all available data necessary to demonstrate why an alternate system is appropriate for your engines/equipment and how it will result in a system at least as effective as that required under this section.
   (7) If we determine that emission-related defects result in a substantial number of properly maintained and used engines/equipment not conforming to the regulations of this chapter during their useful life, we may order you to conduct a recall of your engines/equipment (see §1068.505).
   (8) Send all reports required by this section to the Designated Compliance Officer.
   (9) This section distinguishes between defects and possible defects.  A possible defect exists anytime there is an indication that an emission-related component or system might have a defect, as described in paragraph (b)(1) of this section.
(b) Investigation of possible defects.  Investigate possible defects as follows:
   (1) If the number of engines/equipment that have a possible defect, as defined by this paragraph (b)(1), exceeds a threshold specified in paragraph (e) of this section, you must conduct an investigation to determine if an emission-related component or system is actually defective.  You must classify an engine/equipment component or system as having a possible defect if any of the following sources of information shows there is a significant possibility that a defect exists:
      (i) A warranty claim is submitted for the component, whether this is under your emission-related warranty or any other warranty.
      (ii) Your quality-assurance procedures suggest that a defect may exist. 
      (iii) You receive any other information for which good engineering judgment would indicate the component or system may be defective, such as information from dealers, field-service personnel, equipment manufacturers, hotline complaints, in-use testing, or engine diagnostic systems.
   (2) If the number of shipped replacement parts for any individual component is high enough that good engineering judgment would indicate a significant possibility that a defect exists, you must conduct an investigation to determine if it is actually defective.  Note that this paragraph (b)(2) does not require data-tracking or recording provisions related to shipment of replacement parts.
   (3) Your investigation must be prompt, thorough, consider all relevant information, follow accepted scientific and engineering principles, and be designed to obtain all the information specified in paragraph (d) of this section.
   (4) Your investigation needs to consider possible defects that occur only within the useful life period, or within five years after the end of the model year, whichever is longer.
   (5) You must continue your investigation until you are able to show that there is no emission-related defect or you obtain all the information specified for a defect report in paragraph (d) of this section. 
   (6) If a component with a possible defect is used in additional families or model years, you must investigate whether the component may be defective when used in these additional families or model years, and include these results in any defect report you send under paragraph (c) of this section.
   (7) If your initial investigation concludes that the number of engines/equipment with a defect is fewer than any of the thresholds specified in paragraph (f) of this section, but other information later becomes available that may show that the number of engines/equipment with a defect exceeds a threshold, then you must resume your investigation.  If you resume an investigation, you must include the information from the earlier investigation to determine whether to send a defect report.
(c) Reporting defects.  You must send us a defect report in either of the following cases:
   (1) Your investigation shows that the number of engines/equipment with a defect exceeds a threshold specified in paragraph (f) of this section.  Send the defect report within 21 days after the date you identify this number of defective engines/equipment.  See paragraph (h) of this section for reporting requirements that apply if the number of engines/equipment with a defect does not exceed any of the thresholds in paragraph (f) of this section.
   (2) You know there are emission-related defects for a component or system in a number of engines/equipment that exceeds a threshold specified in paragraph (f) of this section, regardless of how you obtain this information.  Send the defect report within 21 days after you learn that the number of defects exceeds a threshold.  Send us an updated defect report anytime you have significant additional information.
(d) Contents of a defect report. Include the following information in a defect report: 
   (1) Your corporate name and a person to contact regarding this defect.
   (2) A description of the defect, including a summary of any engineering analyses and associated data, if available.
   (3) A description of the engines/equipment that have the defect, including families, models, and range of production dates. 
   (4) An estimate of the number and percentage of each class or category of affected engines/equipment that have the defect, and an explanation of how you determined this number.  Describe any statistical methods you used under paragraph (g)(6) of this section.
   (5) An estimate of the defect's impact on emissions, with an explanation of how you calculated this estimate and a summary of any emission data demonstrating the impact of the defect, if available.
   (6) A description of your plan for addressing the defect or an explanation of your reasons for not believing the defects must be addressed.
(e) Thresholds for conducting a defect investigation.  You must begin a defect investigation based on the following number of engines/equipment that may have the defect:
   (1) For engines/equipment with maximum engine power at or below 560 kW:
      (i) For families with annual production below 500 units: 50 or more engines/equipment.
      (ii) For families with annual production from 500 to 50,000 units: more than 10.0 percent of the total number of engines/equipment in the family.
      (iii) For families with annual production from 50,000 to 550,000 units: more than the total number of engines/equipment represented by the following equation:
      Investigation threshold = 5,000 + (Production units - 50,000) x 0.04
      (iv) For families with annual production above 550,000 units: 25,000 or more engines/equipment.
   (2) For engines/equipment with maximum engine power greater than 560 kW:
      (i) For families with annual production below 250 units: 25 or more engines/equipment.
      (ii) For families with annual production at or above 250 units: more than 10.0 percent of the total number of engines/equipment in the family.
(f) Thresholds for filing a defect report. You must send a defect report based on the following number of engines/equipment that have the defect:
   (1) For engines/equipment with maximum engine power at or below 560 kW:
      (i) For families with annual production below 1,000 units: 20 or more engines/equipment.
      (ii) For families with annual production from 1,000 to 50,000 units: more than 2.0 percent of the total number of engines/equipment in the family.
      (iii) For families with annual production from 50,000 to 550,000 units: more than the total number of engines/equipment represented by the following equation:
      Reporting threshold = 1,000 + (Production units - 50,000) x 0.01
      (iv) For families with annual production above 550,000 units: 6,000 or more engines/equipment.
   (2) For engines/equipment with maximum engine power greater than 560 kW:
      (i) For families with annual production below 150 units: 10 or more engines/equipment.
      (ii) For families with annual production from 150 to 750 units: 15 or more engines/equipment.
      (iii) For families with annual production above 750 units: more than 2.0 percent of the total number of engines/equipment in the family.
   (g) How to count defects.  (1) Track defects separately for each model year and family as much as possible.  If information is not identifiable by model year or family, use good engineering judgment to evaluate whether you exceed a threshold in paragraph (e) or (f) of this section.  Consider only your U.S.-directed production volume.
   (2) Within a family, track defects together for all components or systems that are the same in all material respects.  If multiple companies separately supply a particular component or system, treat each company's component or system as unique.
   (3) For engine-based standards, if a possible defect is not attributed to any specific part of the engine, consider the complete engine a distinct component for evaluating whether you exceed a threshold in paragraph (e) of this section.   For equipment-based standards, if a possible defect is not attributed to any specific part of the equipment, consider the complete piece of equipment a distinct component for evaluating whether you exceed a threshold in paragraph (e) of this section.
   (4) If you correct defects before they reach the ultimate purchaser as a result of your quality-assurance procedures, count these against the investigation thresholds in paragraph (e) of this section unless you routinely check every engine or piece of equipment in the family.  Do not count any corrected defects as actual defects under paragraph (f) of this section.
   (5) Use aggregated data from all the different sources identified in paragraph (b)(1) of this section to determine whether you exceed a threshold in paragraphs (e) and (f) of this section. 
   (6) If information is readily available to conclude that the possible defects identified in paragraph (b)(1) of this section are actual defects, count these toward the reporting thresholds in paragraph (f) of this section. 
   (7) During an investigation, use appropriate statistical methods to project defect rates for engines/equipment that you are not otherwise able to evaluate.  For example, if 75 percent of the components replaced under warranty are available for evaluation, it would be appropriate to extrapolate known information on failure rates to the components that are unavailable for evaluation.  Take steps as necessary to prevent bias in sampled data.  Make adjusted calculations to take into account any bias that may remain.
(h) Investigation reports.  Once you trigger an investigation threshold under paragraph (e) of this section, you must report your progress and conclusions.  In your reports, include the information specified in paragraph (d) of this section, or explain why the information is not relevant.  Send us the following reports:
   (1) While you are investigating, send us mid-year and end-of-year reports to describe the methods you are using and the status of the investigation.  Send these status reports no later than June 30 and December 31 of each year.
   (2) If you find that the number of components or systems with an emission-related defect exceeds a threshold specified in paragraph (f) of this section, send us a report describing your findings within 21 days after the date you reach this conclusion. 
   (3) If you find that the number of components or systems with an emission-related defect does not exceed any of the thresholds specified in paragraph (f) of this section, send us a final report supporting this conclusion.  For example, you may exclude warranty claims that resulted from misdiagnosis and you may exclude defects caused by improper maintenance, improper use, or misfueling.  Send this report within 21 days after the date you reach this conclusion. 
(i) Future production.  If you identify a design or manufacturing defect that prevents engines/equipment from meeting the requirements of this part, you must correct the defect as soon as possible for future production of engines/equipment in every family affected by the defect.  This applies without regard to whether you are required to conduct a defect investigation or submit a defect report under this section.

