Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

Under its Clean Air Act authority, the Environmental Protection Agency (EPA) is proposing new, more stringent emissions standards for criteria pollutants and greenhouse gases (GHG) for light-duty vehicles and Class 2b and 3 (“medium-duty”) vehicles that would phase-in over model years 2027 through 2032. In addition, EPA is proposing GHG program revisions in several areas, including off-cycle and air conditioning credits, the treatment of upstream emissions associated with zero-emission vehicles and plug-in hybrid electric vehicles in compliance calculations, medium-duty vehicle incentive multipliers, and vehicle certification and compliance. EPA is also proposing new standards to control refueling emissions from incomplete medium-duty vehicles, and battery durability and warranty requirements for light-duty and medium-duty plug-in vehicles. EPA is also proposing minor amendments to update program requirements related to aftermarket fuel conversions, importing vehicles and engines, evaporative emission test procedures, and test fuel specifications for measuring fuel economy.

DATES:

Comments: Written comments must be received on or before July 5, 2023.

Comments on the information collection provisions submitted to the Office of Management and Budget (OMB) under the Paperwork Reduction Act (PRA) are best assured of consideration by OMB if OMB receives a copy of your comments on or before June 5, 2023.

Public Hearing: EPA will announce information regarding the public hearing for this proposal in a supplemental Federal Register document.

ADDRESSES:

You may send comments, identified by Docket ID No. EPA–HQ–OAR–2022–0829, by any of the following methods:

• Federal eRulemaking Portal: https://www.regulations.gov/ (our preferred method). Follow the online instructions for submitting comments.

• Email: a-and-r-Docket@epa.gov. Include Docket ID No. EPA–HQ–OAR–2022–0829 in the subject line of the message.

• Mail: U.S. Environmental Protection Agency, EPA Docket Center, OAR, Docket EPA–HQ–OAR–2022–0829, Mail Code 28221T, 1200 Pennsylvania Avenue NW, Washington, DC 20460.

• Hand Delivery or Courier (by scheduled appointment only): EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004. The Docket Center's hours of operations are 8:30 a.m.–4:30 p.m., Monday–Friday (except Federal Holidays).

Instructions: All submissions received must include the Docket ID No. for this rulemaking. Comments received may be posted without change to https://www.regulations.gov/ , including any personal information provided. For detailed instructions on sending comments and additional information on the rulemaking process, see the “Public Participation” heading of the SUPPLEMENTARY INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT:

Michael Safoutin, Office of Transportation and Air Quality, Assessment and Standards Division (ASD), Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734) 214–4348; email address: Safoutin.Mike@epa.gov.

SUPPLEMENTARY INFORMATION:

A. Public Participation

Written Comments

EPA will keep the comment period open until July 5, 2023. All information will be available for inspection at the EPA Air Docket No. EPA–HQ–OAR–2022–0829. Submit your comments, identified by Docket ID No. EPA–HQ–OAR–2022–0829, at https://www.regulations.gov (our preferred method), or the other methods identified in the ADDRESSES section. Once submitted, comments cannot be edited or removed from the docket. EPA may publish any comment received to its public docket. Do not submit to EPA's docket at https://www.regulations.gov any information you consider to be Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Multimedia submissions (audio, video, etc.) must be accompanied by a written comment. The written comment is considered the official comment and should include discussion of all points you wish to make. EPA will generally not consider comments or comment contents located outside of the primary submission ( i.e., on the web, cloud, or other file sharing system). For additional submission methods, the full EPA public comment policy, information about CBI or multimedia submissions, and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets .

Public Hearing

Please refer to the separate Federal Register notice issued by EPA for public hearing details. The hearing notice is available at https://www.epa.gov/regulations-emissions-vehicles-and-engines/proposed-rule-multi-pollutant-emissions-standards-model . Please also refer to this website for any updates regarding the hearings. EPA does not intend to publish additional documents in the Federal Register announcing updates.

