Determinations of Light-Duty Vehicle Alternative Greenhouse Gas Emissions Standards for Small Volume Manufacturers
| Published date | 01 July 2020 |
| Citation | 85 FR 39561 |
| Record Number | 2020-14099 |
| Section | Notices |
| Court | Environmental Protection Agency |
Federal Register, Volume 85 Issue 127 (Wednesday, July 1, 2020)
[Federal Register Volume 85, Number 127 (Wednesday, July 1, 2020)]
[Notices]
[Pages 39561-39564]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14099]
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ENVIRONMENTAL PROTECTION AGENCY
[EPA-HQ-OAR-2019-0210; FRL 10010-87-OAR]
Determinations of Light-Duty Vehicle Alternative Greenhouse Gas
Emissions Standards for Small Volume Manufacturers
AGENCY: Environmental Protection Agency (EPA).
ACTION: Notice.
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SUMMARY: The Environmental Protection Agency (EPA) is finalizing
determinations of light-duty vehicle greenhouse gas emissions
alternative standards for four small volume manufacturers: Aston
Martin, Ferrari, Lotus and McLaren. The alternative standards in these
determinations cover model years 2017-2021 and are established pursuant
to small volume manufacturer provisions in EPA's light-duty vehicle
greenhouse gas regulations.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2019-0210. All documents in the docket are
listed on the https://www.regulations.gov website. Although listed in
the index, some information is not publicly available, e.g., CBI or
other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
internet and will be publicly available only in hard copy form.
Publicly available docket materials are available electronically
through https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Christopher Lieske, Office of
Transportation and Air Quality, Assessment and Standards Division, U.S.
Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI
48105. Telephone: (734) 214-4584. Fax: (734) 214-4816. Email address:
[email protected].
SUPPLEMENTARY INFORMATION:
I. General Information
A. How can I get copies of this document and other related information?
EPA has established a docket for this action under Docket ID No.
EPA-HQ-OAR-2019-0210. Publicly available docket materials are available
either electronically through www.regulations.gov. Out of an abundance
of caution for members of the public and our staff, the EPA Docket
Center and Reading Room was closed to public visitors on March 31,
2020, to reduce the risk of transmitting COVID-19. Our Docket Center
staff will continue to provide remote customer service via email,
phone, and webform. For further information on EPA Docket Center
services and the current status, please visit us online at https://www.epa.gov/dockets.
B. Electronic Access
You may access this Federal Register document electronically from
the Government Printing Office under the ``Federal Register'' listings
at FDSys. (http://www.gpo.gov/fdsys/browse/collection.action?collectionCode=FR).
II. Background
The EPA's light-duty vehicle greenhouse gas (GHG) program for model
years (MYs) 2012-2016 provided a conditional exemption for small volume
manufacturers (SVMs) with annual U.S. sales of less than 5,000 vehicles
due to unique feasibility issues faced by these SVMs.\1\ The exemption
was conditioned on the manufacturer making a good faith effort to
obtain credits from larger volume manufacturers. For the MY 2017-2025
light-duty vehicle GHG program, EPA proposed, took public comment on,
and in 2012 finalized specific regulations allowing SVMs to petition
EPA for alternative standards, again recognizing that the primary
program standards may not be feasible for SVMs and could drive these
manufacturers from the U.S. market.\2\ EPA acknowledged in the 2012
final rule that SVMs may face a greater challenge in meeting
CO2 standards compared to large manufacturers because they
only produce a few vehicle models, mostly focused on high performance
sports cars and luxury vehicles. SVMs have limited product lines across
which to average emissions, and the few vehicles they produce often
have very high CO2 levels on a per vehicle basis. EPA also
noted that the total U.S. annual vehicle sales of SVMs are much less
than 1 percent of total sales of all manufacturers and contribute
minimally to total vehicular GHG emissions, and foregone GHG reductions
from SVMs likewise are a small percentage of total industry-wide
reductions. EPA received only supportive public comments on allowing
alternative standards for SVMs, including from SVMs, their trade
associations, and dealers.\3\ EPA adopted a regulatory pathway for SVMs
to apply for alternative GHG emissions standards for MYs 2017 and
later, based on information provided by each SVM on factors such as
technical feasibility, cost, and lead time. \4\
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\1\ 75 FR 25419-25421, May 7, 2010.
\2\ 77 FR 62789-62795, October 15, 2012.
\3\ Docket No. EPA-HQ-OAR-2010-0799
\4\ 40 CFR 86.1818-12(g).
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The regulations established in the 2012 rule outline eligibility
criteria and a framework for establishing SVM alternative standards.
