TABLE OF CONTENTS

EXECUTIVE SUMMARY									ES-1

Chapter 1:	Industry Characterization
1.1	Introduction	   1-1

Chapter 2:	Technology and Cost
2.1	Overview of Technologies	2-1
2.2	Technology Principles  -  SI Engines	2-2
2.3	Technology Principles  -  CI Engines	2-8
2.4	Technology Principles - Vehicles	2-14
2.5	Technology Application and Estimated Costs  -  HD Pickups and Vans	2-47
2.6	Technology Application  -  SI Engines	2-63
2.7	Technology Application and Estimated Costs  -  CI Engines	2-69
2.8	Technology Application and Estimated Costs  -  Tractors	2-80
2.9	Technology Application and Estimated Costs  -  Vocational Vehicles	2-109
2.10	Technology Application and Estimated Costs  -  Trailers	2-148
2.11	Natural Gas	2-177
2.12	Technology Costs	2-178
2.13	Package Costs	2-259

Chapter 3:	Test Procedures
3.1	Heavy-Duty Engine Test Procedure	3-1
3.2	Aerodynamic Assessment	3-4
3.3	Tire Rolling Resistance	3-47
3.4	Duty Cycle	3-49
3.5	Tare Weights and Payload	3-55
3.6	Powertrain Test Procedures	3-58
3.7	Hybrid Powertrain Test Procedures	3-63
3.8	Rear Axle Efficiency Test	3-65
3.9	HD Pickup Truck and Van Chassis Test Procedure	3-66
3.10	Alternative Certification Approach	3-69

Chapter 4:	Vehicle Simulation Model
4.1	Purpose and Scope	4-1
4.2	Model Code Description	4-2
4.3	Validation of Phase 2 GEM Simulations	4-10
4.4	EPA and NHTSA HD Vehicle Compliance Model	4-21
4.5	Technology Improvements that Are Recognized in GEM without Simulation	4-33

Chapter 5:	Impacts on Emissions and Fuel Consumption
5.1	Executive Summary	5-1
5.2	Introduction	5-7
5.3	Program Analysis and Modeling Methods	5-9
5.4	Greenhouse Gas Emission and Fuel Consumption Impacts	5-27
5.5	Non-Greenhouse Gas Emission Impacts	5-44

Chapter 6:	Health and Environmental Impacts
6.1	Health and Environmental Effects of Non-GHG Pollutants	6-1
6.2	Air Quality Impacts of Non-GHG Pollutants	6-32
6.3	Changes in Atmospheric CO2 Concentrations, Global Mean Temperature, Sea Level Rise, and Ocean pH Associated with the Program's GHG Emissions Reductions	6-40

Chapter 7:	Vehicle-Related Costs, Fuel Savings &
Maintenance Costs
7.1	Vehicle Costs, Fuel Savings and Maintenance Costs vs. the Less Dynamic Baseline and using Method B	7-1
7.2	Vehicle Costs, Fuel Savings and Maintenance Costs vs. the Dynamic Baseline and Using Method A	7-28
7.3	Key Parameters Used in the Estimation of Costs and Fuel Savings	7-48

Chapter 8.	Economic and Other Impacts
8.1	Framework for Benefits and Costs	8-1
8.2	Conceptual Framework for Evaluating Impacts	8-2
8.3	Analysis of the Rebound Effect	8-9
8.4	Impact on Class Shifting, Fleet Turnover, and Sales	8-28
8.5	Monetized GHG Impacts	8-32
8.6	Quantified and Monetized Non-GHG Health and Environmental Impacts	8-45
8.7	Additional Impacts	8-57
8.8	The Effect of Safety Standards and Voluntary Safety Improvements on Vehicle Weight		8-65
8.9	Petroleum, Energy and National Security impact	8-69
8.10	Summary of Benefits and Costs	8-83
8.11	Employment Impacts	8-87
8.12	Oil Price Sensitivity Analysis	8-98

Chapter 9.	Safety Impacts		
0.1 Summary of Supporting HD Vehicle Safety Research
0.2 National Academy of Sciences HD Phase 1 and Phase 2 Reports
0.3 DOT CAFE Model HD Pickup and Van Safety Analysis 
0.4 Volpe Research on MD/HD Fuel Efficiency Technologies 
0.5 Oak Ridge National Laboratory (ORNL) Research on Low Rolling Resistance Truck Tires
0.6 The Agencies' Assessment of Potential Safety Impacts
CHAPTER 10:	CAFE Model
10.1	HD Pickup and Van Fleet	10-1
10.2	CAFE Model Analysis of Regulatory Alternatives for HD Pickups and Vans	10-12

Chapter 11:	Results of Preferred and Alternative Standards
11.1	What Are the Alternatives that the Agencies Considered?	11-1
11.2	How Do These Alternatives Compare in Overall GHG Emissions Reductions and Fuel Efficiency and Cost?	11-16
11.3	Detailed Technology Projections for Each Category	11-24

Chapter 12:	Initial Regulatory Flexibility Analysis
12.1	Overview of the Regulatory Flexibility Act	12-1
12.2	Need for Rulemaking and Rulemaking Objectives	12-2
12.3	Definition and Description of Small Businesses	12-2
12.4	Summary of Small Entities to which the Rulemaking will Apply	12-3
12.5	Related Federal Rules	12-4
12.6	Projected Reporting, Recordkeeping, and Other Compliance Requirements	12-4
12.7	Regulatory Flexibilities	12-4
12.8	Projected Economic Effects of the Proposed Rulemaking	12-9

