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

Federal Register, Volume 80 Issue 133 (Monday, July 13, 2015)

Federal Register Volume 80, Number 133 (Monday, July 13, 2015)

Proposed Rules

Pages 40137-40765

From the Federal Register Online via the Government Publishing Office www.gpo.gov

FR Doc No: 2015-15500

Page 40137

Vol. 80

Monday,

No. 133

July 13, 2015

Part II

Environmental Protection Agency

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40 CFR Parts 9, 22, 85, et al.

Department of Transportation

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National Highway Traffic Safety Administration

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49 CFR Parts 512, 523, 534, et al.

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

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 9, 22, 85, 86, 600, 1033, 1036, 1037, 1039, 1042, 1043, 1065, 1066, and 1068

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Parts 512, 523, 534, 535, 537, and 538

EPA-HQ-OAR-2014-0827; NHTSA-2014-0132; FRL-9927-21-OAR

RIN 2060-AS16; RIN 2127-AL52

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

AGENCY: Environmental Protection Agency (EPA) and Department of Transportation (DOT) National Highway Traffic Safety Administration (NHTSA)

ACTION: Proposed rule.

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SUMMARY: EPA and NHTSA, on behalf of the Department of Transportation, are each proposing rules to establish a comprehensive Phase 2 Heavy-

Duty (HD) 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) emission standards are tailored to each of four regulatory categories of heavy-duty vehicles: Combination tractors; trailers used in combination with those tractors; heavy-duty pickup trucks and vans; and 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 differences 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 on all aspects of this proposal must be received on or before September 11, 2015. Under the Paperwork Reduction Act (PRA), comments on the information collection provisions are best assured of consideration if the Office of Management and Budget (OMB) receives a copy of your comments on or before August 12, 2015.

EPA and NHTSA will announce the public hearing dates and locations for this proposal in a supplemental Federal Register document.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-

OAR-2014-0827 (for EPA's docket) and NHTSA-2014-0132 (for NHTSA's docket) by one of the following methods:

Online: www.regulations.gov: Follow the on-line instructions for submitting comments.

Email: a-and-r-docket@epa.gov.

Mail:

EPA: Air and Radiation Docket and Information Center, Environmental Protection Agency, Mail code: 28221T, 1200 Pennsylvania Ave. NW., Washington, DC 20460.

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.

Hand Delivery:

EPA: EPA Docket Center, EPA WJC West Building, Room 3334, 1301 Constitution Ave. NW., Washington, DC 20460. Such deliveries are only accepted during the Docket's normal hours of operation, and special arrangements should be made for deliveries of boxed information.

NHTSA: West Building, Ground Floor, Rm. W12-140, 1200 New Jersey Avenue SE., Washington, DC 20590, between 9 a.m. and 4 p.m. Eastern Time, Monday through Friday, except Federal holidays.

Instructions: EPA and NHTSA have established dockets for this action under Direct your comments to Docket ID No. EPA-HQ-OAR-2014-0827 and/or NHTSA-2014-0132, respectively. See the SUPPLEMENTARY INFORMATION section on ``Public Participation'' for more information about submitting written comments.

Docket: 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: Air and Radiation Docket and Information Center, EPA Docket Center, EPA/DC, EPA WJC West Building, 1301 Constitution Ave. NW., 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

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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: For hearing information or to register, please contact: JoNell Iffland, Office of Transportation and Air Quality, Assessment and Standards Division (ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; Telephone number: (734) 214-4454; Fax number: (734) 214-4816; Email address: iffland.jonell@epa.gov. For all other information related to the rule, please contact: 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:

1. 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 lbs 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:

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   Examples of potentially

   Category NAICS code \a\ affected entities

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   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

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   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.

2. Public Participation

   EPA and NHTSA request comment on all aspects of this joint proposed rule. This section describes how you can participate in this process.

   (1) How do I prepare and submit comments?

   In this joint proposal, there are many issues common to both EPA's and NHTSA's proposals. For the convenience of all parties, comments submitted to the EPA docket will be considered comments submitted to the NHTSA docket, and vice versa. An exception is that comments submitted to the NHTSA docket on NHTSA's Draft Environmental Impact Statement (EIS) will not be considered submitted to the EPA docket. Therefore, the public only needs to submit comments to either one of the two agency dockets, although they may submit comments to both if they so choose. Comments that are submitted for consideration by one agency should be identified as such, and comments that are submitted for consideration by both agencies should be identified as such. Absent such identification, each agency will exercise its best judgment to determine whether a comment is submitted on its proposal.

   Further instructions for submitting comments to either EPA or NHTSA docket are described below.

   EPA: Direct your comments to Docket ID No. EPA-HQ-OAR-2014-0827. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov, including any personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Do not submit information that you consider to be CBI or otherwise protected through www.regulations.gov or email. The www.regulations.gov Web site is an ``anonymous access'' system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an email comment directly to EPA without going through www.regulations.gov your email address will be automatically captured and included as part of the comment that is placed in the public docket and made available on the Internet. If you submit an electronic comment, EPA recommends that you include your

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   name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to technical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. Electronic files should avoid the use of special characters, any form of encryption, and be free of any defects or viruses. For additional information about EPA's public docket visit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm.

   NHTSA: Your comments must be written and in English. To ensure that your comments are correctly filed in the Docket, please include the Docket number NHTSA-2014-0132 in your comments. Your comments must not be more than 15 pages long.\1\ NHTSA established this limit to encourage you to write your primary comments in a concise fashion. However, you may attach necessary additional documents to your comments, and there is no limit on the length of the attachments. If you are submitting comments electronically as a PDF (Adobe) file, we ask that the documents submitted be scanned using the Optical Character Recognition (OCR) process, thus allowing the agencies to search and copy certain portions of your submissions.\2\ Please note that pursuant to the Data Quality Act, in order for the substantive data to be relied upon and used by the agency, it must meet the information quality standards set forth in the OMB and Department of Transportation (DOT) Data Quality Act guidelines. Accordingly, we encourage you to consult the guidelines in preparing your comments. OMB's guidelines may be accessed at http://www.whitehouse.gov/omb/fedreg/reproducible.html. DOT's guidelines may be accessed at http://www.dot.gov/dataquality.htm.

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   \1\ See 49 CFR 553.21.

   \2\ Optical character recognition (OCR) is the process of converting an image of text, such as a scanned paper document or electronic fax file, into computer-editable text.

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   (2) Tips for Preparing Your Comments

   When submitting comments, please remember to:

   Identify the rulemaking by docket number and other identifying information (subject heading, Federal Register date and page number).

   Explain why you agree or disagree, suggest alternatives, and substitute language for your requested changes.

   Describe any assumptions and provide any technical information and/or data that you used.

   If you estimate potential costs or burdens, explain how you arrived at your estimate in sufficient detail to allow for it to be reproduced.

   Provide specific examples to illustrate your concerns, and suggest alternatives.

   Explain your views as clearly as possible, avoiding the use of profanity or personal threats.

   Make sure to submit your comments by the comment period deadline identified in the DATES section above.

   (3) How can I be sure that my comments were received?

   NHTSA: If you submit your comments by mail and wish Docket Management to notify you upon its receipt of your comments, enclose a self-addressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will return the postcard by mail.

   (4) How do I submit confidential business information?

   Any confidential business information (CBI) submitted to one of the agencies will also be available to the other agency. However, as with all public comments, any CBI information only needs to be submitted to either one of the agencies' dockets and it will be available to the other. Following are specific instructions for submitting CBI to either agency. If you have any questions about CBI or the procedures for claiming CBI, please consult the persons identified in the FOR FURTHER INFORMATION CONTACT section.

   EPA: Do not submit CBI to EPA through www.regulations.gov or email. Clearly mark the part or all of the information that you claim to be CBI. For CBI information in a disk or CD ROM that you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify electronically within the disk or CD ROM the specific information that is claimed as CBI. Information not marked as CBI will be included in the public docket without prior notice. In addition to one complete version of the comment that includes information claimed as CBI, a copy of the comment that does not contain the information claimed as CBI must be submitted for inclusion in the public docket. Information so marked will not be disclosed except in accordance with procedures set forth in 40 CFR part 2.

   NHTSA: If you wish to submit any information under a claim of confidentiality, you should submit three copies of your complete submission, including the information you claim to be confidential business information, to the Chief Counsel, NHTSA, at the address given above under FOR FURTHER INFORMATION CONTACT. When you send a comment containing confidential business information, you should include a cover letter setting forth the information specified in our confidential business information regulation.\3\

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   \3\ See 49 CFR part 512.

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   In addition, you should submit a copy from which you have deleted the claimed confidential business information to the Docket by one of the methods set forth above.

   (5) How can I read the comments submitted by other people?

   You may read the materials placed in the docket for this document (e.g., the comments submitted in response to this document by other interested persons) at any time by going to http://www.regulations.gov. Follow the online instructions for accessing the dockets. You may also read the materials at the EPA Docket Center or NHTSA Docket Management Facility by going to the street addresses given above under ADDRESSES.

   (6) How do I participate in the public hearings?

   EPA and NHTSA will announce the public hearing dates and locations for this proposal in a supplemental Federal Register document. At all hearings, both agencies will accept comments on the rulemaking, and NHTSA will also accept comments on the EIS.

   If you would like to present testimony at the public hearings, we ask that you notify EPA and NHTSA contact persons listed in the FOR FURTHER INFORMATION CONTACT section at least ten days before the hearing. Once EPA and NHTSA learn how many people have registered to speak at the public hearing, we will allocate an appropriate amount of time to each participant. For planning purposes, each speaker should anticipate speaking for approximately ten minutes, although we may need to adjust the time for each speaker if there is a large turnout. We suggest that you bring copies of your statement or other material for EPA and NHTSA panels. It would also be helpful if you send us a copy of your statement or other materials before the hearing. To accommodate as many speakers as possible, we prefer that speakers not use technological aids (e.g., audio-visuals, computer slideshows). However, if you plan to do so, you must notify the contact persons in the FOR FURTHER INFORMATION CONTACT section above. You also must make arrangements to provide your presentation or any other

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   aids to EPA and NHTSA in advance of the hearing in order to facilitate set-up. In addition, we will reserve a block of time for anyone else in the audience who wants to give testimony. The agencies will assume that comments made at the hearings are directed to the proposed rule unless commenters specifically reference NHTSA's EIS in oral or written testimony.

   The hearing will be held at a site accessible to individuals with disabilities. Individuals who require accommodations such as sign language interpreters should contact the persons listed under FOR FURTHER INFORMATION CONTACT section above no later than ten days before the date of the hearing.

   EPA and NHTSA will conduct the hearing informally, and technical rules of evidence will not apply. We will arrange for a written transcript of the hearing and keep the official record of the hearing open for 30 days to allow you to submit supplementary information. You may make arrangements for copies of the transcript directly with the court reporter.

3. Did EPA conduct a peer review before issuing this notice?

   This regulatory action is supported by influential scientific information. Therefore, EPA conducted 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 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). The peer review report and the agency's response to the peer review comments are available in Docket ID No. EPA-HQ-OAR-2014-0827.

4. Executive Summary

   (1) Commitment to Greenhouse Gas Emission Reductions and Vehicle Fuel Efficiency

   As part of the Climate Action Plan announced in June 2013,\4\ 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 EPA and NHTSA 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.5 6 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.

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   \4\ The White House, The President's Climate Action Plan (June, 2013). http://www.whitehouse.gov/share/climate-action-plan.

   \5\ The White House, Improving the Fuel Efficiency of American Trucks--Bolstering Energy Security, Cutting Carbon Pollution, Saving Money and Supporting Manufacturing Innovation (Feb. 2014), 2.

   \6\ U.S. Environmental Protection Agency. 2014. Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2012. EPA 430-R-14-

   003. Mobile sources emitted 28 percent of all U.S. GHG emissions in 2012. Available at http://www.epa.gov/climatechange/Downloads/ghgemissions/US-GHG-Inventory-2014-Main-Text.pdf.

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   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.\7\ 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.\8\ 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.\9\

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   \7\ Id.

   \8\ Id.

   \9\ Id. at 3.

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   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.\10\ 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.\11\ 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.\12\ The Phase 1 program, as well as the many additional actions called for in the President's 2013 Climate Action Plan \13\ 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.

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   \10\ Id.

   \11\ Id.

   \12\ Id. at 4.

   \13\ The President's Climate Action Plan calls for GHG-cutting actions including, for example, reducing carbon emissions from power plants and curbing hydrofluorocarbon and methane emissions.

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   This proposal 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

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   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 proposed rule from all stakeholders--including through planned public hearings, written comments, and other opportunities for input.

   (2) 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.\14\

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   \14\ The proposed Phase 2 program would also include NHTSA recreational vehicle fuel efficiency standards.

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   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.\15\ 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. 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.

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   \15\ The White House, Improving the Fuel Efficiency of American Trucks--Bolstering Energy Security, Cutting Carbon Pollution, Saving Money and Supporting Manufacturing Innovation (Feb. 2014), 4.

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   (3) 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).

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   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 proposal 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 proposed rule, 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 Over the

   Lifetime of Model Years 2018-2029, Based on Analysis Method A \a\ \b\

   \c\

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

   3% 7%

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

   Fuel Reductions (billion gallons)....... 72-77

   GHG Reductions (MMT, CO2eq)............. 974-1034

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

   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)... 70.1-73.7 52.9-55.6

   Total Costs ($billion).................. 30.5-31.1 20.0-20.5

   Total Benefits ($billion)............... 261-276 156-165

   Net Benefits ($billion)................. 231-245 136-144

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

   Notes:

   \a\ For an explanation of analytical Methods A and B, please see Section

   I.D; for an explanation of the less dynamic baseline, 1a, and more

   dynamic baseline, 1b, please see Section X.A.1.

   \b\ 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.

   \c\ Benefits and net benefits (including those in the 7% discount rate

   column) 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 Annual

   Fuel and GHG Reductions, Program Costs, Benefits and Net Benefits in

   Calendar Years 2035 and 2050, Based on Analysis Method B \a\

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

   2035 2050

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

   Fuel Reductions (Billion Gallons)....... 9.3 13.4

   GHG Reduction (MMT, CO2eq).............. 127.1 183.4

   Vehicle Program Costs (including -$6.0 -$7.1

   Maintenance; Billions of 2012$)........

   Fuel Savings (Pre-Tax; Billions of $37.2 $57.5

   2012$).................................

   Benefits (Billions of 2012$)............ $20.5 $32.9

   Page 40144

   Net Benefits (Billions of 2012$)........ $51.7 $83.2

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

   Note:

   \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; values reflect the preferred alternative relative

   to the less dynamic baseline (a reference case that projects very

   little improvement in new vehicle fuel economy absent new standards.

   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, Based on Analysis Method B \a\

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

   MY 2021 MY 2024 MY 2027

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

   Maximum Vehicle Fuel Savings and

   Tailpipe GHG Reduction (%)

   Tractors..................... 13 20 24

   Trailers \b\................. 4 6 8

   Vocational Vehicles.......... 7 11 16

   Pickups/Vans................. 2.5 10 16

   Per Vehicle Cost ($) \c\ (%

   Increase in Typical Vehicle

   Price) \d\

   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%)

   Pickups/Vans................. $520 (1%) $950 (2%) $1,340 (3%)

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

   Notes:

   \a\ Note that the proposed EPA standards for some categories of box trailers begin in model year 2018; values

   reflect the preferred alternative relative to the less dynamic baseline (a reference case that projects very

   little improvement in new vehicle fuel economy absent new standards.

   \b\ All engine costs are included.

   \c\ For this table, we use a minimum 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, Based

   on Analysis Method B

   Payback occurs in the year shown; using 7% discounting

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

   Proposed

   standards

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

   Tractors/Trailers....................................... 2nd

   Vocational Vehicles..................................... 6th

   Pickups/Vans............................................ 3rd

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

   (4) Issues Addressed in This Proposed Rule

   This proposed rule 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 rules 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 Web sites 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

1. Does this action apply to me?

2. Public Participation

3. Did EPA conduct a peer review before issuing this notice?

4. Executive Summary

   I. Overview

1. Background

2. Summary of Phase 1 Program

3. Summary of the Proposed Phase 2 Standards and Requirements

4. Summary of the Costs and Benefits of the Proposed Rule

5. EPA and NHTSA Statutory Authorities

6. Other Issues

   II. Vehicle Simulation, Engine Standards and Test Procedures

1. Introduction and Summary of Phase 1 and Phase 2 Regulatory Structures

2. Phase 2 Proposed Regulatory Structure

3. Proposed Vehicle Simulation Model--Phase 2 GEM

4. Proposed Engine Test Procedures and Engine Standards

   III. Class 7 and 8 Combination Tractors

1. Summary of the Phase 1 Tractor Program

2. Overview of the Proposed Phase 2 Tractor Program

3. Proposed Phase 2 Tractor Standards

4. Feasibility of the Proposed Tractor Standards

5. Proposed Compliance Provisions for Tractors

6. Flexibility Provisions

   IV. Trailers

1. Summary of Trailer Consideration in Phase 1

2. The Trailer Industry

3. Proposed Phase 2 Trailer Standards

4. Feasibility of the Proposed Trailer Standards

5. Alternative Standards and Feasibility Considered

6. Trailer Standards: Compliance and Flexibilities

   V. Class 2b-8 Vocational Vehicles

1. Summary of Phase 1 Vocational Vehicle Standards

   Page 40145

2. Proposed Phase 2 Standards for Vocational Vehicles

3. Feasibility of the Proposed Vocational Vehicle Standards

4. Alternative Vocational Vehicle Standards Considered

5. Compliance Provisions for Vocational Vehicles

   VI. Heavy-Duty Pickups and Vans

1. Introduction and Summary of Phase 1 HD Pickup and Van Standards

2. Proposed HD Pickup and Van Standards

3. Feasibility of Pickup and Van Standards

4. DOT CAFE Model Analysis of the Regulatory Alternatives for HD Pickups and Vans

5. Compliance and Flexibility for HD Pickup and Van Standards

   VII. Aggregate GHG, Fuel Consumption, and Climate Impacts

1. What methodologies did the agencies use to project GHG emissions and fuel consumption impacts?

2. Analysis of Fuel Consumption and GHG Emissions Impacts Resulting From Proposed Standards and Alternative 4

3. What are the projected reductions in fuel consumption and GHG emissions?

   VIII. How will this proposed action impact non-GHG emissions and their associated effects?

1. Emissions Inventory Impacts

2. Health Effects of Non-GHG Pollutants

3. Environmental Effects of Non-GHG Pollutants

4. Air Quality Impacts of Non-GHG Pollutants

   IX. Economic and Other Impacts

1. Conceptual Framework

2. Vehicle-Related Costs Associated With the Program

3. Changes in Fuel Consumption and Expenditures

4. Maintenance Expenditures

5. Analysis of the Rebound Effect

6. Impact on Class Shifting, Fleet Turnover, and Sales

7. Monetized GHG Impacts

8. Monetized Non-GHG Health Impacts

   I. Energy Security Impacts

10. Other Impacts

11. Summary of Benefits and Costs

    L. Employment Impacts

13. Cost of Ownership and Payback Analysis

14. Safety Impacts

    X. Analysis of the Alternatives

1. What are the alternatives that the agencies considered?

2. How do these alternatives compare in overall fuel consumption and GHG emissions reductions and in benefits and costs?

   XI. Natural Gas Vehicles and Engines

1. Natural Gas Engine and Vehicle Technology

2. GHG Lifecycle Analysis for Natural Gas Vehicles

3. Projected Use of LNG and CNG

4. Natural Gas Emission Control Measures

5. Dimethyl Ether

   XII. Agencies' Response to Recommendations From the National Academy of Sciences

1. Overview

2. Major Findings and Recommendations of the NAS Phase 2 First Report

   XIII. Amendments to Phase 1 Standards

1. EPA Amendments

2. Other Compliance Provisions for NHTSA

   XIV. Other Proposed Regulatory Provisions

1. Proposed Amendments Related to Heavy-Duty Highway Engines and Vehicles

2. Amendments Affecting Gliders and Glider Kits

3. 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

4. Amendments to General Compliance Provisions in 40 CFR Part 1068

5. Amendments to Light-Duty Greenhouse Gas Program Requirements

6. Amendments to Highway and Nonroad Test Procedures and Certification Requirements

7. Amendments Related to Nonroad Diesel Engines in 40 CFR Part 1039

8. Amendments Related to Marine Diesel Engines in 40 CFR Parts 1042 and 1043

   I. Amendments Related to Locomotives in 40 CFR Part 1033

10. Miscellaneous EPA Amendments

11. 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

1. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

2. National Environmental Policy Act

3. Paperwork Reduction Act

4. Regulatory Flexibility Act

5. Unfunded Mandates Reform Act

6. Executive Order 13132: Federalism

7. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

8. 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

10. National Technology Transfer and Advancement Act and 1 CFR Part 51

11. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

    L. Endangered Species Act

    XVI. EPA and NHTSA Statutory Authorities

1. EPA

2. NHTSA

3. List of Subjects

   I. Overview

1. 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.\16\ 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 lbs, and the engines that power them, except for MDPVs.17 18

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

   \16\ 2017 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average Fuel Economy Standards; Final Rule, 77 FR 62623, October 15, 2012.

