UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

NATIONAL VEHICLE AND FUEL EMISSIONS LABORATORY

2000 TRAVERWOOD DRIVE

ANN ARBOR, MI  48105-2498

									     OFFICE OF

									AIR AND RADIATION

November 23, 2016

MEMORANDUM

SUBJECT:  Analysis Supporting Statements in Proposed Determination
Section V.B

FROM:   Jeff Alson, Office of Transportation and Air Quality

TO:  EPA Docket # EPA-HQ-OAR-2015-0827

This Memorandum to the Docket provides greater analytical detail for
three topics addressed in Section V.B of the Proposed Determination
document.

Projected MY2025 GHG Standard Represents an Approximate 50% Reduction
from MY2011 GHG Level

There were no GHG standards in effect for MY2011. The U.S. Department of
Transportation National Highway Traffic Safety Administration (NHTSA)
reports that the average fleetwide CAFE standard in MY2011 was 27.4 mpg.
 Some manufacturers earned flexible fuel vehicle credits and paid civil
penalties in MY2011, neither of which reflect achieved GHG emissions
performance or will be relevant to GHG compliance in MY2025. In MY2011,
the delta between the NHTSA fleetwide CAFE performance value and the EPA
fleetwide 2-cycle city/highway fuel economy test value was 0.9 mpg.
Nearly all of this 0.9 mpg delta reflects the impact of flexible fuel
vehicle credits. Accounting for the much smaller impact of paid civil
penalties, EPA projects that the achieved GHG-equivalent fuel economy
standard level in MY2011 was approximately 1.0 mpg less, or about 26.4
mpg. Dividing this 26.4 mpg value into 8887 grams of CO2 per mile leads
to an equivalent fleetwide GHG emissions level of 337 grams/mile. The
projected MY2025 standard level of 173 grams/mile from the Proposed
Determination analysis reflects a 49% reduction from the MY2011 level of
337 grams/mile. 

Projected Cumulative GHG Emissions Savings for MY 2012-2025 of About 6
Billion Metric Tons

  In the 2012 final rulemaking, EPA projected that the MY2012-2025
standards would reduce cumulative GHG emissions by 5.9 billion metric
tons, over the lifetimes of all vehicles sold in MY2012-2025, relative
to a 2011 baseline. Two major changes have occurred that could affect
this original projection. One, EPA now projects a slightly higher GHG
standard in MY2025 (173 grams/mile rather than 163 grams/mile), which
would lower the aggregate GHG savings, other things being equal. Two,
consumers are buying a higher percentage of trucks than EPA assumed in
the original rulemaking analysis. If this latter change were made to the
assumed baseline for the original rulemaking analysis (i.e., if
consumers would be buying a higher percentage of trucks in the absence
of the standards), this would increase the aggregate GHG savings, other
things being equal. EPA has not repeated the analysis for MY2012-2025
vehicles with these changes. These two factors have directionally
opposing impacts on aggregate GHG savings, and in the absence of a
revised analysis the original estimate of 5.9 billion metric tons, or
about 6 billion metric tons, remains EPA’s best projection.

Derivation of Curves in Figure V.1

Figure V.1 shows three curves that address light-duty sector vehicle
plus upstream fuel GHG emissions (including vehicle GHG emissions from
the tailpipe and air conditioner operation, and upstream GHG emissions
from transportation fuel production and distribution) over the 2005-2050
timeframe.  

 

Figure V.1  Light-Duty Vehicle Plus Upstream Fuel GHG Emissions to 2050

The three curves are the same for 2005 through 2025. For the first
decade from 2005-2015, the light-duty sector vehicle plus upstream fuel
GHG values are generated by starting with the vehicle-only emissions as
reported in the formal EPA GHG emissions inventory, and then adding
transportation fuel production and distribution emissions.  Aggregate
GHG emissions decreased steadily throughout this decade.

For 2016-2025, the light-duty sector GHG values are projected by an
internal EPA spreadsheet model based on 1) the EPA National Program new
vehicle GHG emissions standards in the Proposed Determination, and 2)
vehicle sales, vehicle miles traveled (VMT), and fuels projections from
the Energy Information Administration (EIA).  Total light-duty GHG
emissions are projected to continue to decline over the coming decade.

The three curves begin to diverge beginning in 2026 based on different
assumptions about the post-2025 time frame.

The top curve in Figure V.1 is “Business-as-Usual” (BAU).  This
curve essentially assumes that there are no major changes in the
light-duty sector after 2025.  The National Program MY2025 GHG standard
in the Proposed Determination is assumed to continue, unchanged, out to
2050.  As with the 2016-2025 time frame, the curve uses EIA projections
for vehicle sales, VMT, and fuels.  Since EIA projections end in 2040,
EPA extrapolates to continue similar assumptions out to 2050.  Under
these assumptions, aggregate light-duty sector GHG emissions continue to
decrease out to 2035-2040 as new, lower-emitting, vehicles continue to
turn over the fleet, but start to slowly increase after that due to
increases in vehicle miles traveled after the fleet is largely turned
over.

The middle curve in Figure V.1 is “4.5% per year reduction.”  This
curve assumes, for illustrative purposes, that the nominal 4.5% annual
rate of GHG emissions reduction in the National Program light-duty
vehicle standards for MY2012-2025 is ultimately reflected in new
standards for MY2026-2050 as well.  Otherwise, EIA business-as-usual
projections are used for the post-2025 period. Under these assumptions,
aggregate GHG emissions continue to decrease significantly over time.

The bottom curve in Figure V.1 is “72% below 2010 in 2050.”  This
curve reflects a steady trajectory that results in a 2050 U.S.
light-duty subsector GHG emissions value that is 72% lower than the 2010
value. This 2050 value is consistent with the upper bound projection of
the range for global GHG emissions reductions in 2050 provided by the
Intergovernmental Panel on Climate Change to stabilize atmospheric GHG
concentrations around 450 ppm and as “likely” to limit global
temperature rise to below 2 C.

 CAFE Public Information Center Reports, U.S. Department of
Transportation, National Highway Traffic Safety Administration, last
updated on January 14, 2016, accessed at
https://skynet.nhtsa.gov/cognos/cgi-bin/cognosisapi.dll.

 Light-Duty Automotive Technology, Carbon Dioxide Emissions, and Fuel
Economy Trends: 1975 Through 2016, Table 9.1, page 121, U.S.
Environmental Protection Agency, EPA-420-R-16-010, November 2016,
accessed at www.epa.gov/fuel-economy/trends-report.

 Final Rulemaking for 2017-2025 Light-Duty Vehicle Greenhouse Gas
Emission Standards and Corporate Average Fuel Economy Standards,
Regulatory Impact Analysis, EPA-420-R-12-016, Table 7.4-2, page 7-32,
U.E. Environmental Protection Agency, August 2012, accessed at
https://nepis.epa.gov/Exe/ZyPDF.cgi/P100EZI1.PDF?Dockey=P100EZI1.PDF.

 2016 Annual Energy Outlook, Energy Information Administration,
September 2016, http://www.eia.gov/forecasts/aeo/.

 Climate Change 2014, Synthesis Report, Summary for Policymakers,
Intergovernmental Panel on Climate Change Fifth Assessment Report.