Chapter 13:	Natural Gas Vehicles and Engines
13.1	Detailed Life-Cycle Analysis	13-1
13.2	Projecting Natural Gas use in HD Trucks	13-25
13.3	Natural Gas Emission Control Measures	13-37
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                               List of Acronyms
ug
Microgram
um
Micrometers
2002$ 
U.S. Dollars in calendar year 2002
2009$ 
U.S. Dollars in calendar year 2009
A/C
Air Conditioning
ABS
Antilock Brake Systems
ABT
Averaging, Banking and Trading
AC
Alternating Current
ACES
Advanced Collaborative Emission Study
ALVW
Adjusted Loaded Vehicle Weight
AEO
Annual Energy Outlook
AES
Automatic Engine Shutdown
AHS
American Housing Survey
AMOC
Atlantic Meridional Overturning Circulation
AMT
Automated Manual Transmission
ANL
Argonne National Laboratory
APU
Auxiliary Power Unit
AQ
Air Quality  
AQCD
Air Quality Criteria Document
AR4
Fourth Assessment Report
ARB
California Air Resources Board 
ASL
Aggressive Shift Logic
ASPEN
Assessment System for Population Exposure Nationwide 
AT
Automatic Transmissions
ATA
American Trucking Association
ATIS
Automated Tire Inflation System
ATRI
Alliance for Transportation Research Institute
ATSDR
Agency for Toxic Substances and Disease Registry
ATUS
American Time Use Survey
Avg
Average
BAC
Battery Air Conditioning
BenMAP
Benefits Mapping and Analysis Program
bhp
Brake Horsepower
bhp-hrs
Brake Horsepower Hours
BLS
Bureau of Labor Statistics
BSFC
Brake Specific Fuel Consumption
BTS
Bureau of Transportation Statistics
BTS
Bureau of Labor Statistics
BTU
British Thermal Unit
CAA
Clean Air Act
CAAA
Clean Air Act Amendments
CAD/CAE
Computer Aided Design And Engineering
CAE
Computer Aided Engineering
CAFE
Corporate Average Fuel Economy
CARB
California Air Resources Board 
CBI
Confidential Business Information
CCP
Coupled Cam Phasing
CCSP
Climate Change Science Program
Cd
Coefficient of Drag
CDC
Centers for Disease Control
CFD
Computational Fluid Dynamics
CFR
Code of Federal Regulations
CH4
Methane
CILCC
Combined International Local and Commuter Cycle
CITT
Chemical Industry Institute of Toxicology
CMAQ
Community Multiscale Air Quality
CO
Carbon Monoxide
CO2
Carbon Dioxide
CO2eq
CO2 Equivalent
COFC
Container-on-Flatcar
COI
Cost of Illness
COPD
Chronic Obstructive Pulmonary Disease
CoV
Coefficient of Variation
CPS
Cam Profile Switching
CRC
Coordinating Research Council
CRGNSA
Columbia River Gorge National Scenic Area
CRR
Rolling Resistance Coefficient
CS
Climate Sensitivity
CSI
Cambridge Systematics Inc.
CSS
Coastal Sage Scrub
CSV
Comma-separated Values
CVD
Cardiovascular Disease
CVT
Continuously-Variable Transmission
CW
Curb Weight
D/UAF
Downward and Upward Adjustment Factor
DCP
Dual Cam Phasing
DCT
Dual Clutch Transmission
DE
Diesel Exhaust
DEAC
Cylinder Deactivation
DEER
Diesel Engine-Efficiency and Emissions Research
DEF
Diesel Exhaust Fluid
DHHS
U.S. Department of Health and Human Services
Diesel HAD
Diesel Health Assessment Document
DMC
Direct Manufacturing Costs
DO
Dissolved Oxygen
DOC
Diesel Oxidation Catalyst
DOD
Department of Defense
DOE
Department of Energy
DOHC
Dual Overhead Camshaft Engines
DOT
Department of Transportation
DPF
Diesel Particulate Filter
DPM
Diesel Particulate Matter
DR
Discount Rate
DRIA
Draft Regulatory Impact Analysis
DVVL
Discrete Variable Valve Lift
EC
European Commission
EC
Elemental Carbon
ECU
Electronic Control Unit
ED
Emergency Department
EERA
Energy and Environmental Research Associates
EFR
Engine Friction Reduction
EGR
Exhaust Gas Recirculation
EHPS
Electrohydraulic Power Steering
EIA
Energy Information Administration (part of the U.S. Department of Energy)
EISA
Energy Independence and Security Act
EMS-HAP
Emissions Modeling System for Hazardous Air Pollution
EO
Executive Order
EPA
Environmental Protection Agency
EPS
Electric Power Steering
ERG
Eastern Research Group
ESC
Electronic Stability Control
EV
Electric Vehicle
F
Frequency
FEL
Family Emission Limit
FET
Federal Excise Tax
FEV1
Functional Expiratory Volume
FHWA
Federal Highway Administration
FIA
Forest Inventory and Analysis
FMCSA
Federal Motor Carrier Safety Administration
FOH
Fuel Operated Heater
FR
Federal Register
FTP
Federal Test Procedure
FVC
Forced Vital Capacity
g
Gram 
g/s
Gram-per-second
g/ton-mile
Grams emitted to move one ton (2000 pounds) of freight over one mile
gal
Gallon
gal/1000 ton-mile
Gallons of fuel used to move one ton of payload (2,000 pounds) over 1000 miles
GCAM
Global Change Assessment Model
GCW
Gross Combined Weight
GDP
Gross Domestic Product
GEM
Greenhouse gas Emissions Model
GEOS
Goddard Earth Observing System
GHG
Greenhouse Gases
GIFT
Geospatial Intermodal Freight Transportation
GREET
Greenhouse Gases, Regulated Emissions, and Energy Use in Transportation
GSF1
Generic Speed Form one
GUI
Graphical User Interface
GVWR
Gross Vehicle Weight Rating
GWP
Global Warming Potential
HABs
Harmful Algal Blooms
HAD
Diesel Health Assessment Document
HC
Hydrocarbon
HD
Heavy-Duty
HDUDDS
Heavy Duty Urban Dynamometer Driving Cycle
HEG
High Efficiency Gearbox
HEI
Health Effects Institute 
HES
Health Effects Subcommittee 
HEV
Hybrid Electric Vehicle
HFC
Hydrofluorocarbon
HFET
Highway Fuel Economy Dynamometer Procedure
HHD
Heavy Heavy-Duty
HHDDT
Highway Heavy-Duty Diesel Transient
hp
Horsepower
hrs
Hours
HRV
Heart Rate Variability
HSC
High Speed Cruise Duty Cycle
HTUF
Hybrid Truck User Forum
hz
Hertz
IARC
International Agency for Research on Cancer
IATC
Improved Automatic Transmission Control
IC
Indirect Costs
ICCT
International Council on Clean Transport
ICD
International Classification of Diseases
ICF
ICF International
ICM
Indirect Cost Multiplier
ICP
Intake Cam Phasing
IMAC
Improved Mobile Air Conditioning
IMPROVE
Interagency Monitoring of Protected Visual Environments
IPCC
Intergovernmental Panel on Climate Change
IRFA
Initial Regulatory Flexibility Analysis