   \17\ The CAA defines heavy-duty as a truck, bus or other motor vehicles with a gross vehicle weight rating exceeding 6,000 lbs (CAA section 202(b)(3)). The term HD as used in this action refers to a subset of these vehicles and engines.

   \18\ The Energy Independence and Security Act of 2007 requires NHTSA to set standards for commercial medium- and heavy-duty on-

   highway vehicles, defined as on-highway vehicles with a GVWR of 10,000 lbs or more, and work trucks, defined as vehicles with a GVWR between 8,500 and 10,000 lbs and excluding medium duty passenger vehicles.

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

   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

   Page 40146

   many external stakeholders, in particular with vehicle OEMs and technology suppliers.\19\

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

   \19\ Vehicle chassis manufacturers are known in this industry as original equipment manufacturers or OEMs.

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

   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.

   (1) 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.\20\ 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.

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

   \20\ GVWR describes the maximum load that can be carried by a vehicle, including the weight of the vehicle itself. Heavy-duty vehicles (including those designed for primary purposes other than towing) also have a gross combined weight rating (GCWR), which describes the maximum load that the vehicle can haul, including the weight of a loaded trailer and the vehicle itself.

   Table I-1--Vehicle 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 >33,000

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

   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.\21\

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

   \21\ Class 2b vehicles manufactured as passenger vehicles (Medium Duty Passenger Vehicles, MDPVs) are covered by the light-

   duty GHG and fuel economy standards and therefore are not addressed in this rulemaking.

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

   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 lbs 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.

   (2) Related Regulatory and Non-Regulatory Programs

   (

   1. 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.

   (i) 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

   Page 40147

   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, and 5011-5012 (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.

   (ii) 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).\22\ 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.

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

   \22\ ``Endangerment and Cause or Contribute Findings for Greenhouse Gases Under Section 202(a) of the Clean Air Act,'' 74 FR 66496 (December 15, 2009) (``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 adverse health impacts. Children, the elderly, and the poor are among the most vulnerable to these climate-related health effects. See also 79 FR 75242 (December 17, 2014) (climate change, and temperature increases in particular, likely to increase O3 (Ozone) pollution ``over broad areas of the U.S., including the largest metropolitan areas with the worst O3 problems, increasing 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 (December 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

   Page 40148

   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.\23\ 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.'' \24\ What this means, as stated in another NRC assessment, is that:

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   \23\ National Research Council, Understanding Earth's Deep Past, p. 1

   \24\ Id., p.138.

   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.\25\

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   \25\ National Research Council, Climate Stabilization Targets, p. 3.

   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'' \26\ 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.

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

   \26\ U.S. Global Change Research Program, Climate Change Impacts in the United States: The Third National Climate Assessment, May 2014 Available at http://nca2014.globalchange.gov/.

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

   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.\27\ 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.\28\

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   \27\ ftp://aftp.cmdl.noaa.gov/products/trends/co2/co2_annmean_mlo.txt.

   \28\ http://www.esrl.noaa.gov/gmd/ccgg/trends/.

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   (b) 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 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).\29\ 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.

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   \29\ This is more broadly true for heavy-duty pickup trucks than vans because every manufacturer of heavy-duty pickup trucks also makes light-duty pickup trucks, while only some heavy-duty van manufacturers also make light-duty vans.

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   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 provide harmonized national standards.

   (c) 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

   Page 40149

   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.

   (d) 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.\30\ 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.\31\ 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 California's 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.\32\ 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).\33\ And, recently, California Governor Jerry Brown established a target of up to 50 percent petroleum reduction by 2030.

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   \30\ See http://www.arb.ca.gov/cc/cc.htm for details on the California Air Resources Board climate change actions, including a discussion of Assembly Bill 32, and the Climate Change Scoping Plan developed by CARB, which includes details regarding CARB's future goals for reducing GHG emissions from heavy-duty vehicles.

   \31\ See http://www.arb.ca.gov/msprog/truckstop/trailers/trailers.htm for a summary of CARB's ``Tractor-Trailer Greenhouse Gas Regulation''.

   \32\ See http://www.arb.ca.gov/regact/2013/hdghg2013/hdghg2013.htm for details regarding CARB's adoption of the Phase 1 standards.

   \33\ See http://www.arb.ca.gov/ba/fininfo.htm for detailed descriptions of CARB's mobile source incentive programs. Note that EPA works to support CARB's heavy-duty incentive programs through the West Coast Collaborative (http://westcoastcollaborative.org/) and the Clean Air Technology Initiative (http://www.epa.gov/region09/cleantech/).

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   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).\34\ 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.

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   \34\ See http://www.epa.gov/airquality/greenbk/index.html for more information on EPA's nonattainment designations.

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   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. While this section is focused on California's regulatory programs and air quality needs, EPA recognizes that other states and local areas are concerned about the challenges of reducing NOX and attaining, as well as maintaining, the ozone NAAQS (further discussed in Section VIII.D.1 below).

   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.\35\ 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.

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   \35\ See http://www.arb.ca.gov/regact/2013/hdghg2013/hdghg2013.htm for a description of the CARB optional reduced NOX emission standards for on-road heavy-duty engines.

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   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.\36\ 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 vehicles. 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.

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   \36\ See EPA's waiver of CARB's heavy-duty tractor-trailer greenhouse gas regulation applicable to new 2011 through 2013 model year Class 8 tractors equipped with integrated sleeper berths (sleeper-cab tractors) and 2011 and subsequent model year dry-can and refrigerated-van trailers that are pulled by such tractors on California highways at 79 FR 46256 (August 7, 2014).

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   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

   Page 40150

   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. When combined with the Phase 1 standards, the technologies the agencies are projecting to be used to meet the proposed GHG emission and fuel efficiency standards would be expected to reduce NOX emissions by over 450,000 tons in 2050 (see Section VIII).

   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.

   (e) 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.\37\ 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.

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   \37\ http://www.ijc.org/en_/Air_Quality__Agreement.

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   (f) Recommendations of the National Academy of Sciences

   In April 2010 as mandated by Congress in the Energy Independence and Security Act of 2007 (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.

2. Summary of Phase 1 Program

   (1) EPA Phase 1 GHG Emission Standards and NHTSA Phase 1 Fuel Consumption Standards

   The EPA 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. They also increase in stringency for MY 2017. 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

   Page 40151

   tractors, heavy-duty pickups and vans, and vocational vehicles--based on the relative degree of homogeneity among trucks within each category. The Phase 1 rule 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.

   (

   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 (an independent engine manufacturer) 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.\38\

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   \38\ We note although the standards' stringency is predicated on use of certain technologies, and the agencies' assessed the cost of the rule based on the cost of use of those technologies, the standards can be met by any means. Put another way, the rules create a performance standard, and do not mandate any particular means of achieving that level of performance.

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   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.

   (b) 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.\39\

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   \39\ EPA MOVES Model, http://www.epa.gov/otaq/models/moves/index.htm.

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   The majority of HD pickups and vans are \3/4\-ton and 1-ton pickup trucks, 12- and 15-passenger vans,\40\ 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 (i.e., incomplete vehicles that include complete or nearly complete cabs that are sold to secondary manufacturers). 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

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   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.

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   \40\ Note that 12-passenger vans are subject to the light-duty standards as medium-duty passenger vehicles (MDPVs) and are not subject to this proposal.

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   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), with separate curves for gasoline and diesel.\41\ 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.

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   \41\ As explained in Section XII, EPA is proposing to recodify the Phase 1 requirements for pickups and vans from 40 CFR 1037.104 into 40 CFR part 86, which is also the regulatory part that applies for light-duty vehicles.

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   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 (relative to pre-control baseline 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 (relative to pre-control baseline vehicles). Manufacturers demonstrate compliance based on entire vehicle chassis certification using the same duty cycles used to demonstrate compliance with criteria pollutant standards.

   (c) 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.\42\

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   \42\ EPA MOVES model, http://www.epa.gov/otaq/models/moves/index.htm.

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   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 lbs GVWR and below 26,001 lbs 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.

   (d) 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.\43\ 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.

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   \43\ See 76 FR 57114 explaining why NHTSA's authority under the Energy Independence and Safety Act includes authority to establish separate engine standards.

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   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 model's own 2011 MY baseline level.\44\

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   \44\ See 76 FR 57144.

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   Page 40153

   (e) 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 would 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.

   (2) 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 disbenefits from 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.\45\

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   \45\ Note: These calendar year benefits do not represent the same time frame as the model year lifetime benefits described above, so they are not additive.

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   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).

   (3) 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.\46\

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   \46\ NHTSA explained that it has greater flexibility in the HD program to include consideration of credits and other flexibilities in determining appropriate and feasible levels of stringency than it does in the light-duty CAFE program. Cf. 49 U.S.C. 32902(h), which applies to light-duty CAFE but not heavy-duty fuel efficiency under 49 U.S.C. 32902(k).

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   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.\47\ For the early credits and advanced technology credits, the agencies adopted a 1.5 x 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,

   Page 40154

   the Phase 1 rule does not restrict averaging or trading by averaging set in this instance.

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   \47\ Early credits are for engines and vehicles certified before EPA standards became mandatory, advanced technology credits are for hybrids and/or Rankine cycle engines, and innovative technology credits are for other technologies not in the 2010 fleet whose benefits are not reflected using the Phase 1 test procedures.

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   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 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.

   (4) 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.

   (5) Litigation on Phase 1 Rule

   The D.C. Circuit recently rejected all challenges to the agencies' Phase 1 regulations. The court did not reach the merits of the challenges, holding that none of the petitioners had standing to bring their actions, and that a challenge to NHTSA's denial of a rulemaking petition could only be brought in District Court. See Delta Construction Co. v. EPA, 783 F. 3d 1291 (D.C. Cir. 2015), U.S. App. LEXIS 6780, F.3d (D.C. Cir. April 24, 2015).

3. 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-advancing 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 agencies request comment on all aspects of our feasibility analysis including projections of feasible market adoption rates and technological effectiveness for each technology.

   The proposed Phase 2 standards would represent a more technology-

   forcing \48\ 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.

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   \48\ In this context, the term ``technology-forcing'' is used to distinguish standards that will effectively require manufacturers to develop new technologies (or to significantly improve technologies) from standards that can be met using off-the-shelf technology alone. Technology-forcing standards do not require manufacturers to use any specific technologies.

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   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.\49\ 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.

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   \49\ ``Prototype'' as it is used here refers to technologies that have a potentially production-feasible design that is expected to meet all performance, functional, reliability, safety, manufacturing, cost and other requirements and objectives that is being tested in laboratories and on highways under a full range of operating conditions, but is not yet available in production vehicles already for sale in the market.

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   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. Some industry stakeholders have informed EPA that when manufacturers introduced new emission control technologies (primarily diesel particulate filters) in response to the 2007 heavy-duty engine standards

   Page 40155

   they did not perform sufficient product development validation, which led to additional costs for operators when the technologies required repairs or other resulted in 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. Several of the heavy-duty vehicle manufacturers, fleets, and commercial truck dealerships informed the agencies 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 pull-ahead by several months planned future vehicle purchases by pre-buying vehicles without the newer technology. In the context of the Class 8 tractor market, where a relatively small number of large fleets typically purchase very large volumes of tractors, such actions by a small number of firms can result in large swings in sales volumes. Such market impacts 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 market impacts also can 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). A number of industry stakeholders have informed EPA that the 2007 EPA heavy-duty engine criteria pollutant standard resulted in this pull-ahead phenomenon for the Class 8 tractor market. The agencies understand the potential impact that a pull-ahead can have on American manufacturing and labor, dealerships, truck purchasers, and on the program's environmental and fuel savings goals, and have taken steps in the design of the proposed program to avoid such disruption. These steps include the following:

   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 2007 standard, 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 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. We note an important difference, however, between standards for criteria pollutants, with generally no attendant fuel savings, and the fuel consumption/GHG emission standards proposed today, which provide immediate and direct financial benefits to vehicle purchasers, who 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.

   As discussed in the Phase 1 final rule, NHTSA has certain statutory considerations to take into account when determining feasibility of the preferred alternative.\50\ 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.'' \51\ 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,\52\ which modify ``feasible'' beyond its plain meaning.

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   \50\ 75 FR 57198.

   \51\ 49 U.S.C. 32902(k).

   \52\ Id.

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   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.'' \53\

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   \53\ Center for Biological Diversity v. National Highway Traffic Safety Admin., 538 F.3d 1172, 1195 (9th Cir. 2008).

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   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 57129-57130). Section 202(a) also allows (although it does not compel) EPA to adopt technology-forcing standards. Id. at 57130.

   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 yet widely available, but believe that the thresholds proposed for consideration account for realistic projections of technological development discussed throughout this notice and in the draft RIA. 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 of costs and effectiveness.

   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

   Page 40156

   benefits of that option in the timeframe envisioned. We are seeking comment on these relative risks and benefits. 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. The agencies also note the possibility of adoption in MY 2024 of a standard reflecting deployment of some, rather than all, of the technologies on which Alternative 4 is predicated. It is also possible that the agencies could adopt some or all of the proposal (Alternative 3) earlier than MY 2027, but later than MY 2024, based especially on lead time considerations. Any such choices would involve a considered weighing of the issues of feasibility of projected technology penetration rates, associated costs, and necessary lead time, and would consider the information on available technologies, their level of performance and costs set out in the administrative record to this proposal.

   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 42 U.S.C. 7521(a)(1) and (2), and under 49 U.S.C. 32902(k).

   (1) 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).

   (

   1. Certification

      EPA and NHTSA 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.\54\ 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.

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      \54\ As described in Section IV, although the proposed trailer standards were developed using the simulation tool, the agencies are proposing a compliance structure that does not require trailer manufacturers to actually use the compliance tool.

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      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.

      EPA and NHTSA are also proposing to clarify provisions related to confirming a manufacturer's test data during certification (i.e., confirmatory testing) and verifying a manufacturer's vehicles are being produced to perform as described in the application for certification (i.e., selective enforcement audits or SEAs). The EPA confirmatory testing provisions for engines and vehicles are in 40 CFR 1036.235 and 1037.235. The SEA provisions are in 40 CFR 1036.301 and 1037.301. The NHTSA provisions are in 49 CFR 535.9(a). Note that these clarifications would also apply for Phase 1 engines and vehicles. The agencies welcome suggestions for alternative approaches that would offer the same degree of compliance assurance for GHGs and fuel consumption as these programs offer with respect to EPA's criteria pollutants.

      (b) 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 generally continue this Phase 1 approach with few revisions for vehicles regulated in Phase 1. As described in Section IV, we are proposing a more limited averaging program for trailers. The agencies see the ABT program as playing an important role in making the proposed technology-

      advancing 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 25412-25413. 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.\55\

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      \55\ See NRDC v. Thomas, 805 F. 2d 410, 425 (D.C. Cir. 1986) (upholding averaging as a reasonable and permissible means of implementing a statutory provision requiring technology-forcing standards).

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      (i) 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

      Page 40157

      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. 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.

      This is best understood by examining the way in which credits are calculated. For example, the credit equations in 40 CFR 1037.705 and 49 CFR 535.7 calculate credits as the product of the difference between the standard and the vehicle's emission level (g/ton-mile or gallon/

      1,000 ton-mile), the regulatory payload (tons), production volume, and regulatory useful life (miles). Phase 2 would not change payloads, production volumes, or useful lives for tractors, medium and heavy heavy-duty engines, or medium and heavy heavy-duty vocational vehicles. However, EPA is proposing to change the regulatory useful lives of HD pickups and vans, light heavy-duty vocational vehicles, spark-ignited engines, and light heavy-duty compression-ignition engines. Because useful life is a factor in determining the value of a credit, the agencies are proposing interim adjustment factors to ensure banked credits maintain their value in the transition from Phase 1 to Phase 2.

      For Phase 1, EPA aligned the useful life for GHG emissions with the useful life already in place for criteria pollutants. After the Phase 1 rules were finalized, EPA updated the useful life for criteria pollutants as part of the Tier 3 rulemaking.\56\ The new useful life implemented for Tier 3 is 150,000 miles or 15 years, whichever occurs first. This is the same useful life proposed in Phase 2 for HD pickups and vans, light heavy-duty vocational vehicles, spark-ignited engines, and light heavy-duty compression-ignition engines.\57\ The numerical value of the adjustment factor for each of these regulatory categories depends on the Phase 1 useful life. These are described in detail below in this preamble in Sections II, V, and VI. Without these adjustment factors the proposed changes 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 changes in the useful life. With the relatively flat deterioration generally associated with CO2, EPA does not believe the proposed changes in useful life would significantly affect the feasibility of the proposed Phase 2 standards. EPA requests comments on the proposed changes to useful life. 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.