§1068.505  How does the recall program work?
(a) If we make a determination that a substantial number of properly maintained and used engines/equipment do not conform to the regulations of this chapter during their useful life, you must submit a plan to remedy the nonconformity of your engines/equipment.  We will notify you of our determination in writing.  Our notice will identify the class or category of engines/equipment affected and describe how we reached our conclusion.  If this happens, you must meet the requirements and follow the instructions in this subpart.  You must remedy at your expense noncompliant engines/equipment that have been properly maintained and used, as described in §1068.510(a)(7), regardless of their age or extent of service accumulation at the time of repair.  You may not transfer this expense to a dealer (or equipment manufacturer for engine-based standards) through a franchise or other agreement.
(b)  You may ask for a hearing if you disagree with our determination (see subpart G of this part).
   (c)  Unless we withdraw the determination of noncompliance, you must respond to it by sending a remedial plan to the Designated Compliance Officer.  We will designate a date by which you must send us the remedial plan; the designated date will be no sooner than 45 days after we notify you, and no sooner than 30 days after a hearing. 
(d)  Once you have sold engines/equipment to the ultimate purchaser, we may inspect or test the engines/equipment only if the purchaser permits it, or if state or local inspection programs separately provide for it.
(e) You may ask us to allow you to conduct your recall differently than specified in this subpart, consistent with section 207(c) of the Clean Air Act (42 U.S.C. 7541(c)).
(f) You may do a voluntary recall under §1068.535 unless we have made the determination described in §1068.535(a).
(g) For purposes of recall, "owner" means someone who owns an engine or piece of equipment affected by a remedial plan.