IRIS
Integrated Risk Information System
ISA
Integrated Science Assessment
JAMA
Journal of the American Medical Association
k
Thousand
kg
Kilogram
KI
kinetic intensity
km
Kilometer
km/h
Kilometers per Hour
kW
Kilowatt
L 
Liter
lb
Pound
LD
Light-Duty
LHD
Light Heavy-Duty
LLNL
Lawrence Livermore National Laboratory's
LRR
Lower Rolling Resistance
LSC 
Low Speed Cruise Duty Cycle
LT 
Light Trucks
LTCCS
Large Truck Crash Causation Study
LUB
Low Friction Lubes
LUC
Land Use Change
m[2]
Square Meters
m[3]
Cubic Meters
MAGICC
Model for the Assessment of Greenhouse-gas Induced Climate Change
MCF
Mixed Conifer Forest
MD
Medium-Duty
MDPV
Medium-Duty Passenger Vehicles
mg
Milligram
MHD
Medium Heavy-Duty
MHEV
Mild Hybrid
mi
mile
min
Minute
MM
Million
MMBD
Million Barrels per Day
MMT
Million Metric Tons
MOVES
Motor Vehicle Emissions Simulator
mpg
Miles per Gallon
mph
Miles per Hour
MSAT
Mobile Source Air Toxic
MRL
Minimal Risk Level
MT
Manual Transmission
MY
Model Year
N2O
Nitrous Oxide
NA 
Not Applicable
NAAQS
National Ambient Air Quality Standards
NAFA
National Association of Fleet Administrators
NAICS
North American Industry Classification System 
NAS
National Academy of Sciences
NATA
National Air Toxic Assessment 
NCAR
National Center for Atmospheric Research
NCI
National Cancer Institute
NCLAN
National Crop Loss Assessment Network
NEC
Net Energy Change Tolerance
NEI
National Emissions Inventory
NEMS
National Energy Modeling System
NEPA
National Environmental Policy Act
NESCAUM
Northeastern States for Coordinated Air Use Management
NESCCAF
Northeast States Center for a Clean Air Future
NESHAP
National Emissions Standards for Hazardous Air Pollutants
NHS
National Highway System
NHTSA
National Highway Traffic Safety Administration
NiMH
Nickel Metal-Hydride
NIOSH
National Institute of Occupational Safety and Health
Nm
Newton-meters
NMHC
Nonmethane Hydrocarbons
NMMAPS
National Morbidity, Mortality, and Air Pollution Study
NOX
Nitrogen Oxide
NO2
Nitrogen Dioxide
NOAA
National Oceanic and Atmospheric Administration 
NOx
Oxides of Nitrogen
NPRM
Notice of Proposed Rulemaking
NPV
Net Present Value
NRC
National Research Council
NRC-CAN
National Research Council of Canada
NREL
National Renewable Energy Laboratory
NTP
National Toxicology Program
NVH
Noise Vibration and Harshness
O&M
Operating and maintenance
O3
Ozone
OAQPS
Office of Air Quality Planning and Standards
OC
Organic Carbon
OE
Original Equipment
OEHHA 
Office of Environmental Health Hazard Assessment
OEM
Original Equipment Manufacturer
OHV
Overhead Valve
OMB
Office of Management and Budget
OPEC
Organization of Petroleum Exporting Countries
ORD
EPA's Office of Research and Development
ORNL
Oak Ridge National Laboratory
OTAQ
Office of Transportation and Air Quality
Pa
Pascal
PAH
Polycyclic Aromatic Hydrocarbons
PEF
Peak Expiratory Flow
PEMS
Portable Emissions Monitoring System
PGM
Platinum Group Metal
PHEV
Plug-in Hybrid Electric Vehicles
PM
Particulate Matter
PM10
Coarse Particulate Matter (diameter of 10 um or less)
PM2.5
Fine Particulate Matter (diameter of 2.5 um or less)
POM
Polycyclic Organic Matter
Ppb
Parts per Billion
Ppm
Parts per Million
Psi
Pounds per Square Inch
PTO
Power Take Off
R&D
Research and Development
RBM
Resisting Bending Moment
REL
Reference Exposure Level
RESS
Rechargeable Energy Storage System
RFA
Regulatory Flexibility Act
RfC
Reference Concentration
RFS2
Renewable Fuel Standard 2
RIA
Regulatory Impact Analysis
RPE
Retail Price Equivalent
Rpm
Revolutions per Minute
RSWT
Reduced-Scale Wind Tunnel
S
Second
SAB
Science Advisory Board
SAB-HES
Science Advisory Board - Health Effects Subcommittee
SAE
Society of Automotive Engineers
SAR
Second Assessment Report
SAV
Submerged Aquatic Vegetation
SBA
Small Business Administration
SBAR
Small Business Advocacy Review
SBREFA
Small Business Regulatory Enforcement Fairness Act
SCC
Social Cost of Carbon
SCR
Selective Catalyst Reduction
SER
Small Entity Representation
SET
Supplemental Emission Test
SGDI
Stoichiometric Gasoline Direct Injection
SHEV
Strong Hybrid Vehicles
SI
Spark-Ignition
SIDI
Spark Ignition Direct Injection
SO2
Sulfur Dioxide
SOx
Sulfur Oxides
SOA
Secondary Organic Aerosol 
SOC
State of Charge
SOHC
Single Overhead Cam
SOX
Oxides of Sulfur
SPR
Strategic Petroleum Reserve
STB
Surface Transportation Board
Std.
Standard
STP
Scaled Tractive Power
SUV
Sport Utility Vehicle
SVOC
Semi-Volatile Organic Compound
SwRI
Southwest Research Institute
TAR
Technical Assessment Report
TC
Total Costs
TCp
Total Cost package
TDS
Turbocharging And Downsizing
THC
Total Hydrocarbon
TIAX
TIAX LLC
TMC
Technology & Maintenance Council
TOFC
Trailer-on-Flatcar
Ton-mile
One ton (2000 pounds) of payload over one mile
TPM
Tire Pressure Monitoring
TRBDS
Turbocharging and Downsizing
TRU
Trailer Refrigeration Unit
TSD
Technical Support Document
TSS
Thermal Storage
TTMA
Truck Trailer Manufacturers Association
TW
Test Weight
U/DAF
Upward and Downward Adjustment Factor
UCT
Urban Creep and Transient Duty Cycle
UFP
Ultra Fine Particles
URE
Unit Risk Estimate
USDA
United States Department of Agriculture
USGCRP
United States Global Change Research Program
UV
Ultraviolet
UV-b
Ultraviolet-b
VHHD
Vocational Heavy Heavy-Duty
VIN
Vehicle Identification Number
VIUS
Vehicle Inventory Use Survey
VLHD
Vocational Light Heavy-Duty
VMHD
Vocational Medium Heavy-Duty
VMT
Vehicle Miles Traveled
VOC
Volatile Organic Compound
VSL
Vehicle Speed Limiter
VTRIS
Vehicle Travel Information System
VVL
Variable Valve Lift
VVT
Variable Valve Timing
WACAP
Western Airborne Contaminants Assessment Project
WBS
Wide Base Singles
WHR
Waste Heat Recovery
WHTC
World Harmonized Transient Cycle
WHVC
World Harmonized Vehicle Cycle
WRF
Weather Research Forecasting
WTP
Willingness-to-Pay
WTVC
World Wide Transient Vehicle Cycle
WVU
West Virginia University



