Manufacturer average annual U.S. sales must remain below 5,000 vehicles
to be eligible for SVM alternative standards.\5\ The regulations
specify the requirements for supporting technical data and information
that a manufacturer must submit to EPA as part of its application.\6\
The regulations specify that an SVM applying for an alternative
standard provide the following technical information:
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\5\ 40 CFR 86.1818-12(g)(1).
\6\ 40 CFR 86.1818-12(g)(4).
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The CO2 reduction technologies employed by the
manufacturer on each vehicle model, or projected to be employed,
including information regarding the cost and CO2-reducing
effectiveness. Include technologies that improve air conditioning
efficiency and reduce air conditioning system leakage, and any ``off-
cycle'' technologies that potentially provide benefits outside the
operation represented by the Federal Test Procedure (FTP) and the
Highway Fuel Economy Test (HFET).
An evaluation of comparable models from other
manufacturers, including CO2 results and air conditioning
credits generated by the models.
A discussion of the CO2-reducing technologies
employed on vehicles offered outside of the U.S. market but not
available in the U.S., including a discussion as to why those vehicles
and/or technologies are not being used to achieve CO2
reductions for vehicles in the U.S. market.
An evaluation, at a minimum, of the technologies projected
by the EPA in a final rulemaking as those technologies likely to be
used to meet greenhouse gas emission standards and the extent to which
those technologies are employed or projected to be employed by the
manufacturer.
The most stringent CO2 level estimated to be
feasible for each model, in each model year, and the technological
basis for this estimate.
For each model year, a projection of the lowest feasible
sales-weighted fleet
[[Page 39562]]
average CO2 value, separately for passenger automobiles and
light trucks, and an explanation demonstrating that these projections
are reasonable.
A copy of any application, data, and related information
submitted to the National Highway Traffic Safety Administration (NHTSA)
in support of a request for alternative Corporate Average Fuel Economy
standards filed under 49 CFR part 525.
SVMs may apply for alternative standards for up to five model years
at a time. The GHG standards that EPA establishes for MY 2017 may
optionally be met by the manufacturers in MYs 2015-2016.\7\ SVMs may
use the averaging, banking, and trading provisions to meet the
alternative standards, but may not trade credits to another
manufacturer.\8\ The process for approving an SVM application includes
a public comment period of 30 days after which EPA will issue a final
determination establishing alternative standards for the manufacturer,
as appropriate.\9\
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\7\ See 40 CFR 86.1818-12(g). Manufacturers may opt to comply
with their MY 2017 standard in MYs 2015 and 2016 retroactively in
lieu of the Temporary Leadtime Alternative Allowance Standards used
in these model years.
\8\ 40 CFR 86.1818-12(g)(6).
\9\ 40 CFR 86.1818-12(g)(5).
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SVMs applied for alternative standards due to continued concern
regarding their abilities to meet the primary program GHG standards.
Given that the current production MY for manufacturers is 2020, with MY
2021 starting soon, these alternative standards will provide immediate
relief for SVMs as authorized under the regulation. The GHG program
also allows for a 3-year carry-back provision, which is within the
timeframe of this notice and the MYs under consideration.
The Energy Policy and Conservation Act (EPCA), governing the
establishment of Corporate Average Fuel Economy (CAFE) standards,
contains separate small volume manufacturer alternative standards
provisions that are administered by the National Highway Traffic Safety
Administration (NHTSA) independent of EPA's SVM alternative standards
provisions.\10\ Under EPCA's CAFE provisions, SVMs meeting the CAFE
eligibility criteria may petition NHTSA for less stringent alternative
CAFE standards. Manufacturers generally are also able to pay fines in
lieu of meeting the CAFE standards, which is not an option in EPA's GHG
program under the Clean Air Act. While eligible SVMs may apply for
alternative standards under the CAFE program, and some of the SVMs
covered by this decision document have applied for alternative CAFE
standards, as of May 4, 2020, none of those SVMs have been granted
alternative CAFE standards for MYs 2017-2021.\11\
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\10\ 49 U.S.C. 32902(d). Implementing regulations may be found
in 49 CFR part 525. EISA limits eligibility to manufacturers with
worldwide production of fewer than 10,000 passenger cars.
\11\ See https://one.nhtsa.gov/cafe_pic/CAFE_PIC_Mfr_LIVE.html
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III. Manufacturer Requested GHG Standards
The EPA received applications for SVM alternative standards from
four manufacturers: Aston Martin, Ferrari, Lotus and McLaren.\12\ Each
manufacturer provided an application to EPA that contained confidential
business information (CBI). Each manufacturer also provided a public
version of its application with the CBI removed, which EPA placed in
the public docket established for this proceeding. As part of their
applications, the SVMs requested specific alternative GHG standards for
five model years starting with MY 2017 based on their unique projected
product mix. Table 1 below provides the standards requested by the
manufacturers.