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      \56\ 79 FR 23492, April 28, 2014 and 40 CFR 86.1805-17.

      \57\ NHTSA's useful life is based on mileage and years of duration.

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      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 that 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?

      (ii) Averaging Sets

      EPA has historically restricted averaging to some extent for its HD emission standards to avoid creating unfair competitive advantages or environmental risks due to credits being inconsistent. 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 under EPA's authority and maximum feasible under NHTSA's authority, respectively. 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

      Page 40158

      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.

      (iii) 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.

      (iv) 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.

      (c) 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. However, we are not proposing to apply this flexibility to trailers (which were not part of Phase 1) in order to simplify the program for trailer manufacturers.

      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.

      (d) 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.\58\ 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.

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      \58\ See Section I. F. (1) (a) for a summary of certain specific changes we are proposing or considering for natural gas-fueled engines and vehicles.

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      We are also proposing that the Phase 2 standards apply exclusively at the

      Page 40159

      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 51705 (August 24, 2012) and 77 FR 51500 (August 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 51500-51501; 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.\59\ Note that we also request comment on upstream emissions for natural gas in Section XI.

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

      \59\ See also Section I. C. (1) (b)(iv) above (soliciting comment on need for advanced technology incentive credits for heavy duty EVs).

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

      (e) 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.

      (f) In-Use Standards

      Section 202(a)(1) of the CAA specifies that EPA is to adopt emissions standards that are applicable for the useful life of the vehicle and for the engine. EPA finalized in-use standards for the Phase 1 program whereas NHTSA adopted an approach which does not include these standards. For the Phase 2 program, EPA will carry-over its in-use provisions and NHTSA proposes to adopt EPA's useful life requirements for its vehicle and engine fuel consumption standards to ensure manufacturers consider in the design process the need for fuel efficiency standards to apply for the same duration and mileage as EPA standards. If EPA determines a manufacturer fails to meet its in-use standards, civil penalties may be assessed. NHTSA seeks comment on the appropriateness of seeking civil penalties for failure to comply with its fuel efficiency standards in these instances. NHTSA would limit such penalties to situations in which it determined that the vehicle or engine manufacturer failed to comply with the standards.

      (2) 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.

      (

   1. 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.\60\ We are also proposing 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 a more limited use of waste exhaust heat recovery systems in 2027, projecting that about 10 percent of tractor engines will have turbo-compounding systems, and an additional 15 percent of tractor engines would employ Rankine-cycle waste heat recovery. We do not project that turbo-compounding or Rankine-cycle waste heat recovery technology will be utilized in vocational engines. 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.

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

      \60\ Phase 1 standards for diesel engines will be fully phased-

      in by MY 2017.

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

      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 vocational vehicle engines. Thus, we project that vocational gasoline engines would

      Page 40160

      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--Summary of Phase 1 and Proposed Phase 2 Requirements for Engines in Combination Tractors and

      Vocational Vehicles

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

      Alternative 3-2027 Alternative 4-2024 (also

      Phase 1 program (proposed standard) under consideration)

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

      Covered in this category......... Engines installed in tractors and vocational chassis.

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

      Share of HDV fuel consumption and Combination tractors and vocational vehicles account for approximately 85

      GHG emissions. percent of fuel use and GHG emissions in the medium and heavy duty truck

      sector.

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

      Per vehicle fuel consumption and 5%-9% improvement over MY 4% improvement over MY 2017 for diesel engines.

      CO2 improvement. 2010 baseline, depending Note that improvements are captured in complete

      vehicle application. vehicle tractor and vocational vehicle standards,

      Improvements are in so that engine improvements and the vehicle

      addition to improvements improvement shown below are not additive.

      from tractor and

      vocational vehicle

      standards.

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

      Form of the standard............. EPA: CO2 grams/horsepower-hour and NHTSA: Gallons of fuel/horsepower-hour.

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

      Example technology options Combustion, air handling, Further technology improvements and increased use

      available to help manufacturers friction and emissions of all Phase 1 technologies, plus waste heat

      meet standards. after-treatment recovery systems for tractor engines (e.g., turbo-

      technology improvements. compound and Rankine-cycle).

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

      Flexibilities.................... ABT program which allows Same as Phase 1, except no advanced technology

      emissions and fuel incentives.

      consumption credits to Adjustment factor of 1.36 proposed for credits

      be averaged, banked, or carried forward from Phase 1 to Phase 2 for SI

      traded (five year credit and LHD CI engines due to proposed change in

      life). Manufacturers useful life.

      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.

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

      (b) 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 \61\ (including some use of waste heat recovery systems)

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

      \61\ Although the agencies are proposing separate engine standards and separate engine certification, engine improvements would also be reflected in the vehicle certification process. Thus, it is appropriate to also consider engine improvements in the context of the vehicle standards.

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

      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.

      Page 40161

      Table I-3--Summary of Phase 1 and Proposed Phase 2 Requirements for Class 7 and Class 8 Combination Tractors

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

      Alternative 4--2024

      Phase 1 program Alternative 3--2027 (also under

      (proposed standard) consideration)

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

      Covered in this category......... Tractors that are designed to pull trailers and move freight.

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

      Share of HDV fuel consumption and Combination tractors and their engines account for approximately two thirds

      GHG emissions. of fuel use and GHG emissions in the medium and heavy duty truck sector.

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

      Per vehicle fuel consumption and 10%-23% improvement over 18%-24% improvement over MY 2017 standards.

      CO2 improvement. MY 2010 baseline,

      depending on tractor

      category. Improvements

      are in addition to

      improvements from engine

      standards.

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

      Form of the standard............. EPA: CO2 grams/ton payload mile and NHTSA: Gallons of fuel/1,000 ton payload

      mile.

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

      Example technology options Aerodynamic drag Further technology improvements and increased use

      available to help manufacturers improvements; low of all Phase 1 technologies, plus engine

      meet standards. rolling resistance improvements, improved and automated

      tires; high strength transmissions and axles, powertrain optimization,

      steel and aluminum tire inflation systems, and predictive cruise

      weight reduction; control (depending on tractor type).

      extended idle reduction;

      and speed limiters.

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

      Flexibilities.................... ABT program which allows Same as Phase 1, except no extra credits for

      emissions and fuel advanced technologies or early certification.

      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.

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

      (c) Summary of the Proposed Trailer Standards

      This proposed rule is 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--Summary of Proposed Phase 2 Requirements for Trailers

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

      Alternative 4--2024

      Phase 1 program Alternative 3--2027 (also under

      (proposed standard) 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 Trailers are modeled together with combination tractors and their engines.

      GHG emissions. 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 N/A...................... Between 3% and 8% improvement over MY 2017

      CO2 improvement. baseline, depending on the trailer type.

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

      Page 40162

      Form of the standard............. N/A...................... EPA: CO2 grams/ton payload mile and NHTSA: Gallons/

      1,000 ton payload mile.

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

      Example technology options N/A...................... Low rolling resistance tires, automatic tire

      available to help manufacturers inflation systems, weight reduction for most

      meet standards. 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.

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

      (d) 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 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--Summary of Phase 1 and Proposed Phase 2 Requirements for Vocational Vehicle Chassis

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

      Alternative 4--2024

      Phase 1 program Alternative 3--2027 (also under

      (proposed standard) 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 Vocational vehicles account for approximately 20 percent of fuel use and GHG

      GHG emissions. emissions in the medium and heavy duty truck sector categories.

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

      Per vehicle fuel consumption and 2% improvement over MY Up to 16% improvement over MY 2017 standards.

      CO2 improvement. 2010 baseline.

      Improvements are in

      addition to improvements

      from engine standards.

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

      Form of the standard............. EPA: CO2 grams/ton payload mile and NHTSA: Gallons of fuel/1,000 ton payload

      mile.

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

      Example technology options Low rolling resistance Further technology improvements and increased use

      available to help manufacturers tires. of Phase 1 technologies, plus improved engines,

      meet standards. transmissions and axles, powertrain optimization,

      weight reduction, hybrids, and workday idle

      reduction systems.

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

      Page 40163

      Flexibilities.................... ABT program which allows Same as Phase 1, except no advanced technology

      emissions and fuel incentives.

      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.

      ......................... 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. Adjustment

      factor of 1.36 proposed for credits carried

      forward from Phase 1 to Phase 2 due to proposed

      change in useful life.

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

      (e) 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 are based on 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--Summary of Phase 1 and Proposed Phase 2 Requirements for HD Pickups and Vans

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

      Alternative 4--2025

      Phase 1 program Alternative 3--2027 (also under

      (proposed standard) 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 HD pickups and vans account for approximately 15% of fuel use and GHG

      GHG emissions. emissions in the medium and heavy duty truck sector.

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

      Per vehicle fuel consumption and 15% improvement over MY 16% improvement over MY 2018-2020 standards.

      CO2 improvement. 2010 baseline for diesel

      vehicles, and 10%

      improvement for gasoline

      vehicles.

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

      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.

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

      Example technology options Engine improvements, Further technology improvements and increased use

      available to help manufacturers transmission of all Phase 1 technologies, plus engine stop-

      meet standards. improvements, start, and powertrain hybridization (mild and

      aerodynamic drag strong).

      improvements, low

      rolling resistance

      tires, weight reduction,

      and improved accessories.

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

      Page 40164

      Flexibilities.................... Two optional phase-in Proposed to be same as Phase 1, with phase-in

      schedules; ABT program schedule based on year-over-year increase in

      which allows emissions stringency. Adjustment factor of 1.25 proposed

      and fuel consumption for credits carried forward from Phase 1 to Phase

      credits to be averaged, 2 due to proposed change in useful life. Proposed

      banked, or traded (five cessation of advanced technology incentives in

      year credit life). 2021 and continuation of off-cycle credits.

      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.

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

      (f) Summary of the Proposed Final Numeric Standards by Regulatory Subcategory

      Table I-7 lists the proposed final (i.e., MY 2027) numeric standards by regulatory subcategory for tractors, trailers, vocational vehicles and engines. Note that these are the same final numeric standards for Alternative 4, but for Alternative 4 these would be implemented in MY 2024 instead of MY 2027.

      Table I-7--Proposed Final (MY 2027) Numeric Standards by Regulatory Subcategory

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

      CO2 grams per ton-mile Fuel consumption gallon

      (for engines CO2 grams per 1,000 ton-mile (for

      Regulatory subcategory per brake horsepower- engines gallons per 100

      hour) brake horsepower-hour)

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

      Tractors:.....................................................

      Class 7 Low Roof Day Cab.................................. 87 8.5462

      Class 7 Mid Roof Day Cab.................................. 96 9.4303

      Class 7 High Roof Day Cab................................. 96 9.4303

      Class 8 Low Roof Day Cab.................................. 70 6.8762

      Class 8 Mid Roof Day Cab.................................. 76 7.4656

      Class 8 High Roof Day Cab................................. 76 7.4656

      Class 8 Low Roof Sleeper Cab.............................. 62 6.0904

      Class 8 Mid Roof Sleeper Cab.............................. 69 6.7780

      Class 8 High Roof Sleeper Cab............................. 67 6.5815

      Trailers:

      Long Dry Box Trailer...................................... 77 7.5639

      Short Dry Box Trailer..................................... 140 13.7525

      Long Refrigerated Box Trailer............................. 80 7.8585

      Short Refrigerated Box Trailer............................ 144 14.1454

      Vocational Diesel:

      LHD Urban................................................. 272 26.7191

      LHD Multi-Purpose......................................... 280 27.5049

      LHD Regional.............................................. 292 28.6837

      MHD Urban................................................. 172 16.8959

      MHD Multi-Purpose......................................... 174 17.0923

      MHD Regional.............................................. 170 16.6994

      HHD Urban................................................. 182 17.8782

      HHD Multi-Purpose......................................... 183 17.9764

      HHD Regional.............................................. 174 17.0923

      Vocational Gasoline:

      LHD Urban................................................. 299 33.6446

      LHD Multi-Purpose......................................... 308 34.6574

      LHD Regional.............................................. 321 36.1202

      MHD Urban................................................. 189 21.2670

      MHD Multi-Purpose......................................... 191 21.4921

      MHD Regional.............................................. 187 21.0420

      HHD Urban................................................. 196 22.0547

      HHD Multi-Purpose......................................... 198 22.2797

      HHD Regional.............................................. 188 21.1545

      Diesel Engines:

      LHD Vocational............................................ 553 5.4322

      MHD Vocational............................................ 553 5.4322

      HHD Vocational............................................ 533 5.2358

      MHD Tractor............................................... 466 4.5776

      Page 40165

      HHD Tractor............................................... 441 4.3320

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

      Similar to Phase 1 the agencies are proposing for Phase 2 a set of continuous equation-based standards for HD pickups and vans. Please refer to Section 6, subsection B.1, for a description of these standards, including associated tables and figures.

4. 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 pickup 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.

   (1) 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 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.

   The agencies chose to analyze these two different baselines because 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

   Page 40166

   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. Purchasing decisions are not based exclusively on payback period, but also include the considerations discussed above and in Section X.A.1. For the baseline analysis, the agencies use payback period as a proxy for all of these considerations, and therefore the payback period for the baseline analysis is shorter than the payback period industry uses as a threshold for the further consideration of a technology. The agencies request comment on which alternative baseline scenarios would be most appropriate for analysis in the final rule. Specifically, the agencies request empirical evidence to support whether the agencies should use for the final rule the central cases used in this proposal, alternative sensitivity cases such as those mentioned below, or some other scenarios. See Section X.A.1of this Preamble and Chapter 11 of the draft RIA for a more detailed discussion of baselines.

   As part of a sensitivity analysis, additional baseline scenarios were also evaluated for HD pickups and vans, including baseline payback periods of 12, 18 and 24 months. See Section VI of this Preamble and Chapter 10 of the draft RIA for a detailed discussion of these additional scenarios.

   (2) 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-8 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. 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.

   Table I-8--Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for Model Years 2018-2029

   Vehicles Using Analysis Method A

   Billions of 2012$ \a\ \b\

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

   Alternative

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

   Category 3 Preferred 4

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

   7% Discount rate 3% Discount rate 7% Discount rate 3% Discount rate

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

   Fuel Reductions (Billion Gallons)....... 72.2-76.7

   81.9-86.7

   GHG reductions (MMT CO2 eq)............. 974-1,034

   1,102-1,166

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

   Vehicle Program: Technology and Indirect 25.0-25.4 16.8-17.1 32.9-34.3 22.5-23.5

   Costs, Normal Profit on Additional

   Investments............................

   Additional Routine Maintenance.......... 1.0-1.1 0.6-0.6 1.0-1.1 0.6-0.7

   Congestion, Accidents, and Noise from 4.5-4.7 2.6-2.8 4.7-4.9 2.7-2.8

   Increased Vehicle Use..................

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

   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 14.7-15.1 8.2-8.4 15.0-15.4 8.4-8.6

   Vehicle Use............................

   Reduced Climate Damages from GHG 32.9-34.9 32.9-34.9 37.3-39.4 37.3-39.4

   Emissions \c\..........................

   Reduced Health Damages from Non-GHG 37.2-38.8 20-20.7 40.9-42.5 22.1-22.8

   Emissions..............................

   Increased U.S. Energy Security.......... 8.1-8.9 4.3-4.7 9.3-10.2 5.0-5.5

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

   Total Benefits...................... 261-276 156-165 293-309 177-186

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

   Net Benefits.................... 231-245 136-144 255-269 151-159

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

   Notes:

   \a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less

   dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

   \b\ Range reflects two reference case assumptions 1a and 1b.

   \c\ Benefits and net benefits use the 3 percent global average SCC value applied only to CO2 emissions; GHG

   reductions include CO2, CH4, N2O and HFC reductions, and include benefits to other nations as well as the U.S.

   See Draft RIA Chapter 8.5 and Preamble Section IX.G for further discussion.

   Table I-9 shows benefits and cost from the perspective of reducing GHG.

   Page 40167

   Table I-9--Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for Model Years 2018-2029

   Vehicles Using Analysis Method B

   Billions of 2012$ \a\ \b\

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

   Alternative

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

   Category 3 Preferred 4

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

   7% Discount rate 3% Discount rate 7% Discount rate 3% Discount rate

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

   Fuel Reductions (Billion 70.2 to 75.8

   Gallons).

   79.7 to 85.4

   GHG reductions (MMT CO2eq)... 960 to 1,040

   1,090 to 1,160

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

   Vehicle Program (e.g., -$24.6 to -$25.1 -$16.3 to -$16.6 -$33.1 to -$33.5 -$22.2 to -$22.5

   technology and indirect

   costs, normal profit on

   additional investments).

   Additional Routine -$1.1 to -$1.1 -$0.6 to -$0.6 -$1.1 to -$1.1 -$0.6 to -$0.6

   Maintenance.

   Fuel Savings (valued at pre- $159 to $171 $84.2 to $90.1 $181 to $193 $96.5 to $103

   tax prices).

   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 -$4.2 to -$4.3 -$2.4 to -$2.4 -$4.2 to -$4.3 -$2.4 to -$2.4

   Noise from Increased Vehicle

   Use.

   Savings from Less Frequent $2.8 to $3.1 $1.4 to $1.6 $3.3 to $3.6 $1.7 to $1.9

   Refueling.

   Economic Benefits from $14.8 to $14.9 $8.2 to $8.2 $14.7 to $14.8 $8.1 to $8.1

   Additional Vehicle Use.

   Benefits from Reduced Non-GHG $37.4 to $39.7 $17.7 to $18.8 $41.2 to $43.5 $19.7 to $20.7

   Emissions \c\.

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

   Reduced Climate Damages from $31.6 to $34.0

   GHG Emissions \d\.

   $35.9 to $38.3

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

   Net Benefits............. $224 to $242 $128 to $138 $248 to $265 $142 to $152

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

   Notes:

   \a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less

   dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

   \b\ Range reflects two baseline assumptions 1a and 1b.

   \c\ Range reflects both the two baseline assumptions 1a and 1b using the mid-point of the low and high $/ton

   estimates for calculating benefits.

   \d\ 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-10 breaks down by vehicle category the benefits and costs for the proposed standards and Alternative 4 using the Method A analytical approach. For additional detail on per-vehicle break-downs of costs and benefits, please see Chapter 10.

   Table I-10--Per Vehicle Category Lifetime Fuel Savings, GHG Reductions, Benefits, Costs and Net Benefits for

   Model Years 2018-2029 Vehicles Using Analysis Method A (Billions of 2012$), Relative to Baseline 1b \a\

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

   Alternative

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

   Key costs and benefits by vehicle 3 Preferred 4

   category -----------------------------------------------------------------------

   7% Discount rate 3% Discount rate 7% Discount rate 3% Discount rate

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

   Tractors, Including Engines, and

   Trailers:..............................