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Executive Summary
The Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA), on behalf of the Department of Transportation, are each proposing changes to our comprehensive Heavy-Duty National Program that would further reduce greenhouse gas emissions (GHG) and increase fuel efficiency for on-road heavy-duty vehicles, responding to the President's directive on February 18, 2014, to take coordinated steps toward the production of even cleaner vehicles.  NHTSA's fuel consumption standards and EPA's carbon dioxide (CO2) emissions standards would be tailored to each of the three current regulatory categories of heavy-duty vehicles:  (1) Combination Tractors; (2) Heavy-duty Pickup Trucks and Vans; and (3) Vocational Vehicles, as well as gasoline and diesel heavy-duty engines.  In addition, the agencies would be adding new standards for combination trailers.  EPA's hydrofluorocarbon emissions standards that currently apply to air conditioning systems in tractors, pickup trucks, and vans, would also be applied to vocational vehicles.  
      Table 1 and Table 2 present the rule-related fuel savings, costs, benefits and net benefits in both present value terms and in annualized terms as calculated by NHTSA and EPA, respectively.  Table 3 presents the proposed rule's fully phased-in (MY 2027) numeric standards by vehicle (and engine) subcategory, along with the agencies' projected per vehicle incremental cost and incremental improvement in fuel efficiency and CO2 emissions. 
	For HD pickups and vans, the agencies are proposing performance-based standards under which, as for Phase 1, the average fuel consumption and CO2 emission rates required of a manufacturer depend on the mix of vehicles produced by the manufacturer for sale in the U.S.  For each vehicle, the agencies are again proposing to define the work factor as the sum of (a) 75% of the vehicle's maximum payload, 25% of the vehicles maximum towing capacity, and (c) 375 lbs. if the vehicle has four-wheel drive.  The agencies are further proposing that fuel consumption and CO2 emission rate targets will apply to each vehicle based on the vehicle's work factor and fuel type, and that the average fuel consumption and CO2 emission rates required of the manufacturer will be defined as the production-weighted average of these targets.  The proposed fuel consumption targets are linear functions defined by the slopes and intercepts shown below in Figure 1, Figure 2, and Table 4.


