Tailpipe Rule - GlobalWarming.org
Tailpipe Rule - GlobalWarming.org
Tailpipe Rule - GlobalWarming.org
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Federal Register / Vol. 75, No. 88 / Friday, May 7, 2010 / <strong>Rule</strong>s and Regulations<br />
25341<br />
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for over-compliance with the California<br />
standards generated during model years<br />
2009 and perhaps 2010, where<br />
according to commenters the CAFE<br />
requirements were in effect more<br />
stringent than the California standards.<br />
EPA believes that early credits provide<br />
a valuable incentive for manufacturers<br />
that have implemented fuel efficient<br />
technologies in excess of their CAFE<br />
compliance obligations prior to MY<br />
2012. With appropriate restrictions,<br />
these credits, reflecting over-compliance<br />
over a three model year time frame (MY<br />
2009–2011) and not just over one or two<br />
model years, will be surplus reductions<br />
and not otherwise required by law.<br />
Therefore, EPA is finalizing these<br />
provisions largely as proposed, but in<br />
response to comments, with an<br />
additional restriction on the trading of<br />
MY 2009 credits. The overall structure<br />
of this early credit program addresses<br />
concerns about the potential for<br />
windfall credits in the first one or two<br />
model years. This issue is fully<br />
discussed in Section III.C.<br />
EPA is providing an additional<br />
temporary incentive to encourage the<br />
commercialization of advanced GHG/<br />
fuel economy control technologies—<br />
including electric vehicles (EVs), plugin<br />
hybrid electric vehicles (PHEVs), and<br />
fuel cell vehicles (FCVs)—for model<br />
years 2012–2016. EPA’s proposal<br />
included an emissions compliance<br />
value of zero grams/mile for EVs and<br />
FCVs, and the electric portion of PHEVs,<br />
and a multiplier in the range of 1.2 to<br />
2.0, so that each advanced technology<br />
vehicle would count as greater than one<br />
vehicle in a manufacturer’s fleetwide<br />
compliance calculation. EPA received<br />
many comments on the proposed<br />
incentives. Many State and<br />
environmental <strong>org</strong>anization commenters<br />
believed that the combination of these<br />
incentives could undermine the GHG<br />
benefits of the rule, and believed the<br />
emissions compliance values should<br />
take into account the net upstream GHG<br />
emissions associated with electrified<br />
vehicles compared to vehicles powered<br />
by petroleum based fuel. Auto<br />
manufacturers generally supported the<br />
incentives, some believing the<br />
incentives to be a critical part of the<br />
National Program. Most auto makers<br />
supported both the zero grams/mile<br />
emissions compliance value and the<br />
higher multipliers.<br />
Upon considering the public<br />
comments on this issue, EPA is<br />
finalizing an advanced technology<br />
vehicle incentive program that includes<br />
a zero gram/mile emissions compliance<br />
value for EVs and FCVs, and the electric<br />
portion of PHEVs, for up to the first<br />
200,000 EV/PHEV/FCV vehicles<br />
produced by a given manufacturer<br />
during MY 2012–2016 (for a<br />
manufacturer that produces less than<br />
25,000 EVs, PHEVs, and FCVs in MY<br />
2012), or for up to the first 300,000 EV/<br />
PHEV/FCV vehicles produced during<br />
MY 2012–2016 (for a manufacturer that<br />
produces 25,000 or more EVs, PHEVs,<br />
and FCVs in MY 2012). For any<br />
production greater than this amount, the<br />
compliance value for the vehicle will be<br />
greater than zero gram/mile, set at a<br />
level that reflects the vehicle’s net<br />
increase in upstream GHG emissions in<br />
comparison to the gasoline vehicle it<br />
replaces. In addition, EPA is not<br />
finalizing a multiplier. EPA will also<br />
allow this early advanced technology<br />
incentive program beginning in MYs<br />
2009–2011. The purpose of these<br />
provisions is to provide a temporary<br />
incentive to promote technologies<br />
which have the potential to produce<br />
very large GHG reductions in the future.<br />
The tailpipe GHG emissions from EVs,<br />
FCVs, and PHEVs operated on grid<br />
electricity are zero, and traditionally the<br />
emissions of the vehicle itself are all<br />
that EPA takes into account for purposes<br />