   Fuel Reductions (Billion Gallons)... 56.1

   61.6

   GHG Reductions (MMT CO2 eq)......... 731.1

   803.1

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

   Total Costs..................... 15.2 10.0 17.7 11.9

   Total Benefits.................. 177.8 105.4 194.2 115.7

   Net Benefits.................... 162.6 95.4 176.5 103.9

   Vocational Vehicles, Including Engines:

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

   Fuel Reductions (Billion Gallons)... 8.3

   10.9

   GHG Reductions (MMT CO2 eq)......... 107.0

   139.8

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

   Total Costs..................... 9.5 6.1 12.8 8.4

   Total Benefits.................. 27.7 16.0 35.0 20.6

   Net Benefits.................... 18.1 9.9 22.1 12.1

   HD Pickups and Vans:

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

   Fuel Reductions (Billion Gallons)... 7.8

   9.3

   GHG Reductions (MMT CO2 eq)......... 94.1

   112.8

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

   Total Costs..................... 5.5 3.7 7.8 5.3

   Page 40168

   Total Benefits.................. 23.5 14.1 28.3 17.1

   Net Benefits.................... 18.0 10.5 20.4 11.9

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

   Notes:

   \a\ For an explanation of analytical Methods A and B, please see Section I.D; for an explanation of the less

   dynamic baseline, 1a, and more dynamic baseline, 1b, please see Section X.A.1.

   Table I-11--Per Vehicle Costs Relative to Baseline 1a

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

   3 Proposed standards 4

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

   MY 2021 MY 2024 MY 2027 MY 2021 MY 2024

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

   Per Vehicle Cost ($) \a\

   Tractors.................... $6,710 $9,940 $11,700 $10,200 $12,400

   Trailers.................... 900 1,010 1,170 1,080 1,230

   Vocational Vehicles......... 1,150 1,770 3,380 1,990 3,590

   Pickups/Vans................ 520 950 1,340 1,050 1,730

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

   Note:

   \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.

   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-12, and are similar for both Method A and Method B.

   Table I-12--Payback Periods for MY2027 Vehicles Under the Proposed

   Standards and for MY2024 Vehicles Under Alternative 4 Relative to

   Baseline 1a

   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

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

   (3) 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.\62\ The Clean Air Act requires that any air pollutant emission 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.

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   \62\ This EISA requirement applies to regulation of medium- and heavy-duty vehicles. For many years, and as reaffirmed by Congress in 2007, ``economic practicability'' has been among the factors EPCA requires NHTSA to consider when setting light-duty fuel economy standards at the (required) maximum feasible levels. NHTSA interprets ``economic practicability'' as a factor involving considerations broader than those likely to be involved in ``cost effectiveness''.

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

   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

   Page 40169

   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 (CO2 eq) 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.

5. 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.\63\

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

   \63\ 76 FR 57106--57129, September 15, 2011.

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

   (1) 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), and in CAA sections 202(d), 203-209, 216, and 301 (42 U.S.C. 7521 (a)(1) and (2), 7521(d), 7522-7543, 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 cert. granted by, in part Util. Air Regulatory Group v. EPA, 134 S. Ct. 418, 187 L. Ed. 2d 278, 2013 U.S. LEXIS 7380 (U.S., 2013), affirmed in part and reversed in part on unrelated grounds by Util. Air Regulatory Group v. EPA, 134 S. Ct. 2427, 189 L. Ed. 2d 372, 2014 U.S. LEXIS 4377 (U.S., 2014) (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 57129-57130.

   Page 40170

   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).\64\

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

   \64\ Indeed, an argument that a trailer is not a motor vehicle because, considered (artificially) as a separate piece of equipment it is not self-propelled, applies equally to the cab-chassis--the tractor. No entity has suggested that tractors are not motor vehicles; nor is such an argument plausible.

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

   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 ``complete 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 ``incomplete heavy- duty vehicle'' or ``incomplete 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.'' 65 66 67

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

   \65\ We note further, however, that certain hauled items, for example a boat, would not be considered to be a trailer under the proposal. See proposed section 1037.801, proposing to define ``trailer' as being ``designed for cargo and for being drawn by a tractor.''

   \66\ This concept is likewise reflected in the definition of ``tractor'' in the parallel Department of Transportation regulations: ``a truck designed primarily for drawing other motor vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and the load so drawn.'' See 49 CFR 571.3.

   \67\ EPA's proposed definition of ``vehicle'' in 40 CFR 1037.801 makes clear that an incomplete trailer becomes a vehicle (and thus subject to the prohibition against introduction into commerce without a certificate) when it has a frame with axles attached. Complete trailers are also vehicles.

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

   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 vehicle chassis likewise contribute to emissions (including contributing 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).\68\

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

   \68\ This argument applies equally to emissions of criteria pollutants, whose rate of emission is likewise affected by vehicle characteristics. It is for this reason that EPA's implementing rules for criteria pollutants from heavy duty vehicles and engines specify a test weight for certification testing, since that weight influences the amount of pollution emission.

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

   (2) 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.

   (

   1. Authority To Regulate Trailers

   As contemplated in the Phase 1 proposed and final rules, 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 proposed or final rules; that authority is described here.

   Page 40171

   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 lbs or more.'' A ``work truck'' is defined as a vehicle between 8,500 and 10,000 lbs 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.

   (b) 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.\69\ In the Phase 1 proposed rule, 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 proposed rule, they were not within the scope of the rulemaking and were excluded from NHTSA's standards.\70\ NHTSA expressed that it would address recreational vehicles in its next rulemaking.

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

   \69\ EPA did not give special consideration to recreational vehicles because the CAA applies to heavy-duty motor vehicle generally.

   \70\ Motor homes are still subject to EPA's Phase 1 CO2 standards for vocational vehicles.

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

   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 lbs 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 lbs or more.\71\ 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.

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

   \71\ 49 U.S.C. 32901(a)(7).

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

   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.\72\

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   \72\ NHTSA did not allow early compliance for one RV manufacturer in MY 2014 that is currently complying EPA's GHG standards.

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6. 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.

   (1) Issues Related to Phase 2

   (

   1. 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.

      (b) Alternative Refrigerants

      In addition to use of leak-tight components in air conditioning system

      Page 40172

      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,\73\ 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.\74\ 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.\75\ 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.

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      \73\ Section 612(c) of the Clean Air Act requires EPA to review substitutes for class I and class II ozone-depleting substances and to determine whether such substitutes pose lower risk than other available alternatives. EPA is also required to publish lists of substitutes that it determines are acceptable and those it determines are unacceptable. See http://www.epa.gov/ozone/snap/refrigerants/lists/index.html, last accessed on March 5, 2015.

      \74\ Listed at 40 CFR part 82, subpart G.

      \75\ GWP values cited in this proposal are from the IPCC Fourth Assessment Report (AR4) unless stated otherwise. Where no GWP is listed in AR4, GWP values shall be determined consistent with the calculations and analysis presented in AR4 and referenced materials.

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      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 systems 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; \76\ 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.

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      \76\ To the extent that some manufacturers produce HD pickups and vans on the same production lines or in the same facilities as LD vehicles, some A/C system technology commonality between the two vehicle classes may be developing.

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      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 vehicles 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

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      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.\77\ 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.

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      \77\ See 79 FR 46126, August 6, 2014.

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      (c) 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 U.S.C. 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 \78\ Assemblers

      \78\ Vehicles produced by installing a used engine into a new chassis are commonly referred to as ``gliders,'' ``glider kits,'' or ``glider vehicles,''

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      To minimize these impacts the agencies are proposing certain regulatory flexibilities--both general and category-specific. In general, we are proposing to delay new requirements for EPA GHG emission standards by one year and simplify certification requirements for small businesses. For the proposed trailers standards, small businesses would be required to comply with EPA's standards before NHTSA's fuel efficiency standards would begin. NHTSA does not believe that providing small businesses trailer manufacturers with an additional year of delay to comply with those fuel efficiency standards would provide beneficial flexibility. The agencies 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 and delaying required compliance with each new standard by one model year.

      Vocational Chassis: Less stringent standards for certain vehicle categories.

      Glider Vehicle Assemblers: \79\ Exempt existing small businesses, but limit the small business exemption to a capped level of annual production (production in excess of the capped amount would be allowed, but subject to all otherwise applicable requirements including the Phase 2 standards).

      \79\ 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. EPA is also proposing to clarify its requirements for certification and revise its definitions for glider manufacturers. NHTSA is also considering including gliders under its Phase 2 standards.

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      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.

      (d) 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 Web site 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.

      (e) 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

      Page 40174

      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.

      (2) 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 86.1819-14. 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. 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 535.7, and add further detail to requirements for submitting credit allocation plans as specified in 49 CFR 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.

      (3) 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.

      (

   1. 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) for glider vehicles would also apply for the engines used in the exempted glider kits.

      (b) Re-Proposal of Nonconformance Penalty Process Changes

      Nonconformance penalties (NCPs) 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 and additional opportunity for public comment. They are discussed in Section XIV.

      (c) 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.

      (d) 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

      Page 40175

      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.

      (e) 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.

      (f) Amendments Related to Marine Diesel Engines in 40 CFR Parts 1042 and 1043

      EPA's emission standards and certification requirements for marine diesel engines under the Clean Air Act and the act to Prevent Pollution from Ships are identified in 40 CFR parts 1042 and 1043, respectively. EPA is proposing to amend these regulations with respect to continuous NOX monitoring and auxiliary engines, as well as making several other minor revisions.

      (g) 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.

      (4) Other Proposed Amendments to NHTSA Regulations

      NHTSA is proposing to amend 49 CFR parts 512 and 537 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 49 CFR part 537 would allow reporting to an electronic database (i.e. EPA's VERIFY system), and the amendments to 49 CFR part 512 would ensure that manufacturer's confidential business information would be protected through that process. This proposal is discussed further in Section XIII.

      II. Vehicle Simulation, Engine Standards and Test Procedures

1. 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 Web site: 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.\80\

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   \80\ These attributes are recognized in Phase 1 innovative technology provisions at 40 CFR 1037.610.

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   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, pickups, 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 are proposing the use of an equation based on the vehicle simulation procedure for trailer certification. In addition, we are proposing a simplified option for trailer certification that would not require testing to be undertaken by manufacturers to generate inputs for the equation. We are also proposing to continue separate fuel consumption and CO2 standards for the engines installed

   Page 40176

   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 and vocational chassis. For trailers, some testing may be performed in order to generate values that are input into the simulation-based compliance equations. 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 GEM-based compliance equation. 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.

   (1) 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, and 57156-57157. 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

   Page 40177

   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 1,000 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 allow for public comment, 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.81 82 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.\83\

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   \81\ See 76 FR 57146-57147.

   \82\ U.S. Environmental Protection Agency. ``Peer Review of the Greenhouse Gas Emissions Model (GEM) and EPA's Response to Comments.'' EPA-420-R-11-007. Last access on November 24, 2014 at http://www.epa.gov/otaq/climate/documents/420r11007.pdf.

   \83\ See EPA's Web site at http://www.epa.gov/otaq/climate/gem.htm for the Phase 1 GEM revision dated May 2013, made to accommodate a revision to 49 CFR 535.6(b)(3).

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   (2) 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. 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 cold-start and hot-start FTP only and not over the SET duty cycle. See Section II. D. for details on how we propose to modify the engine test procedure for Phase 2.

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

   Page 40178

   future regulatory efforts (76 FR 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 also proposing GEM-based certification. However, we are proposing a simplified structure that would allow certification without the manufacturers actually running GEM. More specifically, the agencies have developed a simple equation that uses the same trailer inputs as GEM to represent the emission impacts of aerodynamic improvements, tire improvements, and weight reduction. As described in Chapter 2.10.6 of the draft RIA, these equations have nearly perfect correlation with GEM so that they can be used instead of GEM without impacting stringency.

   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.

   (1) 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.\84\ 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.\85\ 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) (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.

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   \84\ 03-19034 TASK 2 Report-Paper 03-Class8_hil_DRAFT, September 30, 2013.

   \85\ GEM Validation, Technical Research Workshop, San Antonio, December 10-11, 2014.

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   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

   Page 40179

   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.\86\ 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.

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   \86\ 03-19034 TASK 2 Report-Paper 03-Class8_hil_DRAFT, September 30, 2013.

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   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 and 1037.230), 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.B.(2)(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. 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

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   approach for Phase 2. These are discussed in more detail in the following sections.

   (2) 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.

   (

   1. 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 downspeeding, 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

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   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 subcategories within this segment from 3 to 9. These 9 subcategories 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.

   (b) 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.

   Page 40182

   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, 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 1036.108 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.

3. Proposed Vehicle Simulation Model--Phase 2 GEM 87

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   \87\ The specific version of GEM used to develop the proposed standards, and which we propose to use for compliance purposes is also known as GEM 3.0.

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   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.

   (1) 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

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   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.

   (

   1. 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 subcategory 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.\88\ 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 90th 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.

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      \88\ National Academy of Science. ``Reducing the Fuel Consumption and GHG Emissions of Medium- and Heavy-Duty Vehicles, Phase Two, First Report.'' 2014. Recommendation 3.8.

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      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

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      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, 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) 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, 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 90th 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 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.

      (b) 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.\89\ 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

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      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.

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      \89\ Transportation Research Board 2014. ``Reducing the Fuel Consumption and Greenhouse Gas Emissions of Medium- and Heavy-Duty Vehicles, Phase Two.'' (``Phase 2 First Report'') Washington, DC, The National Academies Press. Cooperative Agreement DTNH22-12-00389. Available electronically from the National Academy Press Web site at http://www.nap.edu/catalog.php?record_id=12845 (last accessed December 2, 2014). Recommendation 3.7.

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      (c) 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. This procedure includes the use of a baseline fuel-efficient synthetic gear lubricant manufactured by BASF.\90\ This baseline will be used to gauge improvements in axle design and lubricants. The draft test procedure includes initial feedback that we have received from axle manufacturers and our own engineering judgment. Refer to 40 CFR 1037.560 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.

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      \90\ BASF TI/EVO 0137 e, Emgardsupreg FE 75W-90 Fuel Efficient Synthetic Gear Lubricant.

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      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

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      2.5 percent.\91\ 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.

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      \91\ NACFE. Executive Report--6x2 (Dead Axle) Tractors. November 2010. See Docket EPA-HQ-OAR-2014-0827.

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      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.

      (d) 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.

      (e) 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 drag area (CdA) value for each tractor configuration for Phase 2. See 40 CFR 1037.525.

      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 as applied in Phase 1) 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 1037.525 for further details of these aerodynamic test procedures.

      For trailer certification, the agencies are proposing to use GEM in a different way than GEM is used for tractor certification in Phase 1 and Phase 2. As described in Section IV, the proposed trailer standards are based on GEM simulation, but trailer manufacturers would not run GEM for certification. Instead, manufacturers would use a simple equation to replicate GEM performance from the inputs. As with GEM, the only technologies recognized by this GEM-based equation for trailer certification are aerodynamic technologies, tire technologies (including tire rolling resistance and automatic tire inflation systems), and some weight reduction technologies. Note that since the purpose of this equation is to measure GEM performance, it can be considered as simply another form of the model using a different input interface. Thus, for simplicity, the remainder of this Section II. C. sometimes discusses GEM as being used for trailers, without regard to how manufacturers will actually input GEM variables.

      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 with the equation.\92\ In this

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      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.

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      \92\ The agencies project that more than enough aerodynamic component vendors would take advantage of proposed optional pre-

      approval process to make trailer manufacturer testing optional.

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      (f) 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. We request comment on whether the proposed test procedure should be modified to measure the tire's revolutions per distance directly, as opposed to using the loaded radius to calculate the drive axle rotational speed from vehicle 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, or in the case of trailers, the equations based on 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.

      (g) 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 to reflect the weight increase of natural gas fuel tanks versus gasoline or diesel tanks. This increase would be allocated partly to the chassis and from the payload using the same allocation as weight reductions for the given vehicle type. 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. However, as with the other fuel consumption and GHG reducing technologies manufacturers use for compliance, reductions associated with weight reduction would be calculated using the trailer compliance equation rather than GEM. 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 all aspects of applying weight reductions in GEM, including proposed weight increases for alternate fuel vehicles and whether a 50/50 ratio is appropriate for vocational chassis.

      (h) GEM Duty Cycles for Tractor, Vocational Chassis and Trailer Certification

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      \93\ SwRI road grade testing and GEM validation report, 2014.

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      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.\93\ See Section III.E for more details on development of the proposed road grade profile. The agencies are continuing to evaluate

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      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.\94\ 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.\95\

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      \94\ See National Renewable Energy Laboratory report ``EPA GHG Certification of Medium- and Heavy-Duty Vehicles: Development of Road Grade Profiles Representative of US Controlled Access Highways'' dated May 2015 and EPA memorandum ``Development of an Alternative, Nationally Representative, Activity Weighted Road Grade Profile for Use in EPA GHG Certification of Medium- and Heavy-Duty Vehicles'' dated May 13, 2015, both available in Docket EPA-HQ-OAR-

      2014-0827. This docket also includes file NREL_SyntheticAndLocalGradeProfiles.xlsx which contains numerical representations of all road grade profiles described in the NREL report.

      \95\ NAS 2010 Report. Page 189. ``A fundamental concern raised by the committee and those who testified during our public sessions was the tension between the need to set a uniform test cycle for regulatory purposes, and existing industry practices of seeking to minimize the fuel consumption of medium and heavy-duty vehicles designed for specific routes that may include grades, loads, work tasks or speeds inconsistent with the regulatory test cycle. This highlights the critical importance of achieving fidelity between certification values and real-world results to avoid decisions that hurt rather than help real-world fuel consumption.''

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

      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.

      (i) 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.

      (2) 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.\96\ 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.

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

      \96\ National Academy of Science. ``Reducing the Fuel Consumption and GHG Emissions of Medium- and Heavy-Duty Vehicles, Phase Two, First Report.'' 2014. Recommendation1.2.

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      Page 40189

      GRAPHIC TIFF OMITTED TP13JY15.000

      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.

      (3) 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.\97\ 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.

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

      \97\ 40 CFR 1036.610, 1036.615, 1037.610, and 1037.615

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

      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.

      (

   1. 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 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 62833-62835 (October 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

      Page 40190

      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.

      (b) 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.\98\ 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.

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

      \98\ National Academy of Science. ``Reducing the Fuel Consumption and GHG Emissions of Medium- and Heavy-Duty Vehicles, Phase Two, First Report.'' 2014. Recommendation 1.6. However, the agencies are not proposing to allow for the use of manufacturer derived and verified models of the powertrain within 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 fuel mass 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 fuel mass from the powertrain test and mass of CO2 to mass of fuel ratio.