§1068.510  How do I prepare and apply my remedial plan?
(a)  In your remedial plan, describe all of the following:
   (1)  The class or category of engines/equipment to be recalled, including the number of engines/equipment involved and the model year or other information needed to identify the engines/equipment.
   (2)  The modifications, alterations, repairs, corrections, adjustments, or other changes you will make to correct the affected engines/equipment.
   (3)  A brief description of the studies, tests, and data that support the effectiveness of the remedy you propose to use.
   (4)  The instructions you will send to those who will repair the engines/equipment under the remedial plan.
   (5)  How you will determine the owners' names and addresses.
   (6)  How you will notify owners; include a copy of any notification letters.
   (7)  The proper maintenance or use you will specify, if any, as a condition to be eligible for repair under the remedial plan.  Describe how these specifications meet the provisions of paragraph (e) of this section.  Describe how the owners should show they meet your conditions.
   (8)  The steps owners must take for you to do the repair.  You may set a date or a range of dates, specify the amount of time you need, and designate certain facilities to do the repairs.
   (9)   Which company (or group) you will assign to do or manage the repairs.
   (10) If your employees or authorized warranty agents will not be doing the work, state who will and describe their qualifications.
   (11)  How you will ensure an adequate and timely supply of parts.
   (12)  The effect of proposed changes on fuel consumption, driveability, and safety of the engines/equipment you will recall; include a brief summary of the information supporting these conclusions.
   (13)  How you intend to label the engines/equipment you repair and where you will place the label on the engine/equipment (see §1068.515).
(b)  We may require you to add information to your remedial plan.
(c) We may require you to test the proposed repair to show it will remedy the noncompliance.
(d)  Use all reasonable means to locate owners.  We may require you to use government or commercial registration lists to get owners' names and addresses so your notice will be effective. 
(e)  The maintenance or use that you specify as a condition for eligibility under the remedial plan may include only things you can show would cause noncompliance.  Do not require use of a component or service identified by brand, trade, or corporate name unless we approved this approach with your original certificate of conformity.  Also, do not place conditions on who maintained the engine/equipment.  
(f)  We may require you to adjust your repair plan if we determine owners would be without their engines or equipment for an unreasonably long time.
(g)  We will tell you in writing within 15 days of receiving your remedial plan whether we have approved or disapproved it.  We will explain our reasons for any disapproval.
(h)  Begin notifying owners within 15 days after we approve your remedial plan.  If we hold a hearing, but do not change our position about the noncompliance, you must begin notifying owners within 60 days after we complete the hearing unless we specify otherwise. 

§1068.515  How do I mark or label repaired engines/equipment?
(a)  Attach a label to engines/equipment you repair under the remedial plan.   At your discretion, you may label or mark engines/equipment you inspect but do not repair.
(b)  Make the label from a durable material suitable for its planned location.  Make sure no one can remove the label without destroying or defacing it.
(c)  On the label, designate the specific recall campaign and identify the facility where you repaired or inspected the engine/equipment.
(d)  We may waive or modify the labeling requirements if we determine they are overly burdensome.