Table 1  NHTSA's Estimated 2018-2029 Model Year Lifetime Discounted Costs, 
Benefits, and Net Benefits using Method A and Relative to the More Dynamic Baseline and Assuming the 3% Discount Rate SCC Value[a]
(Billions of 2012 Dollars)
                  Lifetime Present Value  -  3% Discount Rate
Vehicle Program
                                    -$25.2
Maintenance
                                     -$1.1
Fuel Savings
                                    $170.1
Benefits
                                     $93.8
Net Benefits
                                     $238
                     Annualized Value  -  3% Discount Rate
Vehicle Program
                                     -$1.0
Maintenance
                                    -$0.04
Fuel Savings
                                     $6.7
Benefits
                                     $3.7
Net Benefits
                                     $9.4
                   Lifetime Present Value - 7% Discount Rate
Vehicle Program 
                                     -$17
Maintenance
                                     -$0.6
Fuel Savings
                                     $91.7
Benefits 
                                     $66.1
Net Benefits
                                     $140
                     Annualized Value  -  7% Discount Rate
Vehicle Program
                                     -$1.2
Maintenance
                                    -$0.04
Fuel Savings
                                     $6.7
Benefits
                                     $4.8
Net Benefits
                                     $10.2
      Notes:
          [a] For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline, 1b, please see Preamble Section X.A.1