      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.

      The determine the positive work and average transmission output speed over average vehicle speed in GEM for the vehicle that will be certified, the agencies have defined a generic powertrain for each vehicle category. The agencies are requesting comment on if the generic powertrains should be modified according to specific aspects of the actual powertrain. For example using the engine's rated power to scale the generic engine's torque curve. Similarly, the transmission gear ratios could be scaled by the axle ratio of the drive axle, to make sure the generic engine is operated in GEM at the correct engine speed.

      (4) 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

      Page 40191

      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.

      We request comment on this proposed testing requirement. Commenters are encouraged to suggest alternate approaches that could achieve the assurance that the projected emissions reductions would occur in actual use.

      (5) Use of GEM in Establishing Proposed Numerical Standards

      Just like in Phase 1, the agencies are proposing specific numerical standards against which tractors and vocational vehicles would be evaluated using GEM (We propose that trailers use a simplified equation-based approach that was derived from GEM). Although the proposed standards are performance-based standards, which do not specifically require the use of any particular technologies, the agencies established the proposed standards by evaluating specific vehicle technology packages using a prepublication version of the Phase 2 GEM. This prepublication version was an intermediate version of the GEM source code, rather than the executable file version of GEM, which is being docketed for this proposal and is available on EPA's GEM Web page. Both the GEM source code and the GEM executable file are generally functionally equivalent.

      The agencies determined the proposed numerical standards essentially by evaluating certain specific technology packages representing the packages we are projecting to be feasible in the Phase 2 time frame. For each technology package, GEM was used determine a cycle-weighted g/ton-mile emission rate and a gal/1,000 ton-mile fuel consumption rate. These GEM results were then essentially averaged together, weighted by the adoption rates the agencies are projecting for each technology package and for each model year of standards. Consider as an oversimplified example of two technology packages for Class 8 low-roof sleepers cabs: one package that resulted in 60 g/ton-

      mile and a second that resulted in 80 g/ton-mile. If we project that the first package could be applied to 50 percent of the Class 8 low-

      roof sleeper cab fleet in MY 2027, and that the rest of the fleet could do no better than the second technology package, then we would set the fleet average standard at 70 g/ton-mile (0.5 middot 60 + 0.5 middot 80 = 70).

      Formal external peer review and expert external user review was then conducted on the version of the GEM source code that was used to calculate the numerical values of the proposed standards. It was discovered via these external review processes that the GEM source code contained some minor software ``bugs.'' These bugs were then corrected by EPA and the Phase 2 proposed GEM executable file was derived from this corrected version of the GEM source code. Moreover, we expect to also receive technical comments during the comment period that could potentially identify additional GEM software bugs, which would lead EPA to make additional changes to GEM before the Final Rule. Nevertheless, EPA has repeated the analysis described above using the corrected version of the GEM source code that was used to create the proposed GEM executable file. The results of this analysis are available in the docket to this proposal.\99\

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

      \99\ See Memorandum to the Docket ``Numerical Standards for Tractors, Trailers, and Vocational Vehicles Based on the June 2015 GEM Executable Code.

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

      Thus, even without the agencies making any changes in our projections of technology effectiveness or market adoption rates, it is likely that further revisions to GEM could result in us finalizing different numerical values for the standards. It is important to note that the agencies would not necessarily consider such GEM-based numerical changes by themselves to be changes in the stringency of the standards. Rather, we believe that stringency is more appropriately evaluated in technological terms; namely, by evaluating technology effectiveness and the market adoption rates of technologies. Nevertheless, the agencies will docket any updates and supporting information in a timely manner.

4. 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.

   (1) 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

   Page 40192

   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(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 40 CFR 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.

   (

   1. 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

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

      Weighting

      Speed, % load 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

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

      Proposed

      weighting

      Speed, % load 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

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

      (b) 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 40 CFR 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.\100\ 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).

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      \100\ US EPA, ``Technical Research Workshop supporting EPA and NHTSA Phase 2 Standards for MD/HD Greenhouse Gas and Fuel Efficiency-- December 10 and 11, 2014,'' http://www.epa.gov/otaq/climate/regs-heavy-duty.htm.

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

      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 beginning with MY 2020.\101\ The one exception to this requirement would be for cases in which the engine manufacturer certifies based on powertrain testing, as described in Section (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.

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

      \101\ Current normal vehicle manufacturing processes generally result in many vehicles being produced with prior model year engines. For example, we expect that some MY 2021 vehicles will be produced with MY 2020 engines. Thus, we are proposing to require engine manufacturers to begin providing fuel maps in 2020 so that vehicle manufacturers could run GEM to certify MY 2021 vehicles with MY 2020 engines.

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

      The current engine test procedures also require the development of regeneration emission rate and frequency factors to account for the emission changes for criteria pollutants during a regeneration event. In Phase 1, the agencies adopted provisions to exclude CO2 emissions and fuel consumption due to regeneration. However, for Phase 2, we propose to include CO2 emissions and fuel consumption due to regeneration over the FTP and RMC cycles as determined using the infrequently regenerating aftertreatment devices (IRAF) provisions in 40 CFR 1065.680. We do not believe this would significantly impact the stringency of the proposed standards

      Page 40193

      because manufacturers have already made great progress in reducing the impact of regeneration emissions since 2007. Nevertheless, we believe it would be prudent to begin accounting for regeneration emissions to discourage manufacturers from adopting compliance strategies that would reverse this trend. We request comment on this requirement.

      We are not proposing, however, to include fuel consumption due to regeneration in the creation of the fuel map used in GEM for vehicle compliance. We believe that the proposed requirements for the duty-

      cycle standards, along with market forces that already exist, would create sufficient incentives to reduce fuel consumption during regeneration over the entire fuel map.

      (c) Engine Test Procedures for Replicating Powertrain Tests

      As described in Section II.B.(2)(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.

      Under the proposed regulations, engine manufacturers certifying powertrain performance (instead of or in addition to the multi-point fuel maps) would be held responsible for powertrain test results. If the engine manufacturer does not certify powertrain performance and instead certifies only the multi-point fuel maps, it would held responsible for fuel map performance rather than the powertrain test results. Engine manufacturers certifying both would be responsible for both.

      (d) 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.

      (e) Potential Alternative Certification Approach

      In Section II.B.(2)(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 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.

      (2) 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.\102\ We assume that CO2 at the

      Page 40194

      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.

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

      \102\ Engine classification is set forth in 40 CFR 1036.801. 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 similar to the Otto combustion cycle. However, engines that meet the definition of spark-ignition per 1036.801, but are regulated as diesel engines under 40 CFR part 86 (for criteria pollutants) are treated as compression-ignition engines for GHG standards. Compression-ignition means relating to a type of reciprocating, internal-combustion engine that is not a spark-ignition engine, however, engines that meet the definition of compression-ignition per 1036.801, but are regulated as Otto-cycle engines under 40 CFR part 86 are treated as spark-ignition engines for GHG 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.B.(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.\103\ 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.

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

      \103\ The agencies note that the CO2 and fuel consumption standards for Class 7 and 8 combination tractors do not cover gasoline or LHDD engines, as those are not used in Class 7 and 8 combination tractors.

      Table II-4--Proposed Phase 2 Heavy-Duty Tractor Engine Standards for Engines\104\ Over the SET Cycle

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

      Medium heavy- Heavy heavy-

      Model year Standard duty diesel duty diesel

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

      2021-2023.................................. CO2 (g/bhp-hr)..................... 479 453

      Fuel Consumption (gallon/100 bhp- 4.7053 4.4499

      hr).

      2024-2026.................................. CO2 (g/bhp-hr)..................... 469 443

      Fuel Consumption (gallon/100 bhp- 4.6071 4.3517

      hr).

      2027 and Later............................. CO2 (g/bhp-hr)..................... 466 441

      Fuel Consumption (gallon/100 bhp- 4.5776 4.3320

      hr).

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

      Forcompression-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.

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

      \104\ Tractor engine standards apply to all engines, without regard to the engine-cycle classification.

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

      Table II-5 presents 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

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

      Light heavy- Medium heavy- Heavy heavy-

      Model year Standard duty diesel duty diesel duty diesel

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

      2021-2023.......................... CO2 Standard (g/bhp-hr).... 565 565 544

      Fuel Consumption Standard 5.5501 5.5501 5.3438

      (gallon/100 bhp-hr).

      2024-2026.......................... CO2 Standard (g/bhp-hr).... 556 556 536

      Fuel Consumption (gallon/ 5.4617 5.4617 5.2652

      100 bhp-hr).

      2027 and Later..................... CO2 Standard (g/bhp-hr).... 553 553 533

      Fuel Consumption (gallon/ 5.4322 5.4322 5.2358

      100 bhp-hr).

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

      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

      Page 40195

      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.

      (

   1. 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 (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 (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 additional confidence that the interim standards would be feasible.

      Because this analysis considers reductions from engines meeting the Phase 1 standards, it assumes manufacturers would continue to include the same compliance margins as Phase 1. In other words, a manufacturer currently declaring FCLs 10 g/hp-hr above its measured emission rates (in order to account for production and test-to-test variability) would continue to do the same in Phase 2. We request comment on this assumption.

      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.\105\ 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.

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

      \105\ See Section IX.M for additional information about payback periods.

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

      (i) 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.

      (ii) Turbocharging System

      Many advanced turbocharger technologies can be potentially added

      Page 40196

      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.

      (iii) 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 valvetrain, 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.

      (iv) 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.

      (v) 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.

      (vi) 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 downspeeding 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.

      (vii) 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.\106\ 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.

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

      \106\ See 2010 NAS Report, page 57.

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

      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

      Page 40197

      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.

      (viii) 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 support 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. The agencies welcome comment on the market penetration rates listed below.

      Table II-6--Projected Tractor Engine Technologies and Reduction

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

      SET weighted Market Market Market

      SET mode reduction (%) penetration penetration penetration

      2020-2027 (2021) % (2024) % (2027) %

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

      Turbo compound with clutch...................... 1.8 5 10 10

      WHR (Rankine cycle)............................. 3.6 1 5 15

      Parasitic/Friction (Cyl Kits, pumps, FIE), 1.4 45 95 100

      lubrication....................................

      Aftertreatment (lower dP)....................... 0.6 45 95 100

      EGR/Intake & exhaust manifolds/Turbo/VVT/Ports.. 1.1 45 95 100

      Combustion/FI/Control........................... 1.1 45 95 100

      Downsizing...................................... 0.3 10 20 30

      Weighted reduction (%).......................... .............. 1.5 3.7 4.2

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

      (ix) 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).

      Page 40198

      Table II-7--Projected Vocational Engine Technologies and Reduction

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

      GHG emissions Market Market Market

      Technology reduction 2020- penetration penetration penetration

      2027 % 2021 % 2024 % 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

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

      (x) 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 technologically 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).

      (b) 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 standards, we do not believe such risk is justified or needed. The approach the agencies are proposing accomplishes the same objective without the attendant

      Page 40199

      potential risk. With this approach, the Phase 1 SI engine standard for these engines would remain in place, and engine improvements would be reflected in the stringency of the vehicle standard for the vehicle in which the engine would be installed. Nevertheless, we request comment on the merits of adopting a more stringent SI engine standard in the 2024 to 2027 time frame, including comment on technologies, adoption rates, and effectiveness over the engine cycle that could support adoption of a more stringent standard. Please see Section V.C of this preamble for a description of the SI engine technologies that have been considered in developing the proposed vocational vehicle standards. Please see Section VI.C of this preamble for a description of the SI engine technologies that have been considered in developing the proposed HD pickup truck and van standards.

      (c) 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.

      (d) 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

      Page 40200

      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.

      (i) 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 $7 $7

      effectiveness SCR, dosing, DPF)........

      Valve Actuation......................... 82 82

      Cylinder Head (flow optimized, increased 3 3

      firing pressure, improved thermal

      management)............................

      Turbocharger (improved efficiency)...... 9 9

      Turbo Compounding....................... 50 50

      EGR Cooler (improved efficiency)........ 2 2

      Water Pump (optimized, variable vane, 43 43

      variable speed)........................

      Oil Pump (optimized).................... 2 2

      Fuel Pump (higher working pressure, 2 2

      increased efficiency, improved pressure

      regulation)............................

      Fuel Rail (higher working pressure)..... 5 5

      Fuel Injector (optimized, improved 5 5

      multiple event control, higher working

      pressure)..............................

      Piston (reduced friction skirt, ring and 1 1

      pin)...................................

      Valvetrain (reduced friction, roller 39 39

      tappet)................................

      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 $14 $14

      effectiveness SCR, dosing, DPF)........

      Valve Actuation......................... 166 166

      Cylinder Head (flow optimized, increased 6 6

      firing pressure, improved thermal

      management)............................

      Turbocharger (improved efficiency)...... 17 17

      Turbo Compounding....................... 92 92

      EGR Cooler (improved efficiency)........ 3 3

      Water Pump (optimized, variable vane, 84 84

      variable speed)........................

      Oil Pump (optimized).................... 4 4

      Fuel Pump (higher working pressure, 4 4

      increased efficiency, improved pressure

      regulation)............................

      Fuel Rail (higher working pressure)..... 9 9

      Fuel Injector (optimized, improved 10 10

      multiple event control, higher working

      pressure)..............................

      Piston (reduced friction skirt, ring and 3 3

      pin)...................................

      Valvetrain (reduced friction, roller 75 75

      tappet)................................

      Page 40201

      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 $14 $14

      effectiveness SCR, dosing, DPF)........

      Valve Actuation......................... 169 169

      Cylinder Head (flow optimized, increased 6 6

      firing pressure, improved thermal

      management)............................

      Turbocharger (improved efficiency)...... 17 17

      Turbo Compounding....................... 87 87

      EGR Cooler (improved efficiency)........ 3 3

      Water Pump (optimized, variable vane, 84 84

      variable speed)........................

      Oil Pump (optimized).................... 4 4

      Fuel Pump (higher working pressure, 4 4

      increased efficiency, improved pressure

      regulation)............................

      Fuel Rail (higher working pressure)..... 9 9

      Fuel Injector (optimized, improved 10 10

      multiple event control, higher working

      pressure)..............................

      Piston (reduced friction skirt, ring and 3 3

      pin)...................................

      Valvetrain (reduced friction, roller 75 75

      tappet)................................

      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.

      (ii) 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, 6 3 3

      improved thermal management)...................................

      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, 3 3 3

      improved pressure regulation)..................................

      Fuel Rail (higher working pressure)............................. 7 6 6

      Fuel Injector (optimized, improved multiple event control, 8 6 6

      higher working pressure).......................................

      Piston (reduced friction skirt, ring and pin)................... 1 1 1

      Valvetrain (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, 10 6 6

      improved thermal management)...................................

      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

      Page 40202

      Fuel Pump (higher working pressure, increased efficiency, 4 4 4

      improved pressure regulation)..................................

      Fuel Rail (higher working pressure)............................. 10 9 9

      Fuel Injector (optimized, improved multiple event control, 13 10 10

      higher working pressure).......................................

      Piston (reduced friction skirt, ring and pin)................... 2 2 2

      Valvetrain (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, 10 6 6

      improved thermal management)...................................

      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, 4 4 4

      improved pressure regulation)..................................

      Fuel Rail (higher working pressure)............................. 11 9 9

      Fuel Injector (optimized, improved multiple event control, 13 10 10

      higher working pressure).......................................

      Piston (reduced friction skirt, ring and pin)................... 3 3 3

      Valvetrain (reduced friction, roller tappet).................... 100 75 75

      Model Based Controls............................................ 39 39 39

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

      Total....................................................... 471 437 437

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

      (e) 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 (for which we are seeking comment) 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

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

      Market Market

      %-Improvements beyond Phase 1, 2018 engine as baseline SET reduction penetration MY penetration MY

      (%) 2021 (%) 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

      Exhaust 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

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

      Page 40203

      Table II-15--Projected Vocational Engine Technologies and Reduction for More Stringent Alternative Standards

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

      Market Market

      %-Improvements beyond Phase 1, 2018 engine as baseline FTP reduction penetration MY penetration MY

      (%) 2021 (%) 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\

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

      LHDD MHDD HHDD

      Model year MHDD tractor HHDD tractor vocational vocational vocational

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

      2021............................ $656 $656 $372 $345 $345

      2024............................ 1,885 1,885 493 457 457

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

      Note:

      \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 Alternative 4 and the proposed standards). In order to help make this assessment, we request comment on the following issues: whether manufacturers could meet these standards with three years less lead time, what additional expenses would be incurred to meet these standards with less lead time, and how reliable would the engines be if the manufacturers had to bring them to market three years earlier.

      (3) 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

      Page 40204

      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.

      (

   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.\107\

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

      \107\ Hallstrom, K., Voss, K., and Shah, S., ``The Formation of N2O on the SCR Catalyst in a Heavy Duty US 2010 Emission Control System'', SAE Technical Paper 2013-01-2463.

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

      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 degC.

      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.

      (b) 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.\108\ 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.

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

      \108\ http://www.epa.gov/otaq/crttst.htm.

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

      Page 40205

      GRAPHIC TIFF OMITTED TP13JY15.001

      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 2O 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.

      (4) 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.

      (5) 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.

      (

   1. 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.

      As discussed below, EPA is proposing to change the useful life for LHD

      Page 40206

      engines for GHG emissions from the current 10 years/110,000 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. 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 1.36 (i.e., 150,000 mile / 110,000 miles) 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. See Sections V and VI for additional discussion of similar adjustments of vehicle-based credits.

      (b) 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.

      (c) 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.

      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). As described in Section V, EPA is proposing that the Phase 2 GHG standards for vocational vehicles at or below 19,500 lbs GVWR apply over the same useful life of 150,000 miles or 15 years. To be consistent with that proposed change, we are also proposing that the Phase 2 GHG standards for engines used in vocational vehicles at or below 19,500 lbs GVWR apply over the same useful life of 150,000 miles or 15 years. NHTSA proposes to use the same useful life values as EPA for all vocational vehicles.

      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.

      We are also requesting comment on how to apply DFs to low level measurements where test-to-test variability may be larger than the actual deterioration rates being measured, such as might occur with N2O. Should we allow statistical analysis to be used to identifying trends rather than basing the DF on the highest measured value? How would we allow this where emission deterioration is not linear, such as saw-tooth deterioration related to maintenance or other offsetting emission effects causing emissions to peak before the end of the useful life? Finally, EPA requests comment on whether a similar allowance would be appropriate for criteria pollutants as well.

      (d) 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.

      Page 40207

      (e) 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.\109\ However, the Phase 1 rule included a provision allowing us to continue with the historic approach on an interim basis.

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

      \109\ See 40 CFR 1036.108.