§1068.520  How do I notify affected owners?
(a)  Notify owners by first class mail or e-mail unless we say otherwise.  We may require you to use certified mail.  Include the following in your notice:
   (1)  State: "The U.S. Environmental Protection Agency has determined that your engine/equipment may be emitting pollutants in excess of the federal emission standards as defined in Title 40 of the Code of Federal Regulations.  These emission standards were established to protect the public health or welfare from air pollution."
   (2)  State that you (or someone you designate) will repair these engines/equipment at your expense.
   (3)  If we approved maintenance and use conditions in your remedial plan, state that you will make these repairs only if owners show their engines/equipment meet the conditions for proper maintenance and use.  Describe these conditions and how owners should prove their engines/equipment are eligible for repair.  
   (4)  Describe the components your repair will affect and say generally how you will repair the engines/equipment.
   (5)  State that the engine/equipment, if not repaired, may fail an emission inspection test if state or local law requires one.
   (6)  Describe any adverse effects on its performance or driveability that would be caused by not repairing the engine/equipment.
   (7)  Describe any adverse effects on the functions of other components that would be caused by not repairing the engine/equipment.
   (8)  Specify the date you will start the repairs, the amount of time you will need to do them, and where you will do them.  Include any other information owners may need to know.
   (9)  Allow for the owner to inform you using one of the following methods if they have sold the engine/equipment:
      (i) Send a self-addressed card that owners can mail back to you; include a space for owners to write the name and address of a buyer.  
      (ii) Provide owners with a toll-free number and an e-mail address or Web site they can use to identify the name and address of a buyer.
   (10)  State that owners should call you at a phone number you give to report any difficulty in obtaining repairs.
   (11)  State:  "To ensure your full protection under the emission warranty on your [engine/equipment] by federal law, and your right to participate in future recalls, we recommend you have your [engine/equipment] serviced as soon as possible. We may consider your not servicing it to be improper maintenance."
(b)  We may require you to add information to your notice or to send more notices.
(c)  You may not in any communication with owners or dealers say or imply that your noncompliance does not exist or that it will not degrade air quality.

§1068.525  What records must I send to EPA?
(a)  Send us a copy of all communications related to the remedial plan you sent to dealers and others doing the repairs.  Mail or e-mail us the information at the same time you send it to others.
(b)  From the time you begin to notify owners, send us a report within 25 days of the end of each calendar quarter.  Send reports for six consecutive quarters or until all the engines/equipment are inspected, whichever comes first.  In these reports, identify the following:
   (1)  The range of dates you needed to notify owners.  
   (2)  The total number of notices sent.
   (3)  The number of engines/equipment you estimate fall under the remedial plan (explain how you determined this number).
   (4)  The cumulative number of engines/equipment you inspected under the remedial plan.
   (5)  The cumulative number of these engines/equipment you found needed the specified repair.
   (6)  The cumulative number of these engines/equipment you have repaired.
   (7)  The cumulative number of engines/equipment you determined to be unavailable due to exportation, theft, retirement, or other reasons (specify).
   (8)  The cumulative number of engines/equipment you disqualified for not being properly maintained or used.
(c)  If your estimated number of engines/equipment falling under the remedial plan changes, change the estimate in your next report and add an explanation for the change.
(d)  We may ask for more information.
(e)  We may waive reporting requirements or adjust the reporting schedule.
(f)  If anyone asks to see the information in your reports, we will follow the provisions of §1068.10 for handling confidential information.

§1068.530  What records must I keep?
We may review your records at any time so it is important that you keep required information readily available.  Keep records associated with your recall campaign for five years after you send the last report we require under §1068.525(b).  Organize and maintain your records as described in this section.
(a)  Keep a paper copy of the written reports described in §1068.525.
(b)  Keep a record of the names and addresses of owners you notified.  For each engine or piece of equipment, state whether you did any of the following:
   (1)  Inspected the engine/equipment.
   (2)  Disqualified the engine/equipment for not being properly maintained or used.
   (3)  Completed the prescribed repairs.
(c)  You may keep the records in paragraph (b) of this section in any form we can inspect, including computer databases.  