Table 2  EPA's Estimated 2018-2029 Model Year Lifetime Discounted Costs, 
Benefits, and Net Benefits using Method B and Relative to the Less Dynamic Baseline and Assuming the 3% Discount Rate SCC Value[a]
(Billions of 2012 Dollars)
                Lifetime Present Value[c]  -  3% Discount Rate
Vehicle Program
                                     -$25
Maintenance
                                     -$1.1
Fuel Savings
                                     $171
Benefits b
                                      $97
Net Benefits[d]
                                     $242
                   Annualized Value[e]  -  3% Discount Rate
Vehicle Program
                                     -$1.3
Maintenance
                                     -$0.1
Fuel Savings
                                     $8.7
Benefits b
                                     $4.9
Net Benefits[d]
                                     $12.3
                 Lifetime Present Value[c] - 7% Discount Rate
Vehicle Program 
                                     -$17
Maintenance
                                     -$0.6
Fuel Savings
                                      $90
Benefits [b]
                                      $65
Net Benefits[d]
                                     $138
                   Annualized Value[e]  -  7% Discount Rate
Vehicle Program
                                     -$1.3
Maintenance
                                     $0.0
Fuel Savings
                                     $7.3
Benefits b
                                     $4.2
Net Benefits[d]
                                     $10.1
          [a] For an explanation of analytical Methods A and B, please see Preamble Section I.D; for an explanation of the less dynamic baseline, 1a, and more dynamic baseline, 1b, please see Preamble Section X.A.1
          [b] EPA estimated the benefits associated with four different values of a one ton CO2 reduction (model average at 2.5% discount rate, 3%, and 5%; 95[th] percentile at 3%), which each increase over time.  For the purposes of this overview presentation of estimated costs and benefits, however, the benefits shown here use the marginal value deemed to be central by the interagency working group on this topic:  the model average at 3% discount rate, in 2012 dollars.  Chapter 8.5 provides a complete list of values for the 4 estimates. Note that 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 (SCC at 5, 3, and 2.5 percent) is used to calculate net present value of SCC for internal consistency.  Refer to Section Chapter 8.5 for more detail.
          [c] Present value is the total, aggregated amount that a series of monetized costs or benefits that occur over time is worth now (in year 2012 dollar terms), discounting future values to the present over the lifetime of each model year vehicle.
          [d] Net benefits reflect the fuel savings plus benefits minus costs.
          [e] The annualized value is the constant annual value through a 30 year lifetime whose summed present value equals the present value from which it was derived. Annualized SCC values are calculated using the same rate as that used to determine the SCC value, while all other costs and benefits are annualized at either 3% or 7%.
Table 3  Summary of Proposed 2027 Standards Including Average Per Vehicle Costs and Projected Improvement
Regulatory Subcategory
CO2 Grams per Ton-Mile (for engines, CO2 Grams per Brake Horsepower-Hour; for hd puv, grams per mile)
Fuel Consumption gallon per 1,000 ton-mile (for engines, gallons per 100 Brake Horsepower-Hour; for hd puv, gallons per 100 miles)
Average Incremental Cost per Vehicle or Engine Relative to Phase 1 Costs in  Model Year 2027 a
Average Percent Fuel Consumption and CO2 Improvement in MY 2027 Relative to MY 2017
Tractors
Class 7 Low Roof Day Cab
                                      87
                                    8.5462
                                    $10,140
                                      19%
Class 7 Mid Roof Day Cab
                                      96
                                    9.4303
                                    $10,140
                                      19%
Class 7 High Roof Day Cab
                                      96
                                    9.4303
                                    $10,099
                                      21%
Class 8 Low Roof Day Cab
                                      70
                                    6.8762
                                    $10,204
                                      19%
Class 8 Mid Roof Day Cab
                                      76
                                    7.4656
                                    $10,204
                                      18%
Class 8 High Roof Day Cab
                                      76
                                    7.4656
                                    $10,209
                                      20%
Class 8 Low Roof Sleeper Cab
                                      62
                                    6.0904
                                    $12,744
                                      22%
Class 8 Mid Roof Sleeper Cab
                                      69
                                    6.7780
                                    $12,744
                                      21%
Class 8 High Roof Sleeper Cab
                                      67
                                    6.5815
                                    $12,842
                                      24%
Trailers
Long Dry Box Trailer
                                      77
                                    7.5639
                                    $1,409
                                      8%
Short Dry Box Trailer
                                      140
                                    13.7525
                                    $1,280
                                      7%
Long Refrigerated Box Trailer
                                      80
                                    7.8585
                                    $1,253
                                      5%
Short Refrigerated Box Trailer
                                      144
                                    14.1454
                                    $1,253
                                      5%
Notes:
[a]  Engine costs are included in average vehicle costs.
Table 3 (cont.) Summary of Proposed 2027 Standards Including Average Per Vehicle Costs and Projected Improvement
Regulatory Subcategory
CO2 Grams per Ton-Mile (for engines, CO2 Grams per Brake Horsepower-Hour; for hd puv, grams per mile)
Fuel Consumption gallon per 1,000 ton-mile (for engines, gallons per 100 Brake Horsepower-Hour; for hd puv, gallons per 100 miles)
Average Incremental Cost per Vehicle or Engine Relative to Phase 1 Costs in  Model Year 2027 [a] 
Average Percent Fuel Consumption and CO2 Improvement in MY 2027 Relative to MY 2017
Vocational Diesel
LHD Urban
                                      272
                                    26.7191
                                    $3,489
                                      16%
LHD Multi-Purpose
                                      280
                                    27.5049
                                    $3,490
                                      16%
LHD Regional
                                      292
                                    28.6837
                                    $1,407
                                      16%
MHD Urban
                                      172
                                    16.8959
                                    $4,696
                                      16%
MHD Multi-Purpose
                                      174
                                    17.0923
                                    $4,696
                                      16%
MHD Regional
                                      170
                                    16.6994
                                    $1,395
                                      16%
HHD Urban
                                      182
                                    17.8782
                                    $7,422
                                      16%
HHD Multi-Purpose
                                      183
                                    17.9764
                                    $7,422
                                      16%
HHD Regional
                                      174
                                    17.0923
                                    $4,682
                                      16%
Vocational Gasoline
LHD Urban
                                      299
                                    33.6446
                                    $3,086
                                      12%
LHD Multi-Purpose
                                      308
                                    34.6574
                                    $3,087
                                      12%
LHD Regional
                                      321
                                    36.1202
                                    $1,004
                                      12%
MHD Urban
                                      189
                                    21.2670
                                    $4,327
                                      13%
MHD Multi-Purpose
                                      191
                                    21.4921
                                    $4,327
                                      13%
MHD Regional
                                      187
                                    21.0420
                                    $1,026
                                      13%
HHD Urban
                                      196
                                    22.0547
                                    $7,053
                                      12%
HHD Multi-Purpose
                                      198
                                    22.2797
                                    $7,053
                                      12%
HHD Regional
                                      188
                                    21.1545
                                    $4,313
                                      12%
Diesel Engines[a]
LHD Vocational
                                      553
                                    5.4322
                                     $471
                                      4%
MHD Vocational
                                      553
                                    5.4322
                                     $437
                                      4%
HHD Vocational
                                      533
                                    5.2358
                                     $437
                                      4%
MHD Tractor
                                      466
                                    4.5776
                                    $1,698
                                      4%
HHD Tractor
                                      441
                                    4.3320
                                    $1,698
                                      4%
Class 2b and 3 HD Pickups and Vans[b]
HD Pickup and Van
                                      458
                                    4.8608
                                    $1,357
                                      18%
Notes:
[a]  Engine costs are included in average vehicle costs.  Costs shown for diesel engines are not additive to vehicle costs.
[b] For HD pickups and vans, Table 3 shows results for MY2029, assuming continuation of proposed MY2027 standard.