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

      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 lbs GVWR) or a heavy heavy-

      duty engine (over 33,000 lbs 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, 40 CFR part 86,

      Appendix I, paragraph Appendix I,

      (f)(2) cycle; divide paragraph

      by 1.12 to de- (f)(1) cycle.

      normalize.

      Ramped-modal test (SET)....... yes................... no.

      NTE standards................. yes................... no.

      Smoke standard................ yes................... no.

      Manufacturer-run in-use yes................... no.

      testing.

      ABT--pollutants............... NOX, PM............... NOX, NMHC.

      ABT-- transient conversion 6.5................... 6.3.

      factor.

      ABT--averaging set............ Separate averaging One averaging

      sets for light, set for all SI

      medium, and heavy engines.

      HDDE.

      Useful life................... 110,000 miles for 110,000 miles

      light HDDE.

      185,000 miles for

      medium HDDE..

      435,000 miles for

      heavy HDDE..

      Warranty...................... 50,000 miles for light 50,000 miles.

      HDDE.

      100,000 miles for

      medium HDDE..

      100,000 miles for

      heavy HDDE..

      Detailed AECD description..... yes................... no.

      Test engine selection......... highest injected fuel most likely to

      volume. 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.\110\

      Page 40208

      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.

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

      \110\ Section 202(a)(2), applicable to emissions of greenhouse gases, does not mandate a specific period of lead time, but EPA sees no reason for a different compliance date here for GHGs and criteria pollutants. This is also true with respect to the closed crankcase emission discussed in the following subsection.

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

      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 lbs 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.

      (f) 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.\111\ 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.

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

      \111\ See 40 CFR 86.008-10(c).

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

      III. 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.\112\ These vehicles consist of a cab and engine (tractor or combination tractor) and a trailer.\113\ In general, reducing GHG emissions and fuel consumption for these vehicles would involve improvements to all aspects of the vehicle.

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

      \112\ The on-highway Class 7 and 8 combination tractor-trailers constitute the vast majority of this regulatory category. A small fraction of combination tractors are used in off-road applications and are regulated differently, as described in Section III.C.

      \113\ ``Tractor'' is defined in 49 CFR 571.3 to mean ``a truck designed primarily for drawing other motor vehicles and not so constructed as to carry a load other than a part of the weight of the vehicle and the load so drawn.''

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

      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.

1. 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.

   Page 40209

   GRAPHIC TIFF OMITTED TP13JY15.002

   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.

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

   \114\ Adapted from Figure 4.1. Class 8 Truck Energy Audit, Technology Roadmap for the 21st Century Truck Program: A Government-

   Industry Research Partnership, 21CT-001, December 2000.

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

   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.\115\ 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.

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

   \115\ Manufacturers may voluntarily opt-in to the NHTSA fuel consumption standards in model years 2014 or 2015. Once a manufacturer opts into the NHTSA program it must stay in the program for all optional MYs.

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

   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,'' or referred to as ``special purpose tractors'' in 40 CFR part 1037, 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,

   Page 40210

   a simulation tool is the preferred approach for HD tractor compliance because of the extremely large number of vehicle configurations.\116\ 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.

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

   \116\ National Academy of Science. ``Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles.'' 2010. Recommendation 8-4 stated ``Simulation modeling should be used with component test data and additional tested inputs from powertrain tests, which could lower the cost and administrative burden yet achieve the needed accuracy of results.''

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

   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.

2. 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 are proposing 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.\117\

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

   \117\ See 76 FR 57138 for Phase 1 discussion. See 40 CFR 1037.801 for proposed Phase 2 heavy-haul tractor regulatory definition.

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

   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.\118\ 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.

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

   \118\ Fuel consumption is calculated from CO2 using the conversion factor of 10,180 grams of CO2 per gallon for diesel fuel.

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

   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

   Page 40211

   reduced need and justification for some of the Phase 1 flexibilities. Further discussions on all of these matters are covered in the following sections.

3. 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.

   (1) 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.\119\ 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.

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

   \119\ Since the HD Phase 1 tractor standards fully phase-in by the MY 2017, this is the logical baseline year.

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

   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 U.S.C. 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)

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

   Day cab Sleeper cab

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

   Class 7 Class 8 Class 8

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

   2021 Model Year CO2 Grams per Ton-Mile..........................................................................

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

   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..............................................................

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

   Low Roof........................................................ 9.5285 7.6621 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..........................................................................

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

   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....................................................

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

   Low Roof........................................................ 8.8409 7.0727 6.2868

   Mid Roof........................................................ 9.8232 7.6621 6.9745

   High Roof....................................................... 9.9214 7.7603 6.8762

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

   2027 Model Year CO2 Grams per Ton-Mile..........................................................................

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

   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....................................................

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

   Low Roof........................................................ 8.5462 6.8762 6.0904

   Mid Roof........................................................ 9.4303 7.4656 6.7780

   Page 40212

   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 (of course) 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.

   (2) 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.

   (

   1. 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.

   (b) HFC Emissions

   Manufacturers can reduce hydrofluorocarbon (HFC) emissions from air conditioning (A/C) leakage emissions in two ways. First, they can

   Page 40213

   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). 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.

   (3) 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.\120\ 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.

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

   \120\ U.S. EPA. Development of Emission Rates for Heavy-Duty Vehicles in the Motor Vehicle Emissions Simulator MOVES 2010. EPA-

   420-B-12-049. August 2012.

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

   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).\121\ However, a 2010 model year or newer tractor that uses its main engine to idle emits approximately 0.35 grams PM per hour.\122\ 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.

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   \121\ Tier 4, less-than-8 kW nonroad compression-ignition engine exhaust emissions standards assumed for APUs: http://www.epa.gov/otaq/standards/nonroad/nonroadci.htm.

   \122\ U.S. EPA. MOVES2014 Reports. Last accessed on May 1, 2015 at http://www.epa.gov/otaq/models/moves/moves-reports.htm.

   Table III-2--Projected Impact of Increased Adoption of APUs in

   Phase 2

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

   Proposed program

   Baseline HD vehicle PM2.5\a\ emission

   CY PM2.5 emissions impact without

   (tons) further PM control

   (tons)

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

   2035.......................... 21,452 1,631

   2050.......................... 24,675 2,257

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

   Note:

   \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.\123\ 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.\124\ Currently ARB includes four control devices that have been verified to meet the Level 3 p.m. 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.

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   \123\ California Air Resources Board. Idle Reduction Technologies for Sleeper Berth Trucks. Last viewed on September 19, 2014 at http://www.arb.ca.gov/msprog/cabcomfort/cabcomfort.htm.

   \124\ California Air Resources Board. Sec. 2485(c)(3)(A)(1).

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   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).''

   Page 40214

   Table III-3--Projected Impact of Further Control on PM2.5 Emissions \a\

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

   Proposed HD phase 2 Proposed HD Phase 2 Net impact on

   Baseline national program national Program National national PM2.5

   CY heavy-duty vehicle PM2.5 Emissions PM2.5 emissions emission with

   PM2.5 emissions without Further PM with further pm further PM control

   (tons) Control (tons) control (tons) of APUs (tons)

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

   2035........................ 21,452 23,083 19,999 -3,084

   2050........................ 24,675 26,932 22,588 -4,344

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

   Note:

   \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.\125\ 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.\126\ EPA welcomes comments on cost estimates associated with DPF systems for APUs.

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   \125\ California Air Resources Board. Staff Report: Initial Statement of Reasons; Notice of Public Hearing to Consider Requirements to Reduce Idling Emissions From New and In-Use Trucks, Beginning in 2008. September 1, 2005. Page 38. Last viewed on October 20, 2014 at http://www.arb.ca.gov/regact/hdvidle/isor.pdf.

   \126\ Proventia. Tripac Filter Kits. Last accessed on October 21, 2014 at http://www.proventiafilters.com/purchase.html.

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   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).

   (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.\127\ 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.

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   \127\ See 40 CFR 1037.630.

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   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.\128\ 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:

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   \128\ As a part of the end of the year compliance process, EPA and NHTSA verify manufacturer's production reports to avoid any abuse of the vocational tractor allowance.

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   (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.\129\

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   \129\ See existing 40 CFR 1037.630(a)(1)(i) through (iii).

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   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.\130\ 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 manufacturers 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.\131\ Or the

   Page 40215

   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.

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   \130\ See 40 CFR 1037.150(c).

   \131\ A dromedary is a box, deck, or plate mounted behind the tractor cab and forward of the fifth wheel on the frame of the power unit of a tractor-trailer combination to carry freight.

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   EPA is proposing to not exempt glider kits from the Phase 2 GHG emission standards.\132\ 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.\133\ 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.

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   \132\ Glider vehicles are new vehicles produced to accept rebuilt engines (or other used engines) along with used axles and/or transmissions. The common commercial term ``glider kit'' is used here primarily to refer to an assemblage of parts into which the used/rebuilt engine is installed.

   \133\ Rebuilt engines used in glider vehicles are subject to EPA criteria pollutant emission standards applicable for the model year of the engine. See 40 CFR 86.004-40 for requirements that apply for engine rebuilding. Under existing regulations, engines that remain in their certified configuration after rebuilding may continue to be used.

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   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 their 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 glider vehicles under its Phase 2 program. The agencies request comment on their respective considerations.

   We believe that the agencies potentially having different policies for glider kits and glider vehicles under the Phase 2 program would not result in problematic 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. Only non-exempt glider vehicles would be subject to different requirements under the NHTSA and EPA regulations. However, we believe that 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.

   With regard to NHTSA's safety authority over gliders, the agency notes that it has become increasingly aware of potential noncompliance with its regulations applicable to gliders. NHTSA has learned of manufacturers who are creating glider vehicles that are new vehicles under 49 CFR 571.7(e); however, the manufacturers are not certifying them and obtaining a new VIN as required. NHTSA plans to pursue enforcement actions as applicable against noncompliant manufacturers. In addition to enforcement actions, NHTSA may consider amending 49 CFR 571.7(e) and related regulations as necessary. NHTSA believes manufacturers may not be using this regulation as originally intended.

   (5) 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 to use the same useful life mileage and years as EPA for Phase 2.

   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

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   Class 7 Tractors.................................. 10 185,000

   Class 8 Tractors.................................. 10 435,000

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4. 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,\134\ the Department of Energy's SuperTruck Program,\135\ 2010 National Academy of Sciences report of Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles,\136\ TIAX's assessment of technologies to support the NAS panel report,\137\ 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),\138\ and the technology cost analysis conducted by ICF for EPA.\139\

   Page 40216

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   \134\ Reinhart, T.E. (June 2015). Commercial Medium- and Heavy-

   Duty Truck Fuel Efficiency Technology Study--Report #1. (Report No. DOT HS 812 146). Washington, DC: National Highway Traffic Safety Administration.

   \135\ U.S. Department of Energy. SuperTruck Initiative. Information available at http://energy.gov/eere/vehicles/vehicle-technologies-office.

   \136\ Committee to Assess Fuel Economy Technologies for Medium- and Heavy-Duty Vehicles; National Research Council; Transportation Research Board (2010). Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles. (``The 2010 NAS Report'') Washington, DC, The National Academies Press.

   \137\ TIAX, LLC. ``Assessment of Fuel Economy Technologies for Medium- and Heavy-Duty Vehicles,'' Final Report to National Academy of Sciences, November 19, 2009.

   \138\ NESCCAF, ICCT, Southwest Research Institute, and TIAX. Reducing Heavy-Duty Long Haul Combination Truck Fuel Consumption and CO2 Emissions. October 2009.

   \139\ ICF International. ``Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy-Duty On-Road Vehicles.'' July 2010. Docket Number EPA-HQ-OAR-2010-0162-0283.

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   (1) 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.\140\ 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.\141\

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   \140\ Daimler Truck North America. SuperTruck Program Vehicle Project Review. June 19, 2014.

   \141\ See TIAX, Note 137, Page 4-40.

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   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.\142\ 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 4.3 and 5.0 kg/metric ton for the steer and drive tires respectively.\143\

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   \142\ Ibid.

   \143\ Memo to Docket. Coefficient of Rolling Resistance Certification Data. See Docket EPA-HQ-OAR-2014-0827.

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   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 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.\144\ 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.

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   \144\ American Iron and Steel Institute. ``A Cost Benefit Analysis Report to the North American Steel Industry on Improved Material and Powertrain Architectures for 21st Century Trucks.''

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   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.\145\ EPA and NHTSA agree with the TIAX assessment that a 5 percent reduction in overall fuel consumption reduction is achievable.\146\

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   \145\ See the draft RIA Chapter 2.4.8 for details.

   \146\ See the 2010 NAS Report, Note 136, above, at 128.

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   Page 40217

   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.

   The agencies have also received a letter from the California Air Resources Board requesting consideration of credits for reducing solar loads. Solar reflective paints and solar control glazing technologies are briefly discussed in draft RIA Chapter 2.4.9.3. The agencies request comment on the Air Resources Board's letter and recommendations.\147\

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   \147\ California Air Resources Board. Letter from Michael Carter to Matthew Spears dated December 3, 2014. Solar Control: Heavy-Duty Vehicles White Paper. Docket EPA-HA-OAR-2014-0827.

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   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.\148\ 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.\149\ 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.

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   \148\ Manual transmissions require the driver to shift the gears and manually engage and disengage the clutch. Automatic transmissions shift gears through computer controls and typically include a torque converter. An AMT operates similar to a manual transmission, except that an automated clutch actuator disengages and engages the drivetrain instead of a human driver. An AMT does not include a clutch pedal controllable by the driver or a torque converter.

   \149\ See TIAX, Note 137, above at 4-70.

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   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.\150\ 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.\151\ 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.

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   \150\ See the 2010 NAS Report, Note 136, page 67.

   \151\ Green, D.A., et al. ``The Effect of Engine, Axle, and Transmission Lubricant, and Operating Conditions on Heavy Duty Diesel Fuel Economy. Part 1: Measurements.'' SAE 2011-01-2129. SAE International Journal of Fuels and Lubricants. January 2012.

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   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 lbs less than

   Page 40218

   a 6x4 configuration.\152\ 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.\153\ 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.

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   \152\ North American Council for Freight Efficiency. ''Confidence Findings on the Potential of 6x2 Axles.'' 2014. Page 16.

   \153\ Reinhart, T.E. (June 2015). Commercial Medium- and Heavy-

   Duty Truck Fuel Efficiency Technology Study--Report #1. (Report No. DOT HS 812 146). Washington, DC: National Highway Traffic Safety Administration.

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   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.\154\ 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.

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   \154\ See the draft RIA Chapter 2.4 for details.

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   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.\155\ Generally, a 10 psi reduction in overall tire inflation results in about a 1 percent reduction in fuel economy.\156\ To achieve the intended fuel efficiency benefits of low rolling resistance tires, it is critical that tires are maintained at the proper inflation pressure.

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   \155\ Bridgestone Tires. Real Questions, Real Answers. http://www.bridgestonetrucktires.com/us_eng/real/magazines/ra_special-edit_4/ra_special4_fuel-tires.asp.

   \156\ ``Factors Affecting Truck Fuel Economy,'' Goodyear, Radial Truck and Retread Service Manual. Accessed February 16, 2010 at http://www.goodyear.com/truck/pdf/radialretserv/Retread_S9_V.pdf.

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   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.\157\ 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.\158\ 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.\159\ 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.

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   \157\ American Trucking Association. Tire Pressure Monitoring and Inflation Maintenance. June 2010. Page 3. Last accessed on December 15, 2014 at http://www.trucking.org/ATA%20Docs/About/Organization/TMC/Documents/Position%20Papers/Study%20Group%20Information%20Reports/Tire%20Pressure%20Monitoring%20and%20Inflation%20Maintenance%E2%80%94TMC%20I.R.%202010-2.pdf.

   \158\ TMC Future Truck Committee Presentation ``FMCSA Tire Pressure Monitoring Field Operational Test Results,'' February 8, 2011.

   \159\ North American Council for Freight Efficiency, ``Tire Pressure Systems,'' 2013.

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   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.\160\ 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).

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

   \160\ See the 2010 NAS Report, Note 136, page 128.

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

   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.

   Page 40219

   (2) 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.

   In addition to the high cost and limited utility of hybrids for many tractor drive cycles noted above, 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 may have the potential in the longer term to provide significant improvements in tractor fuel efficiency and to greenhouse gas emission reductions. However, due to the high cost, limited benefit during highway driving, and 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.

   (

   1. 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.

   Page 40220

   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 2017 MY 11L 2017 MY 11L 2017 MY 15L 2017 MY 15L 2017 MY 15L 2017 MY 2017 MY 2017 MY

   Engine 350 Engine 350 Engine 350 Engine 455 Engine 455 Engine 455 15L Engine 15L Engine 15L Engine

   HP HP HP HP HP HP 455 HP 455 HP 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 more dynamic baseline, was developed to estimate the effect of market pressures and non-regulatory government initiatives to improve tractor fuel consumption. The more 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 \161\ 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 more 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 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.

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

   \161\ U.S. Department of Energy. ``SuperTruck Making Leaps in Fuel Efficiency.'' 2014. Last accessed on May 10, 2015 at http://energy.gov/eere/articles/supertruck-making-leaps-fuel-efficiency.

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   Page 40221

   (b) 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.

   (i) 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.

   (ii) 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.

   (iii) 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 the agencies 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.

   (iv) 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.

   (v) 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.

   (vi) 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.

   (vii) 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.

   (viii) 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.

   (ix) 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.

   (x) Summary of Technology Performance

   Table III-7 describes the performance levels for the range of Class 7 and 8 tractor vehicle technologies.

   Page 40222

   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 2021MY 2021MY 2021MY 2021MY 2021MY 2021MY 2021MY 2021MY

   11L 11L 11L 15L 15L 15L 15L 15L 15L

   Engine Engine Engine Engine Engine Engine Engine Engine Engine

   350 HP 350 HP 350 HP 455 HP 455 HP 455 HP 455 HP 455 HP 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

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

   Other 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

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

   (c) 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

   Page 40223

   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 and Table III-10, specify the adoption rates that EPA and NHTSA used to develop the proposed standards. The agencies welcome comments on these adoption rates.

   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.

   (i) 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.\162\ 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.

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

   \162\ U.S. Department of Energy. Transportation Energy Data Book, Edition 28-2009. Table 5.7.

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

   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.

   (ii) 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 3 tires in all tractor segments given the potential interference with vehicle utility that could result.

   (iii) 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.

   (iv) 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

   Page 40224

   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.\163\ However, we welcome comment on other approaches that would appropriately quantify the reductions that would be experienced in the real world.

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

   \163\ The agencies are proposing to continue the HD Phase 1 AES override provisions included in 40 CFR 1037.660(b) for driver safety.

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

   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.\164\ 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.