§1068.535  How can I do a voluntary recall for emission-related problems?
If we have made a determination that a substantial number of properly maintained and used engines/equipment do not conform to the regulations of this chapter during their useful life, you may not use a voluntary recall or other alternate means to meet your obligation to remedy the noncompliance.  Thus, this section applies only if you learn that your family does not meet the requirements of this chapter and we have not made such a determination.
(a)  To do a voluntary recall under this section, first send the Designated Compliance Officer a plan, following the guidelines in §1068.510.  Within 15 days, we will send you our comments on your plan.  
(b)  Once we approve your plan, start notifying owners and carrying out the specified repairs.  Make reasonable efforts to carry out the recall as quickly as possible.
(c)  From the time you start the recall campaign, send us a report within 25 days of the end of each calendar quarter, following the guidelines in §1068.525(b).  Send reports for six consecutive quarters or until all the engines/equipment are inspected, whichever comes first.  
(d)  Keep your reports and the supporting information as described in §1068.530. 

105.    Subpart G, consisting of §§ 1068.601, 1068.610, 1068.615, 1068.620, and 1068.650, is revised to read as follows:

Subpart G  -  Hearings
Sec.
1068.601  Overview.
1068.610  Request for hearing -- suspending, revoking, or voiding a certificate of conformity.
1068.615  Request for hearing -- determinations related to certification.
1068.620  Request for hearing -- nonconformance penalties.
1068.650  Procedures for informal hearings.

Subpart G  -  Hearings

§1068.601 Overview.
The regulations of this chapter involve numerous provisions that may result in EPA making a decision or judgment that you may consider adverse to your interests and that either limits your business activities or requires you to pay penalties.  As specified in the regulations, this might involve an opportunity for an informal hearing or a formal hearing that follows specific procedures and is directed by a Presiding Officer.  The regulations generally specify when we would hold a hearing.  In limited circumstances, we may grant a request for a hearing related to adverse decisions regarding regulatory provisions for which we do not specifically describe the possibility of asking for a hearing. 
(a) If you request a hearing regarding our decision to assess administrative penalties under §1068.125, we will hold a formal hearing according to the provisions of 40 CFR 22.1 through 22.32 and 22.34.  
(b) For other issues where the regulation allows for a hearing in response to an adverse decision, you may request an informal hearing as described in §1068.650.  Sections 1068.610 through 1068.625 describe when and how to request an informal hearing under various circumstances.  
(c) The time limits we specify are calendar days and include weekends and holidays, except that a deadline falling on a Saturday, Sunday, or a federal holiday is understood to move to the next business day.  Your filing will be considered timely based on the following criteria relative to the specified deadline:
   (1) The postmarked date for items sent by U.S. mail must be on or before the specified date.
   (2) The ship date for items sent from any location within the United States by commercial carriers must be on or before the specified date. 
   (3) Items sent by mail or courier from outside the United States must be received by the specified date.
   (4) The time and date stamp on an e-mail message must be at or before 5:00 pm on the specified date.
   (5) The time and date stamp on faxed pages must be at or before 5:00 pm on the specified date.
   (6) Hand-delivered items must be received by the appropriate personnel by 3:00 pm on the specified date.
(d) See the standard-setting part for additional information.  If the standard-setting part specifies any provisions that are contrary to those described in this subpart, the provisions of the standard-setting part apply instead of those described in this subpart.

§1068.610  Request for hearing -- suspending, revoking, or voiding a certificate of conformity.
(a) You may request an informal hearing as described in §1068.650 if you disagree with our decision to suspend, revoke, or void a certificate of conformity.  We will approve your request for an informal hearing under this paragraph (a) if we find that your request raises a substantial factual issue in the decision we made that, if addressed differently, could alter the outcome of that decision.
(b) If you request a hearing regarding the outcome of a testing regimen with established evaluation criteria, such as selective enforcement audits or routine production-line testing, we will hold a hearing limited to the following issues that are relevant to your circumstances:
   (1) Whether tests were conducted in accordance with applicable regulations.
   (2) Whether test equipment was properly calibrated and functioning.
   (3) Whether specified sampling procedures were followed to select engines/equipment for testing.
   (4) Whether there is a basis for determining that the problems identified do not apply for engines/equipment produced at plants other than the one from which engines/equipment were selected for testing.
(c) You must send your hearing request in writing to the Designated Compliance Officer no later than 30 days after we notify you of our decision to suspend, revoke, or void your certificate, or by some later deadline we specify.  If the deadline passes, we may nevertheless grant you a hearing at our discretion.  
(d) Your hearing request must include the following information:
   (1) Identify the classes or categories of engines/equipment that will be the subject of the hearing.
   (2) State briefly which issues you will raise at the hearing for each affected class or category of engines/equipment. 
   (3) Specify why you believe the hearing will conclude in your favor for each of the issues you will raise.  
   (4) Summarize the evidence supporting your position on each of the issues you will raise and include any supporting data.