Figure 1  EPA Proposed CO2 Target Standards and NHTSA Proposed Fuel Consumption Target Standards for Diesel HD Pickups and Vans

Figure 2  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 1.  
Table 4.  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
                                                                      0.0004086
                                                                          3.143
                                                                           2021
                                                                         0.0406
                                                                            312
                                                                      0.0003988
                                                                          3.065
                                                                           2022
                                                                         0.0395
                                                                            304
                                                                      0.0003880
                                                                          2.986
                                                                           2023
                                                                         0.0386
                                                                            297
                                                                      0.0003792
                                                                          2.917
                                                                           2024
                                                                         0.0376
                                                                            289
                                                                      0.0003694
                                                                          2.839
                                                                           2025
                                                                         0.0367
                                                                            282
                                                                      0.0003605
                                                                          2.770
                                                                           2026
                                                                         0.0357
                                                                            275
                                                                      0.0003507
                                                                          2.701
                                                                 2027 and later
                                                                         0.0348
                                                                            268
                                                                      0.0003418
                                                                          2.633
                               Gasoline Vehicles
Model Year
                                                                              a
                                                                              b
                                                                              c
                                                                              d
                                                                    2018-2020 a
                                                                          0.044
                                                                            339
                                                                      0.0004951
                                                                          3.815
                                                                           2021
                                                                         0.0429
                                                                            331
                                                                      0.0004827
                                                                          3.725
                                                                           2022
                                                                         0.0418
                                                                            322
                                                                      0.0004703
                                                                          3.623
                                                                           2023
                                                                         0.0408
                                                                            314
                                                                      0.0004591
                                                                          3.533
                                                                           2024
                                                                         0.0398
                                                                            306
                                                                      0.0004478
                                                                          3.443
                                                                           2025
                                                                         0.0388
                                                                            299
                                                                      0.0004366
                                                                          3.364
                                                                           2026
                                                                         0.0378
                                                                            291
                                                                      0.0004253
                                                                          3.274
                                                                 2027 and later
                                                                         0.0369
                                                                            284
                                                                      0.0004152
                                                                          3.196
      Note[:]
      [a] Phase 1 primary phase-in coefficients.  Alternative phase-in coefficients are different in MY2018 only.
	This Draft Regulatory Impact Analysis (RIA) provides detailed supporting documentation to EPA and NHTSA joint proposal under each of their respective statutory authorities.  Because there are slightly different requirements and flexibilities in the two authorizing statutes, this Draft RIA provides documentation for the primary joint provisions as well as for provisions specific to each agency.
This RIA is generally organized to provide overall background information, methodologies, and data inputs, followed by results of the various technical and economic analyses.  A summary of each chapter of the RIA follows.   
Chapter 1:  Industry Characterization.  In order to assess the impacts of greenhouse gas (GHG) and fuel consumption regulations upon the affected industries, it is important to understand the nature of the industries impacted by the regulations.  The heavy-duty vehicle industries include the manufacturers of Class 2b through Class 8 trucks, engines, trailers and some other equipment.  Of these categories, trailers are the only industry that would be newly regulated under the proposed standards. This chapter provides market information for the trailer industry, as well as the variety of ownership patterns, for background purposes.  
Chapter 2:  Technology and Cost.  This chapter presents details of the vehicle and engine technologies and technology packages for reducing greenhouse gas emissions and fuel consumption.  These technologies and technology packages represent potential ways that the industry could meet the CO2 and fuel consumption stringency levels, and they provide the basis for the technology costs and effectiveness analyses.