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

   \164\ Gaines, L., A. Vyas, J. Anderson. Estimation of Fuel Use by Idling Commercial Trucks. January 2006.

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

   (v) 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 or owners. 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 vehicle at the request of the 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.\165\

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

   \165\ Ibid.

   The agencies note that because a VSL value can be input into GEM, its benefits can be directly assessed with the model and off cycle credit applications therefore are not necessary even though the proposed standard is not based on performance of VSLs (i.e. VSL is an on-cycle technology).

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

   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, but we welcome comment on whether the use of a VSL would require a fleet to deploy additional tractors. 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.

   (vi) Summary of the Adoption Rates Used To Determine the Proposed Standards

   Table III-8 through Table III-10 provide the adoption rates of each technology broken down by weight class, cab configuration, and roof height.

   Page 40225

   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

   % % % % % % % % %

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

   2021 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............................................... 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

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

   Other 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

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

   Page 40226

   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

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

   Other 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

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

   Page 40227

   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

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

   Other 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

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

   (d) 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 through Table III-10. For example, the proposed CdA value for a 2021MY Class 8 Sleeper Cab High Roof scenario case was

   Page 40228

   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.\166\ 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.

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

   \166\ See Section II.D above explaining the derivation of the proposed engine standards.

   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 2021MY 11L 2021MY 11L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L

   Engine 350 Engine 350 Engine 350 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455

   HP HP HP HP HP HP HP HP 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 lbs

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

   Page 40229

   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 2024MY 11L 2024MY 11L 2024MY 15L 2024MY 15L 2024MY 15L 2024MY 15L 2024MY 15L 2024MY 15L

   Engine 350 Engine 350 Engine 350 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455

   HP HP HP HP HP HP HP HP 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 lbs

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

   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 2027MY 11L 2027MY 11L 2027MY 15L 2027MY 15L 2027MY 15L 2027MY 15L 2027MY 15L 2027MY 15L

   Engine 350 Engine 350 Engine 350 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455

   HP HP HP HP HP HP HP HP 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

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

   Page 40230

   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 lbs

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

   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

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

   Day cab Sleeper Cab

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

   Class 7 Class 8 Class 8

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

   2021 Model Year CO2 Grams per Ton-Mile

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

   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

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

   Low Roof........................................................ 9.5285 7.6621 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

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

   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

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

   Low Roof........................................................ 8.8409 7.0727 6.2868

   Mid Roof........................................................ 9.8232 7.6621 6.9745

   High Roof....................................................... 9.9214 7.7603 6.8762

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

   Page 40231

   2027 Model Year CO2 Grams per Ton-Mile

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

   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

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

   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. We welcome comments on the technology costs.

   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 Low/mid

   roof High roof 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. The engine costs in this

   table are equal to the engine costs associated with the separate engine standard because both include the same

   set of engine technologies (see Section II.D.2.d.i).

   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 Low/mid

   roof High roof 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

   Page 40232

   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 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).

   \c\ Engine costs are for a heavy HD diesel engine meant for a combination tractor. The engine costs in this

   table are equal to the engine costs associated with the separate engine standard because both include the same

   set of engine technologies (see Section II.D.2.d.i).

   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 Low/mid

   roof High roof 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 2027 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. The engine costs in this

   table are equal to the engine costs associated with the separate engine standard because both include the same

   set of engine technologies (see Section II.D.2.d.i).

   (i) 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 lbs 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 lbs as heavy-haul tractors. Based on comments received during the development of HD Phase 1 (76 FR 57136-57138) and because we are not proposing a sales limit for heavy-haul like we have for the vocational tractors, 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

   Page 40233

   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 lbs. 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.\167\ We welcome comment on this approach.

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

   \167\ Since aerodynamic improvements are not part of the technology package, the agencies likewise are not proposing any bin structure for the heavy-haul tractor subcategory.

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

   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 2024 MY 15L 2027 MY 15L

   Engine with Engine with Engine with

   600 HP (%) 600 HP (%) 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 10 20 30

   Improvements....................

   Automatic Tire Inflation Systems. 20 40 40

   Page 40234

   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 Engine = 2021 MY 15L Engine = 2024 MY 15L Engine = 2027 MY 15L

   HP. Engine with 600 HP. Engine with 600 HP. Engine with 600 HP

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

   Aerodynamics (CdA in m\2\) = 5.00

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

   Steer Tires (CRR in kg/metric ton) = Steer Tires (CRR in kg/ Steer Tires (CRR in kg/ Steer Tires (CRR in kg/

   7.0. metric ton) = 6.2. metric ton) = 6.0. metric ton) = 5.8.

   Drive Tires (CRR in kg/metric ton) = Drive Tires (CRR in kg/ Drive Tires (CRR in kg/ Drive Tires (CRR in kg/

   7.4. metric ton) = 6.6. metric ton) = 6.4. metric ton) = 6.2.

   Transmission = 13 speed Manual Transmission = 13 speed Transmission = 13 speed Transmission = 13 speed

   Transmission, Gear Ratios = 12.29, Automated Manual Automated Manual Automated Manual

   8.51, 6.05, 4.38, 3.20, 2.29, 1.95, Transmission, Gear Transmission, Gear Transmission, Gear

   1.62, 1.38, 1.17, 1.00, 0.86, 0.73. Ratios = 12.29, 8.51, Ratios = 12.29, 8.51, Ratios = 12.29, 8.51,

   6.05, 4.38, 3.20, 6.05, 4.38, 3.20, 6.05, 4.38, 3.20,

   2.29, 1.95, 1.62, 2.29, 1.95, 1.62, 2.29, 1.95, 1.62,

   1.38, 1.17, 1.00, 1.38, 1.17, 1.00, 1.38, 1.17, 1.00,

   0.86, 0.73. 0.86, 0.73. 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 6x2 Axle Weighted 6x2 Axle Weighted

   Effectiveness = 0%. Effectiveness = 0%. Effectiveness = 0%.

   N/A.................................. Low Friction Axle Low Friction Axle Low Friction Axle

   Lubrication = 0.1%. Lubrication = 0.2%. Lubrication = 0.2%.

   N/A.................................. AMT benefit = 1.1%..... AMT benefit = 1.8%..... AMT benefit = 1.8%.

   N/A.................................. Predictive Cruise Predictive Cruise Predictive Cruise

   Control = 0.4%. Control = 0.8%. Control = 0.8%.

   N/A.................................. Accessory Improvements Accessory Improvements Accessory Improvements

   = 0.1%. = 0.2%. = 0.3%.

   N/A.................................. Air Conditioner Air Conditioner Air Conditioner

   Efficiency Efficiency Efficiency

   Improvements = 0.1%. Improvements = 0.1%. Improvements = 0.2%.

   N/A.................................. Automatic Tire Automatic Tire Automatic Tire

   Inflation Systems = Inflation Systems = Inflation Systems =

   0.2%. 0.4%. 0.4%.

   N/A.................................. Weight Reduction = 0 Weight Reduction = 0 Weight Reduction = 0

   lbs. lbs. lbs.

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

   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 54 52 51

   Standard........................

   Gallons of Fuel per 1,000 Ton- 5.3045 5.1081 5.010

   Mile............................

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

   The technology costs associated with the proposed heavy-haul tractor standards are shown below in Table III-21. We welcome comment on the technology costs.

   Page 40235

   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.

   (e) 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 \168\ 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 62926-62927, which EPA found to be a highly reasonable given the usual period of ownership of light trucks is typically five years.\169\ 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.\170\ 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, and we estimate the cost per gallon of avoided fuel consumption to be about $0.25 per gallon, which compares favorably with the levels of cost effectiveness the agencies found to be reasonable for light duty trucks.171 172 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).

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

   \168\ See Draft RIA Chapter 7.1.3.

   \169\ Auto Remarketing. Length of Ownership Returning to More Normal Levels; New Registrations Continue Slow Climb. April 1, 2013. Last accessed on February 26, 2015 at http://www.autoremarketing.com/trends/length-ownership-returning-more-normal-levels-new-registrations-continue-slow-climb.

   \170\ North American Council for Freight Efficiency. Barriers to Increased Adoption of Fuel Efficiency Technologies in Freight Trucking. July 2013. Page 24.

   \171\ See Draft RIA Chapter 7.1.4.

   \172\ If using a cost effectiveness metric that treats fuel savings as a negative cost, net costs per ton of GHG emissions reduced or per gallon of avoided fuel consumption would be negative under the proposed standards.

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

   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

   Page 40236

   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. However, Alternative 4 would provide earlier GHG benefits compared to Alternative 3.

   (f) 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 Proposed Alternative fully phased-in

   Alternative). 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 considering the 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.\173\ 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.

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

   \173\ See Tables III-14 and III-27.

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

   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.

   (g) 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.

   Page 40237

   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

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

   Other 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

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

   Page 40238

   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

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

   Other 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

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

   Page 40239

   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 2021MY 11L 2021MY 11L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L

   Engine 350 Engine 350 Engine 350 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455

   HP--2% HP--2% HP--2% HP--2% HP--2% HP--2% HP--2% HP--2% HP--2%

   reduction reduction reduction reduction reduction reduction reduction reduction 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 lbs

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

   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 2021MY 11L 2021MY 11L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L 2021MY 15L

   Engine 350 Engine 350 Engine 350 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455 Engine 455

   HP--4% HP--4% HP--4% HP--4% HP--4% HP--4% HP--4% HP--4% HP--4%

   reduction reduction reduction reduction reduction reduction reduction reduction reduction

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

   Aerodynamics (CdA in m\2\)

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

   4.52 5.92 5.52 4.52 5.92 5.52 4.52 5.92 5.32

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

   Page 40240

   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 lbs

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

   Direct Drive Weighted Efficiency = 1% for sleeper cabs; 0.8% for day cabs

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

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

   Table III-27--Tractor Standards Associated with Alternative 4

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

   Day cab Sleeper cab

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

   Class 7 Class 8 Class 8

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

   2021 Model Year CO2 Grams per Ton-Mile

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

   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

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

   Low Roof......................... 9.0373 7.2692 6.4833

   Mid Roof......................... 10.0196 7.9568 7.2692

   High Roof........................ 10.2161 8.0550 7.1709

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

   2024 Model Year CO2 Grams per Ton-Mile

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

   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

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

   Low Roof......................... 8.5462 6.8762 6.0904

   Mid Roof......................... 9.4303 7.4656 6.7780

   High Roof........................ 9.4303 7.4656 6.5815

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

   Page 40241

   The technology costs of achieving the reductions projected in Alternative 4 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 Low/mid

   roof High roof 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. The engine costs in this table are equal to the engine costs

   associated with the separate engine standard because both include the same set of engine technologies (see Section II.D.2.e).

   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 Low/mid

   roof High roof 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. The engine costs in this table are equal to the engine costs

   associated with the separate engine standard because both include the same set of engine technologies (see Section II.D.2.e).

5. 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.

   (1) 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

   Page 40242

   compliance program including where we are not proposing any changes.

   (

   1. Application and Certification Process

      For the Phase 2 proposed rule, 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.

      (b) 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)) although added for NHTSA in Phase 2 (40 CFR 535.5)

      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)

      (c) 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.

      (d) 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.\174\

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

      \174\ ICF International. Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy-Duty On-road Vehicles. July 2010. Pages 4-15. Docket Number EPA-HQ-OAR-2010-0162-0044.

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

      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 lbs which is the gross vehicle weight limit on the Federal Interstate Highway System or greater than 80,000 lbs for vehicles traveling on roads outside of the interstate system).\175\

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

      \175\ M.J. Bradley & Associates. Setting the Stage for Regulation of Heavy-Duty Vehicle Fuel Economy and GHG Emissions: Issues and Opportunities. February 2009. Page 35. Analysis based on 1992 Truck Inventory and Use Survey data, where the survey data allowed developing the distribution of loads instead of merely the average loads.

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

      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 lbs, depending on the average distance travelled per day.\176\ The same study shows that Class 7 vehicles carried between 18,674 and 34,210 lbs of payload also depending on average distance travelled per day. Based on

      Page 40243

      these data, the agencies are proposing to continue to prescribe a fixed payload of 25,000 lbs for Class 7 tractors and 38,000 lbs 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.''

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

      \176\ The U.S. Federal Highway Administration. Development of Truck Payload Equivalent Factor. Table 11. Last viewed on March 9, 2010 at http://ops.fhwa.dot.gov/freight/freight_analysis/faf/faf2_reports/reports9/s510_11_12_tables.htm.

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

      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

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

      Regulatory Tractor tare Trailer weight Total weight

      Model type subcategory weight (lbs) (lbs) Payload (lbs) (lbs)

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

      Class 8...................... Sleeper Cab 19,000 13,500 38,000 70,500

      High Roof.

      Class 8...................... Sleeper Cab Mid 18,750 10,000 38,000 66,750

      Roof.

      Class 8...................... Sleeper Cab Low 18,500 10,500 38,000 67,000

      Roof.

      Class 8...................... Day Cab High 17,500 13,500 38,000 69,000

      Roof.

      Class 8...................... Day Cab Mid 17,100 10,000 38,000 65,100

      Roof.

      Class 8...................... Day Cab Low 17,000 10,500 38,000 65,500

      Roof.

      Class 7...................... Day Cab High 11,500 13,500 25,000 50,000

      Roof.

      Class 7...................... Day Cab Mid 11,100 10,000 25,000 46,100

      Roof.

      Class 7...................... Day Cab Low 11,000 10,500 25,000 46,500

      Roof.

      Class 8...................... Heavy-Haul..... 19,000 13,500 86,000 118,500

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

      (e) 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.

      (2) Key Differences in HD Phase 2 Compliance Provisions

      We welcome comment on all aspects of the compliance program for which we are proposing changes.

      (

   1. 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.

      (i) 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 1037.525). 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

      Page 40244

      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) and proposed 40 CFR 1037.525(b)(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 six new Falt-aero determinations each year. We welcome comment on the burden associated with this proposed change to conduct up to six coastdown tests per year per manufacturer.

      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.\177\ 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 1037.533. 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.

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

      \177\ Southwest Research Institute. ``Heavy Duty Class 8 Truck Coastdown and Constant Speed Testing.'' April 2015.

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

      The agencies are also considering refinements to the computational fluid dynamics modeling method to determine the aerodynamic performance of tractors. Specifically, we are considering whether the conditions for performing the analysis require greater specificity (e.g., wind speed and direction inclusion, turbulence intensity criteria value) or if turbulence model and mesh deformation should be required, rather than ``if applicable,'' for all CFD analysis.\178\ The agencies welcome comment on the proposed revisions.

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

      \178\ 40 CFR 1037.531 ``Computational fluid dynamics (CFD)''.

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

      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.\179\ 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 request comment on whether or not we should factor in a test variability compliance margin into the aerodynamic test procedure, and therefore request data on aerodynamic test variability.

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

      \179\ Southwest Research Institute. ``Heavy Duty Class 8 Truck Coastdown and Constant Speed Testing.'' April 2015.

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

      (ii) 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.\180\ As noted in the NAS report, the wind average drag coefficient is about 15 percent higher than the zero degree coefficient of drag.\181\ 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.\182\ 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.

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

      \180\ See 2010 NAS Report, page 95

      \181\ See 2010 NAS Report, Finding 2-4 on page 39. Also see 2014 NAS Report, Recommendation 3.5.

      \182\ See 2010 NAS Report. Page 95.

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

      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

      Page 40245

      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.\183\

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

      \183\ Proposed 40 CFR 1037.525(d)(2); ``Yaw Sweep Corrections''.

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

      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.

      (iii) 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.\184\ 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.\185\ 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.

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

      \184\ See 40 CFR 1037.501(g).

      \185\ See Memo to Docket, Amy Kopin. ``Truck and Trailer Roof Match Analysis.'' August 2010.

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

      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 \186\ 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.187 188 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).

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

      \186\ California Air Resources Board. Tractor-Trailer Greenhouse Gas regulation. Last viewed on September 4, 2014 at http://www.arb.ca.gov/msprog/truckstop/trailers/trailers.htm.

      \187\ Ben Sharpe (ICCT) and Mike Roeth (North American Council for Freight Efficiency), ``Costs and Adoption Rates of Fuel-Saving Technologies for Trailer in the North American On-Road Freight Sector'', Feb 2014.

      \188\ Frost & Sullivan, ``Strategic Analysis of North American Semi-trailer Advanced Technology Market'', Feb 2013.

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

      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 8 percent improvement in coefficient of drag area. 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.

      (iv) 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

      Page 40246

      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.......................... =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%)........ 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 ( 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 technology inputs.

      The agencies welcome comments on the inclusion of these proposed technologies into GEM in Phase 2.

      (e) 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 (CAA section 203(a)(3)(A); 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, and we are not proposing to change those provisions (see 40 CFR 1037.640). However, as we develop Phase 2, we understand that the concerns still exist that the ability for a tractor manufacturer to reflect the use of a VSL in its compliance determination may be constrained by the demand for flexibility in the use of VSLs by the customers. . 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). We request comment on potential approaches which would enable feedback mechanism between the vehicle owner/fleet that would provide the agencies the assurance that the benefits of the VSLs will be seen in use but which also provides the vehicle owner/fleet the flexibility they many need during in-use operation. More generally in our discussions with several trucking fleets and with the American Trucking Associations an interest was expressed by the fleets if there was a means by which they could participate in the emissions credit transactions which is currently limited to the directly regulated truck manufacturers. VSLs and extended idle systems were two example technologies that fleets and individual owners can order for a new build truck, and that from the fleet's perspective the truck manufacturers receive emission credits for. The agencies do not have a specific proposal or a position on the request from the American Trucking Association and its members, but we request comment on whether or not it is appropriate to allow owners to participate in the overall compliance process for the directly regulated parties, if such a thing is allowed under the two agencies' respective statutes, and what regulatory provisions would be needed to incorporate such an approach.

      (f) Emission Control Labels

      The agencies consider it crucial that authorized compliance inspectors are able to identify whether a vehicle is certified, and if so whether it is in its 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 complexity in determining greenhouse gas emissions as proposed in Phase 2, the agencies do not believe that we can unambiguously determine whether or not a vehicle is in a certified condition 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(c)(6) and in Appendix III to 40 CFR part 1037 from the emission control labels for vehicles certified to the Phase 2 standards. However, the agencies may finalize requirements to maintain some label content to facilitate a limited visual inspection of key vehicle parameters that can be readily observed. Such requirements may be very similar to the labeling requirements from the Phase 1 rulemaking, though we would want to more carefully consider the list of technologies that would allow for the most effective inspection. We request comment on an appropriate list of candidate technologies that would properly balance the need to limit label content with the interest in providing the most useful information for inspectors to confirm that vehicles have been properly built. We are not proposing to modify the existing emission control labels for tractors certified for MYs 2014-2020 (Phase 1) CO2 standards.