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\12\ Ferrari was previously owned by Fiat Chrysler Automobiles
(FCA) and petitioned EPA for operationally independent status under
40 CFR 86.1838-01(d). In a separate decision EPA granted this status
to Ferrari starting with the 2012 model year, allowing Ferrari to be
treated as an SVM under EPA's GHG program. Ferrari has since become
an independent company and is no longer owned by FCA.
Table 1--Manufacturer Requested GHG Standards (g/mile)
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Manufacturer MY 2017 * MY 2018 MY 2019 MY 2020 MY 2021
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Aston Martin.................... 431 396 380 374 376
Ferrari......................... 421 408 395 386 377
Lotus........................... 361 361 344 341 308
McLaren......................... 372 372 368 360 334
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*Manufacturers may optionally meet MY 2017 standards in MYs 2015-2016 (40 CFR 86.1818-12(g).
In November 2017, subsequent to submitting a request for SVM
alternative standards, Lotus was acquired by Zhejiang Geely Holding
Group (Geely) which also owns Volvo Car Company. Under the SVM
regulations regarding eligibility,\13\ Lotus remains eligible for
alternative standards for MY 2017. However, it is possible that Lotus
will no longer be eligible for SVM standards starting in MY 2018 as
Lotus may exceed the 5,000 vehicles eligibility threshold under the
aggregation provisions of the regulations, based upon sales volume
figures and other information provided by the manufacturer. While EPA
is establishing alternative standards for Lotus through MY 2021, in
order to use the alternative standards for MYs 2018-2021 Lotus would
need to either demonstrate that they remain eligible for SVM
alternative standards under the aggregation provisions or apply and be
granted operational independence status.\14\ EPA is not including any
determination of SVM eligibility for Lotus for MY 2018 and beyond in
this SVM alternative standards determination notice.
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\13\ 40 CFR 86.1818-12(g)(1)(i).
\14\ 40 CFR 86.1838-01(d).
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The regulations require SVMs to submit information, including cost
information, to EPA as part of their applications, as detailed above.
Each SVM provided its technical basis for the requested standards
including a discussion of technologies that could and could not be
feasibly applied to their vehicles in the time frame of the standards.
As noted above, the non-CBI information provided by the SVMs is
included in the docket for this proceeding. However, much of the data
and information provided by the manufacturers regarding future vehicles
and technology projections is claimed as CBI and not included in the
public versions of the applications.\15\
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\15\ For more information about how EPA addresses claims of
Confidential Business Information, see 40 CFR part 2, subpart B.
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IV. EPA Determinations of SVM Alternative Standards
On July 31, 2019, EPA issued proposed determinations of SVM
alternative standards, including background information and EPA's
[[Page 39563]]
assessment of the proposed standards, and requested public comment.\16\
As discussed below, EPA is finalizing the SVM alternative standard
determinations as proposed. EPA received only supportive comments
concerning the proposed alternative standards and no commenter
suggested any adjustment to the proposed standard levels. EPA has also
placed a Response to Comments document in the docket for this
proceeding.\17\
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\16\ 84 FR 37277.
\17\ ``Determinations of Light-duty Vehicle Alternative
Greenhouse Gas Emissions Standards for Small Volume Manufacturers:
Response to Comments,'' EPA-420-R-20-009, June 2020.
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For the first four model years of the program, MYs 2017-2020, EPA
proposed and is adopting the alternative standards requested by the
SVMs. These model years are completed or underway and therefore lead-
time is a primary consideration. Based on the lack of lead-time
available for these model years and EPA's review of the manufacturers'
submissions and assessment of the capability of each product and its
associated technology adoption, EPA believes this approach is
appropriate for MYs 2017-2020.
For MY 2021, EPA considered the levels requested by the
manufacturers and compared them to levels each SVM would achieve under
an approach where the manufacturers achieved year-over-year reductions
from their MY 2017 baseline through MY 2021, analogous to the overall
declining fleetwide standards in the primary program. The primary
program standards for passenger cars are equivalent to approximately
five percent year-over-year improvements. Although the regulations do
not mandate a specific year-over-year percent reduction for SVMs, EPA
considered an approach based on a minimum level of steady improvement
of three percent year-over-year emissions reduction from each SVM's
baseline CO2 levels. This pace of change is not as
aggressive as the annual improvement in the passenger car standards in
the primary program for these model years, but EPA believes it
represents a reasonable minimum pace of meaningful improvements for
SVMs under the SVM alternative standards regulatory provisions, given
the SVMs' limited product lines and limited ability to average among
high and low emitting vehicle models. Historically, EPA has set
standards designed to reduce emissions while providing vehicle
manufacturers compliance flexibility through averaging. Table 2 below
provides the projected CO2 levels for each manufacturer
based on three percent annual improvements, using MY 2017 as the
baseline or starting model year.