Chapter 3:  Test Procedures.  Laboratory procedures to physically test engines, vehicles, and components are a crucial aspect of the heavy-duty vehicle GHG and fuel consumption program.  The rulemaking would establish some new test procedures for both engine and vehicle compliance and would revise existing procedures.  This chapter describes the relevant test procedures, including methodologies for assessing engine emission performance, the effects of aerodynamics and tire rolling resistance, as well as procedures for chassis dynamometer testing and their associated drive cycles.
Chapter 4:  Vehicle Simulation Model.  An important aspect of a regulatory program is its ability to accurately estimate the potential environmental benefits of heavy-duty truck technologies through testing and analysis.  Most large truck manufacturers employ various computer simulation methods to estimate truck efficiency for purposes of developing and refining their products.  Each method has advantages and disadvantages.  This section will focus on the use of a type truck simulation modeling that the agencies have developed specifically for assessing tailpipe GHG emissions and fuel consumption for purposes of this rulemaking.  The agencies are proposing to revise the existing simulation model -- the "Greenhouse gas Emissions Model (GEM)" -- as the primary tool to certify vocational vehicles, combination tractor, and combination trailers, Class 2b through Class 8 heavy-duty vehicles that are not heavy-duty pickups or vans) and discuss the model in this chapter.  
Chapter 5:  Impacts on Emissions and Fuel Consumption.  This program estimates anticipated impacts from the CO2 emission and fuel efficiency standards.  The agencies quantify fuel use and emissions from the GHGs carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O) and hydrofluorocarbons (HFCs).  In addition to reducing the emissions of greenhouse gases and fuel consumption, this program would also influence the emissions of "criteria" air pollutants, including carbon monoxide (CO), fine particulate matter (PM2.5) and sulfur dioxide (SOX) and the ozone precursors hydrocarbons (VOC) and oxides of nitrogen (NOX); and several air toxics (including benzene, 1,3-butadiene, formaldehyde, acetaldehyde, and acrolein), as described further in Chapter 5.
    The agencies used EPA's Motor Vehicle Emission Simulator (MOVES2014) to estimate downstream (tailpipe) emission impacts for combination tractors and vocational vehicles, and a spreadsheet model based on emission factors the "GREET" model to estimate upstream (fuel production and distribution) emission changes resulting from the decreased fuel.  For HD pickups and vans, the agencies used DOT's CAFE model to estimate manufacturer responses to the proposed standards.  NHTSA used the CAFE model to estimate emission impacts, and EPA used the CAFE model technology penetration outputs as an input to MOVES to calculate emission impacts.  Based on these analyses, the agencies estimate that this program would lead to 183.4 million metric tons (MMT) of CO2 equivalent (CO2EQ) of annual GHG reduction and 13.4 billion gallons of fuel savings in the year 2050, as discussed in more detail in Chapter 5.
Chapter 6:  Health and Environmental Impacts.  This chapter discusses the health effects associated with non-GHG pollutants, specifically: particulate matter, ozone, nitrogen oxides (NOX), sulfur oxides (SOX), carbon monoxide and air toxics.  These pollutants would not be directly regulated by the standards, but the standards would affect emissions of these pollutants and precursors.  Reductions in these pollutants are the co-benefits of the rulemaking (that is, benefits in addition to the benefits of reduced GHGs).  This chapter also discusses GHG-related impacts, such as changes in atmospheric CO2 concentrations, global mean temperature, sea level rise, and ocean pH associated with the program's GHG emissions reductions.
Chapter 7:  Vehicle-Related Costs of the Program.  In this chapter, the agencies present our estimate of the costs associated with the proposed program.  The presentation summarizes the costs associated with new technology expected to be added to meet the GHG and fuel consumption standards, including hardware costs to comply with the air conditioning (A/C) leakage program.  The analysis discussed in Chapter 7 provides our best estimates of incremental costs on a per truck basis and on an annual total basis.  We also present the fuel savings and maintenance costs in this chapter, along with a detailed payback analysis for various vehicle segments.
Chapter 8:  EPA's Economic and Other Impacts Analysis.  This chapter provides EPA's description of the net benefits of the proposed HD National Program.  To reach these conclusions, the chapter discusses each of the following aspects of the analyses of benefits:
Rebound Effect:  The VMT rebound effect refers to the fraction of fuel savings expected to result from an increase in fuel efficiency that is offset by additional vehicle use.  
Energy Security Impacts:  A reduction of U.S. petroleum imports reduces both financial and strategic risks associated with a potential disruption in supply or a spike in cost of a particular energy source.  This reduction in risk is a measure of improved U.S. energy security. 
Monetized CO2 Impacts:  The agencies estimate the monetized benefits of GHG reductions by assigning a dollar value to reductions in CO2 emissions using recent estimates of the social cost of carbon (SCC).  The SCC is an estimate of the monetized damages associated with an incremental increase in carbon emissions in a given year.  
Other Impacts:  There are other impacts associated with the GHG emissions and fuel efficiency standards.  Lower fuel consumption would, presumably, result in fewer gallons being refilled and, thus, less time spent refueling.  The increase in vehicle-miles driven due to a positive rebound effect may also increase the societal costs associated with traffic congestion, crashes, and noise.  However, if drivers drive those additional rebound miles, there must be a value to them which we estimate as the value of increased travel.  The agencies also discuss the impacts of safety standards and voluntary safety improvements on vehicle weight.
Chapter 8 also presents a summary of the total costs, total benefits, and net benefits expected under the program.  
Chapter 9:  NHTSA and EPA considered the potential safety impact of technologies that improve HD vehicle fuel efficiency and GHG emissions as part of the assessment of regulatory alternatives.  This chapter discusses the literature and research considered by the agencies, which included two National Academies of Science reports, an analysis of safety effects of HD pickups and vans using estimates from the DOT report on the effect of mass reduction and vehicle size on safety, and agency-sponsored safety testing and research..  
Chapter 10:  NHTSA CAFE Model.  This chapter describes NHTSA's CAFE modeling system.  The agencies used DOT's CAFE model to estimate manufacturer responses to the proposed standards for HD pickups and vans, and NHTSA also used the CAFE model to estimate emission impacts for this sector. 
Chapter 11:  Results of Preferred and Alternative Standards.  The heavy-duty truck segment is very complex.  The sector consists of a diverse group of impacted parties, including engine manufacturers, chassis manufacturers, truck manufacturers, trailer manufacturers, truck fleet owners and the public.  The agencies have largely designed this program to maximize the environmental and fuel savings benefits, taking into account the unique and varied nature of the regulated industries.  In developing this program, we considered a number of alternatives that could have resulted in fewer or potentially greater GHG and fuel consumption reductions than the program we are proposing.  Chapter 9 section summarizes the alternatives we considered.  
Chapter 12:  Small Business Flexibility Analysis.  This chapter describes the agencies' analysis of the small business impacts due to the joint program.  
Chapter 13:  Natural Gas Vehicles and Engines.  This chapter describes EPA's lifecycle analysis for natural gas used by the heavy-duty truck sector.  