§1068.615  Request for hearing -- denied application for certification, automatically suspended certificate, and determinations related to certification. 
(a) You may request an informal hearing as described in §1068.650 if we deny your application for a certificate of conformity, if your certificate of conformity is automatically suspended under the regulations, or if you disagree with determinations we make as part of the certification process.  For example, you might disagree with our determinations regarding adjustable parameters under §1068.50 or regarding your good engineering judgment under §1068.5.  
(b) You must send your hearing request in writing to the Designated Compliance Officer no later than 30 days after we notify you of our decision, or by some later deadline we specify.  If the specified deadline passes, we may nevertheless grant you a hearing at our discretion.  
(c) Your hearing request must include the information specified in §1068.610(d).
(d) We will approve your request for an informal hearing if we find that your request raises a substantial factual issue in the decision we made that, if addressed differently, could alter the outcome of that decision.

§1068.620  Request for hearing -- recall. 
(a) You may request an informal hearing as described in §1068.650 if you disagree with our decision to order a recall.  
(b) You must send your hearing request in writing to the Designated Compliance Officer no later than 45 days after we notify you of our decision, or by some later deadline we specify.  If the specified deadline passes, we may nevertheless grant you a hearing at our discretion.  
(c) Your hearing request must include the information specified in §1068.610(d).

§1068.625  Request for hearing -- nonconformance penalties.
(a) You may request an informal hearing as described in §1068.650 if you disagree with our determination of compliance level or penalty calculation or both.  The hearing will address only whether the compliance level or penalty was determined in accordance with the regulations.  
(b) Send a request for a hearing in writing to the Designated Compliance Officer within the following time frame, as applicable:
   (1) No later than 15 days after we notify you that we have approved a nonconformance penalty under this subpart if the compliance level is in the allowable range of nonconformity.
   (2) No later than 15 days after completion of the Production Compliance Audit if the compliance level exceeds the upper limit.
   (3) No later than 15 days after we notify you of an adverse decision for all other cases.
(c) If you miss the specified deadline in paragraph (b) of this section, we may nevertheless grant you a hearing at our discretion.  
(d) Your hearing request must include the information specified in §1068.610(d).
(e) We will approve your request for an informal hearing if we find that your request raises a substantial factual issue in the decision we made that, if addressed differently, could alter the outcome of that decision.

§1068.650  Procedures for informal hearings.
   (a) The following provisions apply for arranging the hearing:
   (1) After granting your request for an informal hearing, we will designate a Presiding Officer for the hearing.  
   (2) The Presiding Officer will select the time and place for the hearing.  The hearing must be held as soon as practicable for all parties involved.
   (3) The Presiding Officer may require that all argument and presentation of evidence be concluded by a certain date after commencement of the hearing. 
(b) The Presiding Officer will establish a paper or electronic hearing record, which may be made available for inspection.  The hearing record includes, but is not limited to, the following materials: 
   (1) All documents relating to the application for certification, including the certificate of conformity itself, if applicable.
   (2) Your request for a hearing and the accompanying supporting data. 
   (3) Correspondence and other data relevant to the hearing.
   (4) The Presiding Officer's written decision regarding the subject of the hearing, together with any accompanying material.
(c) You may appear in person or you may be represented by counsel or by any other representative you designate.
(d) The Presiding Officer may arrange for a prehearing conference, either in response to a request from any party or at his or her own discretion.  The Presiding Officer will select the time and place for the prehearing conference. The Presiding Officer will summarize the results of the conference and include the written summary as part of the record.  The prehearing conference may involve consideration of the following items:
   (1) Simplification of the issues.
   (2) Stipulations, admissions of fact, and the introduction of documents.
   (3) Limitation of the number of expert witnesses.
   (4) Possibility of reaching an agreement to resolve any or all of the issues in dispute.
   (5) Any other matters that may aid in expeditiously and successfully concluding the hearing.
(e) Hearings will be conducted as follows:
   (1) The Presiding Officer will conduct informal hearings in an orderly and expeditious manner. The parties may offer oral or written evidence; however, the Presiding Officer may exclude evidence that is irrelevant, immaterial, or repetitious.
   (2) Witnesses will not be required to testify under oath; however, the Presiding Officer must make clear that 18 U.S.C. 1001 specifies civil and criminal penalties for knowingly making false statements or representations or using false documents in any matter within the jurisdiction of EPA or any other department or agency of the United States.
   (3) Any witness may be examined or cross-examined by the Presiding Officer, by you, or by any other parties.
   (4) Written transcripts must be made for all hearings.  Anyone may purchase copies of transcripts from the reporter.
   (f) The Presiding Officer will make a final decision with written findings, conclusions and supporting rationale on all the substantial factual issues presented in the record. The findings, conclusions, and written decision must be provided to the parties and made a part of the record. 
Appendix I to Part 1068 -- Emission-Related Components