Table 2--Three Percent Annual Improvement from MY 2017 Baseline (g/mile)
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Model year Aston Martin Ferrari Lotus McLaren
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2017 Baseline................................... 431 421 361 372
2018............................................ 418 408 350 361
2019............................................ 406 396 340 350
2020............................................ 393 384 329 340
2021............................................ 382 373 320 329
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Table 3 below compares the levels projected for MY 2021 under the
three percent per year reductions with the levels requested by the
manufacturers. For Aston Martin and Lotus, their requested standards
for MY 2021 are more stringent than the levels represented by the three
percent year-over-year reductions, as shown in Table 3. EPA believes
that the requested MY 2021 standards for Aston Martin and Lotus are
appropriate, and, as proposed, is finalizing the requested alternative
standards with no adjustment.
For Ferrari and McLaren, EPA proposed and is finalizing MY 2021
standards reflecting the 3 percent year-over-year reductions shown in
Table 3 below. This approach requires Ferrari and McLaren to achieve a
MY 2021 standard that is minimally more stringent than that requested
by the manufacturers. The differences are small, 5 g/mile or less, and
based on EPA's review of the information provided by the manufacturers,
EPA believes this additional emissions reduction can be achieved
through the use of credits, including air conditioning and off-cycle
credits, and the use of program flexibilities including credit carry-
forward and credit carry-back within the lead-time available. As
discussed above and in the proposal, EPA believes that MY 2021
standards based on 3 percent year-over-year reductions represent
reasonable progress over time for SVMs and a reasonable balance between
the program goal of GHG reductions and the degree of challenge the
standards pose to SVMs, based on EPA's assessment of the information,
including cost information, provided to the agency.
Table 3--Comparison of Three Percent per Year Reductions with SVM's Projections for MY 2021 (g/mile)
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Aston Martin Aston Martin 3% Ferrari McLaren
Model year requested per year requested Ferrari 3% per Lotus requested Lotus 3% per requested McLaren 3% per
standards reduction standards year reduction standards year reduction standards year reduction
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2021 * 376 382 377 * 373 * 308 320 334 * 329
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*Indicates final standard.
As discussed in the notice of proposed determinations, EPA
recognizes that the three percent annual improvement approach for SVM
alternative standards for MY 2021 described above differs from the
approach for the primary program for MY 2021 in the Safer Affordable
Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger
Cars and Light Trucks rulemaking.\18\ However, the SVM alternative
standards for MY 2021 remain significantly less stringent than the
primary program standards as revised by the SAFE
[[Page 39564]]
Vehicles rulemaking and represent significant relief for the SVMs.
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\18\ Proposed rulemaking, 83 FR 42986 (August 24, 2018); Final
rule, 85 FR 24174 (April 30, 2020).
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V. Summary of Final Alternative SVM Standards
A summary of the case-by-case alternative SVM standards and
associated per-manufacturer GHG reductions is provided in Table 4 of
this document. As discussed above, the MY 2017-2020 standards for all
four SVMs are the manufacturers' requested alternative standards due to
lead time concerns. For Aston Martin and Lotus, the MY 2021 standards
also are their requested standards. For Lotus, the MY 2018-2021
standards are conditional based on its ability to either demonstrate
that it remains eligible for SVM alternative standards under the
program's aggregation provisions or apply and be granted operational
independence status, as discussed in Section III above. For Ferrari and
McLaren, the MY 2021 standards are based on three percent year-over-
year reductions from their respective MY 2017 baselines.
Table 4--Summary of Standards and Per-Manufacturer GHG Reductions (g/mile)
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Aston Martin Ferrari Lotus McLaren
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MY 2017......................................... 431 421 361 372
MY 2018......................................... 396 408 361 372
MY 2019......................................... 380 395 344 368
MY 2020......................................... 374 386 341 360
MY 2021......................................... 376 373 308 329
g/mile Reduction................................ 55 48 53 43
% Reduction (MY2017 to MY2021).................. 12.8% 11.4% 14.7% 11.6%
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Andrew Wheeler,
Administrator.
[FR Doc. 2020-14099 Filed 6-30-20; 8:45 am]
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