of compliance with standards set under<br />
section 202(a). This has not raised any<br />
issues for criteria pollutants, as<br />
upstream emissions associated with<br />
production and distribution of the fuel<br />
are addressed by comprehensive<br />
regulatory programs focused on the<br />
upstream sources of those emissions. At<br />
this time, however, there is no such<br />
comprehensive program addressing<br />
upstream emissions of GHGs, and the<br />
upstream GHG emissions associated<br />
with production and distribution of<br />
electricity are higher than the<br />
corresponding upstream GHG emissions<br />
of gasoline or other petroleum based<br />
fuels. In the future, vehicle fleet<br />
electrification combined with advances<br />
in low-carbon technology in the<br />
electricity sector have the potential to<br />
transform the transportation sector’s<br />
contribution to the country’s GHG<br />
emissions. EPA will reassess the issue of<br />
how to address EVs, PHEVs, and FCVs<br />
in rulemakings for model years 2017<br />
and beyond, based on the status of<br />
advanced vehicle technology<br />
commercialization, the status of<br />
upstream GHG control programs, and<br />
other relevant factors. Further<br />
discussion of the temporary advanced<br />
technology vehicle incentives, including<br />
more detail on the public comments and<br />
EPA’s response, is found in Section<br />
III.C.<br />
EPA is also providing an option for<br />
manufacturers to generate credits for<br />
employing new and innovative<br />
technologies that achieve GHG<br />
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reductions that are not reflected on<br />
current test procedures, as proposed.<br />
Examples of such ‘‘off-cycle’’<br />
technologies might include solar panels<br />
on hybrids, adaptive cruise control, and<br />
active aerodynamics, among other<br />
technologies. These three credit<br />
provisions are discussed in more detail<br />
in Section III.<br />
5. Coordinated Compliance<br />
Previous NHTSA and EPA regulations<br />
and statutory provisions establish ample<br />
examples on which to develop an<br />
effective compliance program that<br />
achieves the energy and environmental<br />
benefits from CAFE and motor vehicle<br />
GHG standards. NHTSA and EPA have<br />
developed a program that recognizes,<br />
and replicates as closely as possible, the<br />
compliance protocols associated with<br />
the existing CAA Tier 2 vehicle<br />
emission standards, and with CAFE<br />
standards. The certification, testing,<br />
reporting, and associated compliance<br />
activities closely track current practices<br />
and are thus familiar to manufacturers.<br />
EPA already oversees testing, collects<br />
and processes test data, and performs<br />
calculations to determine compliance<br />
with both CAFE and CAA standards.<br />
Under this coordinated approach, the<br />
compliance mechanisms for both<br />
programs are consistent and nonduplicative.<br />
EPA will also apply the<br />
CAA authorities applicable to its<br />
separate in-use requirements in this<br />
program.<br />
The compliance approach allows<br />
manufacturers to satisfy the new<br />
program requirements in the same<br />
general way they comply with existing<br />
applicable CAA and CAFE<br />
requirements. Manufacturers would<br />
demonstrate compliance on a fleetaverage<br />
basis at the end of each model<br />
year, allowing model-level testing to<br />
continue throughout the year as is the<br />
current practice for CAFE<br />
determinations. The compliance<br />
program design establishes a single set<br />
of manufacturer reporting requirements<br />
and relies on a single set of underlying<br />
data. This approach still allows each<br />
agency to assess compliance with its<br />
respective program under its respective<br />
statutory authority.<br />
NHTSA and EPA do not anticipate<br />
any significant noncompliance under<br />
the National Program. However, failure<br />
to meet the fleet average standards (after<br />
credit opportunities are exhausted)<br />
would ultimately result in the potential<br />
for penalties under both EPCA and the<br />
CAA. The CAA allows EPA<br />
considerable discretion in assessment of<br />
penalties. Penalties under the CAA are<br />
typically determined on a vehiclespecific<br />
basis by determining the