This appendix specifies emission-related components that we refer to for describing such things as emission-related warranty or requirements related to rebuilding engines.  Note that inclusion of a component in Section III of this Appendix does not make it an emission-related component for engines/equipment that are not subject to evaporative emission standards.
I. For exhaust emissions, emission-related components include any engine parts related to the following systems: 
	1. Air-induction system.
   2. Fuel system.
   3. Ignition system.
   4. Exhaust gas recirculation systems.
II. 	The following parts are also considered emission-related components for exhaust emissions:
   1. Aftertreatment devices.
	2. Crankcase ventilation valves.
   3. Sensors.
   4. Electronic control units. 
III. The following parts are considered emission-related components for evaporative emissions:
   1. Fuel Tank.
   2. Fuel Cap.
   3. Fuel Line.
   4. Fuel Line Fittings.
   5. Clamps*.
   6. Pressure Relief Valves*.
   7. Control Valves*.
   8. Control Solenoids*.
   9. Electronic Controls*.
   10. Vacuum Control Diaphragms*.
   11. Control Cables*.
   12. Control Linkages*.
   13. Purge Valves.
   14. Vapor Hoses.
   15. Liquid/Vapor Separator.
   16. Carbon Canister.
   17. Canister Mounting Brackets.
   18. Carburetor Purge Port Connector.
   *As related to the evaporative emission control system.
IV. Emission-related components also include any other part whose primary purpose is to reduce emissions or whose failure would commonly increase emissions without significantly degrading engine/equipment performance. 
Appendix II to Part 1068 -- Emission-Related Parameters and Specifications

This appendix specifies emission-related parameters and specifications that we refer to for describing such things as emission-related defects or requirements related to rebuilding engines.
I. Basic Engine Parameters for Reciprocating Engines.
   1. Compression ratio.
   2. Type of air aspiration (natural, Roots-blown, supercharged, turbocharged).
   3. Valves (intake and exhaust).
      a. Head diameter dimension.
      b. Valve lifter or actuator type and valve lash dimension.
   4. Camshaft timing.
      a. Valve opening - intake exhaust (degrees from top-dead center or bottom-dead center).
      b. Valve closing - intake exhaust (degrees from top-dead center or bottom-dead center).
      c. Valve overlap (degrees).
   5. Ports -- two stroke engines (intake and/or exhaust).
      a. Flow area.
      
      b. Opening timing (degrees from top-dead center or bottom-dead center).
      c. Closing timing (degrees from top-dead center or bottom-dead center).
II. Intake Air System.
   1. Roots blower/supercharger/turbocharger calibration.
   2. Charge air cooling.
      a. Type (air-to-air; air-to-liquid).
      b. Type of liquid cooling (engine coolant, dedicated cooling system).
      c. Performance.
   3. Temperature control system calibration.
   4. Maximum allowable inlet air restriction. 
III. Fuel System.
   1. General.
      a. Engine idle speed.
      b. Engine idle mixture.
   2. Carburetion.
      a. Air-fuel flow calibration.
      b. Idle mixture.
      c. Transient enrichment system calibration.
      d. Starting enrichment system calibration.
      e. Altitude compensation system calibration.
      f. Hot idle compensation system calibration.
   3. Fuel injection for spark-ignition engines.
       		a. Control parameters and calibrations.
      b. Idle mixture.
      c. Fuel shutoff system calibration.
      d. Starting enrichment system calibration.
      e. Transient enrichment system calibration.
      f. Air-fuel flow calibration.
      g. Altitude compensation system calibration.
      h. Operating pressure(s).
      i. Injector timing calibration.
   4. Fuel injection for compression-ignition engines.
      a. Control parameters and calibrations.
      b. Transient enrichment system calibration.
      c. Air-fuel flow calibration.
      d. Altitude compensation system calibration.
      e. Operating pressure(s).
      f. Injector timing calibration.
IV. Ignition System for Spark-ignition Engines.
   1. Control parameters and calibration.
   2. Initial timing setting.
   3. Dwell setting.
   4. Altitude compensation system calibration.
   5. Spark plug voltage.
V. Engine Cooling System -- thermostat calibration.
VI. Exhaust System -- maximum allowable back pressure.
VII. System for Controlling Exhaust Emissions.
   1. Air injection system.
      a. Control parameters and calibrations.
      b. Pump flow rate.
   2. EGR system.
      a. Control parameters and calibrations.
      b. EGR valve flow calibration.
   3. Catalytic converter system.
      a. Active surface area.
      b. Volume of catalyst.
      c. Conversion efficiency.
   4. Backpressure.
VIII. System for Controlling Crankcase Emissions.
   1. Control parameters and calibrations.
   2. Valve calibrations.
IX. Auxiliary Emission Control Devices (AECD).
   1. Control parameters and calibrations.
   2. Component calibration(s).
X. System for Controlling Evaporative Emissions.
   1. Control parameters and calibrations.
   2. Fuel tank.
      a. Volume.
      b. Pressure and vacuum relief settings.
XI. Warning Systems Related to Emission Controls.
   1. Control parameters and calibrations.
   2. Component calibrations.
Appendix III to Part 1068 --  High-Altitude Counties