      Under the agencies' existing authorities, manufacturers must provide detailed build information for a specific vehicle upon our request. Our expectation is that this information should be available to us via email or other similar electronic communication

      Page 40251

      on a same-day basis, or within 24 hours of a request at most. We request comment on any practical limitations in promptly providing this information. We also request comment on approaches that would minimize burden for manufacturers to respond to requests for vehicle build information and would expedite an authorized compliance inspector's visual inspection. For example, the agencies have started to explore ideas that would provide inspectors with an electronic method to identify vehicles and access on-line databases that would list all of the engine-specific and vehicle-specific emissions control system information. We believe that electronic and Internet technology exists today for using scan tools to read a bar code or radio frequency identification tag affixed to a vehicle that would then lead to secure on-line access to a database of manufacturers' detailed vehicle and engine build information. Our exploratory work on these ideas has raised questions about the level of effort that would be required to develop, implement and maintain an information technology system to provide inspectors real-time access to this information. We have also considered questions about privacy and data security. We request comment on the concept of electronic labels and database access, including any available information on similar systems that exist today and on burden estimates and approaches that could address concerns about privacy and data security. Based on new information that we receive, we may consider initiating a separate rulemaking effort to propose and request comment on implementing such an approach.

      (g) 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.

      (h) 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 proposed 40 CFR 1037.601(a)(1)). 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 and EPA is proposing to add requirements for informal approvals in 40 CFR 1037.610.

      (i) Chassis Dynamometer Testing Requirement

      The agencies foresee the need to continue to track the progress of the Phase 2 program throughout its implementation. As discussed in Section II, 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 three sleeper cabs tractor and two day cab tractor and provide the data and the GEM result from each of these two tractor configurations to EPA (see 40 CFR 1037.665). We request comment on the costs and efficacy of this data submission requirement. We emphasize that this program would not be used for compliance or enforcement purposes.

6. 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.

   (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, 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

   Page 40252

   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?

   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.

   (2) 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 57253. The agencies propose to largely continue, but redesignate the Phase 1 innovative technology program as part of 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. The agencies propose to maintain the requirement 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. 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 62832-62840 (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 and EPA are also proposing to prohibit credits from technologies addressed by any of NHTSA's crash avoidance safety rulemakings (i.e., congestion management systems). See 77 FR 62733 (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.

   (3) 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. This section applies for all vehicles subject to 40 CFR part 1037 and would thus apply for trailers regulated in Phase 2. 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. Thus, this provision does not provide a blanket allowance for modifications after the useful life.

   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

   Page 40253

   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). EPA notes, however, that this is merely a presumption, and would not prohibit modifications during the useful life where the owner clearly has a reasonable technical basis for knowing that the modifications would not cause the vehicle to exceed any applicable standard.

   (4) 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.

   (5) 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.

   IV. 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 drawn by Class 7 and 8 tractors when coupled to the tractor's fifth wheel. The agencies are not proposing standards for trailers designed to be drawn by vehicles other than tractors, and those that are coupled to vehicles with pintle hooks or hitches instead of a fifth wheel. 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.

1. 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.\202\ 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.

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   \202\ The Regulatory Flexibility Act (RFA), as amended by the Small Business Regulatory Enforcement Fairness Act (SBREFA), requires agencies to account for economic impacts of all rules that may have a significant impact on a substantial number of small businesses and in addition contains provisions specially applicable to EPA requiring a multi-agency pre-proposal process involving outreach and consultation with representatives of potentially affected small businesses. See http://www.epa.gov/rfa/ for more information. Note that for this Phase 2 proposal, EPA has completed a Small Business Advocacy Review panel process that included small trailer manufacturers, as discussed in XIV.C below.

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   In the Phase 1 proposal, the agencies solicited general comments on controlling CO2 emissions and fuel consumption through future trailer regulations (see 75 FR 74345-74351). 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.

2. The Trailer Industry

   (1) 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

   Page 40254

   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.

   (2) Historical Context for Proposed Trailer Provisions

   (

   1. 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 Web site. 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,\203\ 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 \204\ 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.\205\

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   \203\ SAE International, Fuel Consumption Test Procedure--Type II. SAE Standard J1321. Revised 2012-02-06. Available at: http://standards.sae.org/j1321_201202/.

   \204\ SAE International. Wind Tunnel Test Procedure for Trucks and Buses. SAE Standard J1252. Revised 2012-07-16. Available at: http://standards.sae.org/j1252_201207/.

   \205\ McCallen, R., et al. Progress in Reducing Aerodynamic Drag for Higher Efficiency of Heavy Duty Trucks (Class 7-8). SAE Technical Paper. 1999-01-2238.

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   SmartWay verifies tires based on test data submitted by tire manufacturers demonstrating the coefficient of rolling resistance (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 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

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   that reduce CO2 emissions and fuel consumption.

   (b) 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.\206\ 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.\207\

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   \206\ Recently, in December 2013, ARB adopted regulations that establish its own parallel Phase 1 program with standards consistent with the EPA Phase 1 tractor standards. On December 5, 2014 California's Office of Administrative Law approved ARB's adoption of the Phase 1 standards, with an effective date of December 5, 2014.

   \207\ See EPA's waiver of CARB's heavy-duty tractor-trailer greenhouse gas regulation applicable to new 2011 through 2013 model year Class 8 tractors equipped with integrated sleeper berths (sleeper-cab tractors) and 2011 and subsequent model year dry-can and refrigerated-van trailers that are pulled by such tractors on California highways at 79 FR 46256 (August 7, 2014).

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   (c) 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 \208\ 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.

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   \208\ 49 CFR 571.223, 224.

   Table IV--1 Current NHTSA Statutes and Regulations Related to Trailers

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   Reference Title

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   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.

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   (d) 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.\209\ 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.\210\ EPA and NHTSA do not anticipate any conflicts between FHWA's regulations and those proposed in this rulemaking.

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   \209\ 23 CFR 658.9.

   \210\ 23 CFR part 658.

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   (3) 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.\211\ 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.

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   \211\ Final Report of the Small Business Advocacy Review Panel on EPA's Planned Proposed Rule: Greenhouse Gas Emissions and Fuel Efficiency Standards for Medium- and Heavy-Duty Engines and Vehicles: Phase 2, January 15, 2015.

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3. Proposed Phase 2 Trailer Standards

   This proposed rule 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

   Page 40256

   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 could 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.

   (1) Trailer Designs Covered by This Proposed Rule

   As described previously, the trailer industry produces many different trailer designs for many different applications. The agencies are proposing standards for a majority of these trailers. Note that these proposed regulations apply to trailers designed for being drawn by a tractor when coupled to the tractor's fifth wheel. 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.\212\ The proposed standards for these trailers are based on the proposed standards for full-aero box-trailers, but would be less stringent than when the program is fully phased in.

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   \212\ Examples of types of work-performing components, equipment, or designs that the agencies might consider as warranting recognition as partial-aero or non-aero trailers include side or end lift gates, belly boxes, pull-out platforms or steps for side door access, and drop-deck designs. See 40 CFR 1037.107 and 49 CFR 535.5(e).

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   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:

   --Long box (longer than 50 feet \213\) dry vans

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   \213\ Most long trailers are 53 feet in length; we are proposing a cut-point of 50 feet to avoid an unintended incentive for an OEM to slightly shorten a trailer design in order to avoid the new regulatory requirements.

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   --Long box (longer than 50 feet) refrigerated vans

   --Short box (50 feet and shorter) dry vans

   --Short box (50 feet and shorter) refrigerated vans

   --Partial-aero long box dry vans

   --Partial-aero long box refrigerated vans

   --Partial-aero short box dry vans

   Page 40257

   --Partial-aero short box refrigerated vans

   --Non-aero box vans (all lengths of dry and refrigerated vans)

   --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.

   (2) 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.\214\ 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).

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   \214\ These stages are consistent with NHTSA's stability requirements under EISA.

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   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 1,000 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 and request comment on this provision.\215\

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   \215\ The agencies are not proposing provisions to allow averaging for non-box trailers, non-aero box trailers, or partial-

   aero box trailers, and this reduced flexibility would likely have the effect of requiring compliant tire technologies to be used.

   Table IV-2--Proposed Trailer CO2 and Fuel Consumption Standards for Box Trailers

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   Subcategory Dry van Refrigerated van

   Model year ---------------------------------------------------------------------------------

   Length Long Short Long Short

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

   2018-2020..................... EPA Standard.... 83 144 84 147

   (CO2 Grams per

   Ton-Mile).

   Voluntary NHTSA 8.1532 14.1454 8.2515 14.4401

   Standard.

   (Gallons per

   1,000 Ton-Mile).

   2021-2023..................... EPA Standard.... 81 142 82 146

   (CO2 Grams per

   Ton-Mile).

   NHTSA Standard.. 7.9568 13.9489 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).

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   Page 40258

   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, in the vehicle simulation model we used to develop the proposed standards (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.

   (3) 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.\216\

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   \216\ NHTSA adopted a similar voluntary approach in the first years of Phase 1 (see 76 FR 57106).

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   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.

   (4) 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-

   Page 40259

   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.

   (5) 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 40 CFR 1037.5(g) and 49 CFR 535.3(e)). Furthermore, the proposed regulations do not apply to trailers designed to be drawn by vehicles other than tractors, and those that are coupled to vehicles with pintle hooks or hitches instead of a fifth wheel. 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:

   --Trailers shorter than 35 feet in length with three axles, and all trailers with four or more axles (including any lift axles)

   --Trailers designed to operate at low speeds such that they are unsuitable for normal highway operation

   --Trailers designed to perform their primary function while stationary

   --Trailers intended for temporary or permanent residence, office space, or other work space, such as campers, mobile homes, and carnival trailers

   --Trailers designed to transport livestock

   --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 \217\

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   \217\ Secondary manufacturers who purchase incomplete trailers and complete their construction to serve as trailers are subject to the requirements of 40 CFR 1037.620.

   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.\218\

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   \218\ The agencies are not aware of work-performing equipment that would prevent the use of gap-reducing trailer devices on dry vans of any length; thus dry vans with side and rear equipment could qualify as ``non-aero'' trailers, even if the manufacturer could install a gap-reducing device.

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   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-

   Page 40260

   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.

   (6) 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. NHTSA also proposes to adopt EPA's useful life requirements for trailers to ensure manufacturers consider in the design process the need for fuel efficiency standards to apply for the same duration and mileage as EPA standards. 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.\219\ See Section IV. F. (5) (a) for a discussion of other factors related to trailer useful life.

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   \219\ EPA may perform in-use testing of any vehicle subject to the standards of this part, including trailers. For example, we may test trailers to verify drag areas or other GEM inputs.

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4. 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:

   --Southwest Research Institute evaluation of heavy-duty vehicle fuel efficiency and costs for NHTSA,\220\

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   \220\ Reinhart, T.E. (June 2015). Commercial Medium- and Heavy-

   Duty Truck Fuel Efficiency Technology Study--Report #1. (Report No. DOT HS 812 146). Washington, DC: National Highway Traffic Safety Administration.

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   --2010 National Academy of Sciences report of Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles,\221\

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   \221\ Committee to Assess Fuel Economy Technologies for Medium- and Heavy-Duty Vehicles; National Research Council; Transportation Research Board (2010). Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles. (``The NAS Report'') Washington, DC, The National Academies Press. Available electronically from the National Academy Press Web site at http://www.nap.edu/catalog.php?record_id=12845.

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   --TIAX's assessment of technologies to support the NAS panel report,\222\

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   \222\ TIAX, LLC. ``Assessment of Fuel Economy Technologies for Medium- and Heavy-Duty Vehicles,'' Final Report to National Academy of Sciences, November 19, 2009.

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   --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),\223\

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   \223\ NESCCAF, ICCT, Southwest Research Institute, and TIAX. Reducing Heavy-Duty Long Haul Combination Truck Fuel Consumption and CO2 Emissions. October 2009.

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   --The technology cost analysis conducted by ICF for EPA,\224\ and

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   \224\ ICF International. ``Investigation of Costs for Strategies to Reduce Greenhouse Gas Emissions for Heavy-Duty On-Road Vehicles.'' July 2010. Docket Number EPA-HQ-OAR-2010-0162-0283.

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   --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.

   (1) 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.

   (

   1. 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

      Page 40261

      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

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

      Example Intended impact on

      Location on trailer technologies aerodynamics

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

      Front........................... Front fairings and Reduce cross-flow

      gap-reducing through gap and

      fairings. smoothly

      transition

      airflow from

      tractor to the

      trailer.

      Rear............................ Rear fairings, Reduce pressure

      boat tails and drag induced by

      flow diffusers. the trailer wake.

      Underside....................... Side fairings and Manage flow of air

      skirts, and under the trailer

      underbody devices. 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.

      ``Boat tail'' devices, applied to the rear of a trailer, are typically designed to collapse flat as the trailer rear doors are opened. If the tail structure can remain in the collapsed configuration when the doors are closed, the benefit of the device is lost. The agencies request comment on whether we should require that trailer manufacturers using such devices for compliance with the proposed standards only use designs that automatically deploy when the vehicle is in motion.

      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.

      (b) 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.\225\ 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.

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

      \225\ ``Tires & Truck Fuel Economy: A New Perspective'', The Tire Topic Magazine, Special Edition Four, 2008, Bridgestone Firestone, North American Tire, LLC. Available online: http://www.trucktires.com/bridgestone/us_eng/brochures/pdf/08-Tires_and_Truck_Fuel_Economy.pdf.

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

      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.

      (c) 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.\226\ 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.

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

      \226\ ``Tire Pressure Systems--Confidence Report''. North American Council for Freight Efficiency. 2013. Available online: http://nacfe.org/wp-content/uploads/2014/01/TPS-Detailed-Confidence-Report1.pdf.

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

      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

      Page 40262

      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.\227\

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

      \227\ TMC Future Truck Committee Presentation ``FMCSA Tire Pressure Monitoring Field Operational Test Results,'' February 8, 2011.

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

      (d) 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.

      (2) 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) typically operate as single trailers. To minimize complexity, we are proposing that 28-foot trailers represent all short refrigerated and dry vans for both compliance and for this feasibility analysis. This means that manufacturers would not need to perform tests (or report device manufacturers' test data) of the performance of devices for each trailer length in the short van category. Although this approach would provide a conservative estimate of actual CO2 emissions and fuel consumption reductions for the short van category, the agencies believe that the need to avoid an overly complex compliance program justifies this approach. We request comment on this approach to evaluating short box trailers.

      (

   1. 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.

      Page 40263

      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.\228\ 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.

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

      \228\ The agencies recognize that many 28-foot pup trailers are often operated in tandem. However, we are regulating and evaluating short dry vans as solo trailers since they are sold individually and the short box regulatory subcategories also include trailer sizes not often operated in tandem (e.g., 40-foot and 48-foot trailers).

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

      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

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

      Example technologies

      Bin Delta CdA Average delta ---------------------------------------------

      CDA 53-foot dry van 28-foot dry van

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

      Bin I............................. 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

      Page 40264

      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

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

      (b) 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.\229\ 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.

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

      \229\ Truck Trailer Manufacturers Association letter to EPA. Received on October 16, 2014. Docket EPA-HQ-OAR-2014-0827.

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

      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

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

      CRR (kg/

      Tire rolling resistance level ton)

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

      Baseline..................................................... 6.0

      Level 1...................................................... 5.1

      Level 2...................................................... 4.7

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

      (c) 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.\230\ 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.\231\

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

      \230\ See the Chapter 2.10.2.3 of the draft RIA.

      \231\ Truck Trailer Manufacturers Association letter to EPA. Received on October 16, 2014. Docket EPA-HQ-OAR-2014-0827

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

      (d) 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 1037.515. 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 lbs before a one percent fuel savings is achieved. The component substitutions identified by the agencies result in weight reductions of less than 500 lbs, 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

      Page 40265

      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 1037.515) 232 233 234 235 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 1037.515. 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.

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

      \232\ Scarcelli, Jamie. ``Fuel Efficiency for Trailers'' Presented at ACEEE/ICCT Workshop: Emerging Technologies for Heavy-

      Duty Vehicle Fuel Efficiency, Wabash National Corporation. July 22, 2014.

      \233\ ``Weight Reduction: A Glance at Clean Freight Strategies'', EPA SmartWay. EPA420F09-043. Available at: http://permanent.access.gpo.gov/gpo38937/EPA420F09-043.pdf.

      \234\ Memorandum dated June 2015 regarding confidential weight reduction information obtained during SBREFA Panel. Docket EPA-HQ-

      OAR-2014-0827.

      \235\ Randall Scheps, Aluminum Association, ``The Aluminum Advantage: Exploring Commercial Vehicles Applications,'' presented in Ann Arbor, Michigan, June 18, 2009.

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

      (3) 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.

      (

   1. 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 g/ton-mile and gal/1000 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,...... 2018 MY 15L,...... 2018 MY 15L,...... 2018 MY 15L,...... 2018 MY 15L,...... 2018 MY 15L,

      455 HP............ 455 HP............ 455 HP............ 455 HP............ 455 HP............ 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)............... 31,978............ 21,028............ 33,778............ 22,828............ 21,028............ 29,710

      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%

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

      (b) 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) .

      Page 40266

      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 (lbs):

      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 lbs). 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

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

      Dry van Refrigerated van

      Aerodynamics Delta CDA (m\2\) ---------------------------------------------------------------

      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

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

      (c) 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).236 237 238 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

      Page 40267

      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.

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

      \236\ Truck Trailer Manufacturers Association letter to EPA. Received on October 16, 2014. Docket EPA-HQ-OAR-2014-0827.

      \237\ Ben Sharpe (ICCT) and Mike Roeth (North American Council for Freight Efficiency), ``Costs and Adoption Rates of Fuel-Saving Technologies for Trailer in the North American On-Road Freight Sector'', Feb 2014.

      \238\ Frost & Sullivan, ``Strategic Analysis of North American Semi-trailer Advanced Technology Market'', Feb 2013.

      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\) 0.2 0.3 0.3 0.3 0.0

      \a\....................

      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 (lbs):

      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.\239\ 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.

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

      \239\ Daimler Truck North America. SuperTruck Program Vehicle Project Review. June 19, 2014. Docket EPA-HQ-OAR-2014-0827.

      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 ..............

      Page 40268

      Bin IV.............................................. 30 34 37 40 55 ..............

      Bin V............................................... 5 5 5 5 5 ..............

      Bin VI.............................................. .............. .............. .............. .............. .............. ..............

      Bin VII............................................. .............. .............. .............. .............. .............. ..............

      Bin VIII............................................ .............. .............. .............. .............. .............. ..............

      Average Delta C DA (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 (lbs):

      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.

      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 (g/ton-mile)...................... 85 147 87 151

      Fuel Consumption (gal/1000 ton-miles)........... 8.3497 14.4401 8.5462 14.8330

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

      (d) 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

      Page 40269

      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...............