In some cases the standard-setting part includes requirements or other specifications that apply for high-altitude counties.  The following counties have substantial populated areas above 4,000 feet above sea level and are therefore considered to be high-altitude counties:

STATE OF ARIZONA
Apache
Cochise
Coconino
Navajo
Yavapai
STATE OF COLORADO
Adams
Alamosa
Arapahoe
Archuleta
Boulder
Chaffee
Cheyenne
Clear Creek
Conejos
Costilla
Crowley
Custer
Delta
Denver
Dolores
Douglas
Eagle
Elbert
El Paso
Fremont
Garfield
Gilpin
Grand
Gunnison
Hinsdale
Huerfano
Jackson
Jefferson
Kit Carson
Lake
La Plata
Larimer
Las Animas
Lincoln
Mesa
Mineral
Moffat
Montezuma
Montrose
Morgan
Otero
Ouray
Park
Pitkin
Pueblo
Rio Blanco
Rio Grande
Routt
Saguache
San Juan
San Miguel
Summit
Teller
Washington 
Weld
STATE OF IDAHO
Bannock
Bear Lake
Bingham
Blaine
Bonneville
Butte
Camas
Caribou
Cassia
Clark
Custer
Franklin
Fremont
Jefferson
Lemhi
Madison
Minidoka
Oneida
Power
Teton
Valley
STATE OF MONTANA
Beaverhead
Deer Lodge
Gallatin
Jefferson
Judith Basin
Powell
Madison
Meagher
Park
Silver Bow
Wheatland
STATE OF NEBRASKA
Banner
Cheyenne
Kimball
Sioux
STATE OF NEVADA
Carson City
Douglas
Elko
Esmeralda
Eureka
Humboldt
Lander
Lincoln
Lyon
Mineral
Nye
Pershing
Storey
Washoe
White Pine
STATE OF NEW MEXICO
Bernalillo
Catron
Colfax
Curry
De Baca
Grant
Guadalupe
Harding
Hidalgo
Lincoln
Los Alamos
Luna
McKinley
Mora
Otero
Rio Arriba
Roosevelt
Sandoval
San Juan
San Miguel
Santa Fe
Sierra
Socorro
Taos
Torrance
Union
Valencia
STATE OF OREGON
Harney
Lake
Klamath
STATE OF TEXAS
Jeff Davis
Judspeth
Parmer
STATE OF UTAH
Beaver
Box Elder
Cache
Carbon
Daggett
Davis
Duchesne
Emery
Garfield
Grand
Iron
Juab
Kane
Millard
Morgan
Piute
Rich
Salt Lake
San Juan
Sanpete
Sevier
Summit
Tooele
Uintah
Utah
Wasatch
Wayne
Weber
STATE OF WYOMING
Albany
Campbell
Carbon
Converse
Fremont
Goshen
Hot Springs
Johnson
Laramie
Lincoln
Natrona
Niobrara
Park
Platte
Sublette
Sweetwater
Teton
Uinta
Washakie
Weston







Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles - Phase 2: Proposed Rules, pages 1169 of 1170.

Dated:  _______________________

_____________________________________________________
Anthony Foxx, Secretary, 
Department of Transportation






Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles - Phase 2: Proposed Rules, pages 1170 of 1170.

Dated:  _______________________

_____________________________________________________
Gina McCarthy, 
Administrator, Environmental Protection Agency

                                       