B. Does this action apply to me?

Entities potentially affected by this proposed rule include light-duty vehicle manufacturers, independent commercial importers, alternative fuel converters, and manufacturers and converters of medium-duty vehicles ( i.e., vehicles between 8,501 and 14,000 pounds gross vehicle weight rating (GVWR)). Potentially affected categories and entities include:

This list is not intended to be exhaustive, but rather provides a guide regarding entities potentially affected by this action. To determine whether particular activities may be regulated by this action, you should carefully examine the regulations. You may direct questions regarding the applicability of this action to the person listed in FOR FURTHER INFORMATION CONTACT .

C. Did EPA conduct a peer review before issuing this proposed action?

This proposed regulatory action was supported by influential scientific information. EPA therefore conducted peer review in accordance with OMB's Final Information Quality Bulletin for Peer Review. Specifically, we conducted peer review on five analyses: (1) Optimization Model for reducing Emissions of Greenhouse gases from Automobiles (OMEGA 2.0), (2) Advanced Light-duty Powertrain and Hybrid Analysis (ALPHA3), (3) Motor Vehicle Emission Simulator (MOVES), (4) The Effects of New-Vehicle Price Changes on New- and Used-Vehicle Markets and Scrappage; (5) Literature Review on U.S. Consumer Acceptance of New Personally Owned Light-Duty Plug-in Electric Vehicles. All peer review was in the form of letter reviews conducted by a contractor. The peer review reports for each analysis are in the docket for this action and at EPA's Science Inventory ( https://cfpub.epa.gov/si/ ).

Table of Contents

I. Executive Summary

A. Purpose of This Proposed Rule and Legal Authority

B. Summary of Proposed Light- and Medium-Duty Vehicle Emissions Programs

C. Summary of Emission Reductions, Costs, and Benefits

D. What are the alternatives that EPA is considering?

II. Public Health and Welfare Need for Emission Reductions

A. Climate Change From GHG Emissions

B. Background on Criteria and Air Toxics Pollutants Impacted by This Proposal

C. Health Effects Associated With Exposure to Criteria and Air Toxics Pollutants

D. Welfare Effects Associated With Exposure to Criteria and Air Toxics Pollutants Impacted by the Proposed Standards

III. EPA Proposal for Light- and Medium-Duty Vehicle Standards for Model Years 2027 and Later

A. Introduction and Background

B. Proposed GHG Standards for Model Years 2027 and Later

C. Proposed Criteria and Toxic Pollutant Emissions Standards for Model Years 2027–2032

D. Proposed Modifications to the Medium-Duty Passenger Vehicle Definition

E. What alternatives did EPA consider?

F. Proposed Certification, Compliance, and Enforcement Provisions

G. Proposed On-Board Diagnostics Program Updates

H. Coordination With Federal and State Partners

I. Stakeholder Engagement

IV. Technical Assessment of the Proposed Standards

A. What approach did EPA use in analyzing potential standards?

B. EPA's Approach to Considering the No Action Case and Sensitivities

C. How did EPA consider technology feasibility and related issues?

D. Projected Compliance Costs and Technology Penetrations

E. Sensitivities—LD GHG Compliance Modeling

F. Sensitivities—MD GHG Compliance Modeling

V. EPA's Basis That the Proposed Standards Are Feasible and Appropriate Under the Clean Air Act

A. Overview

B. Consideration of Technological Feasibility, Compliance Costs and Lead Time

C. Consideration of Emissions of GHGs and Criteria Air Pollutants

D. Consideration of Impacts on Consumers, Energy, Safety and Other Factors

E. Selection of Proposed Standards Under CAA 202(a)

VI. How would this proposal reduce GHG emissions and their associated effects?

A. Estimating Emission Inventories in OMEGA

B. Impact on GHG Emissions

C. Global Climate Impacts Associated With the Proposal's GHG Emissions Reductions

VII. How would the proposal impact criteria and air toxics emissions and their associated effects?

A. Impact on Emissions of Criteria and Air Toxics Pollutants

B. How would the proposal affect air quality?

VIII. Estimated Costs and Benefits and Associated Considerations

A. Summary of Costs and Benefits

B. Vehicle Cost and Fueling Impacts

C. U.S. Vehicle Sales Impacts

D. Greenhouse Gas Emission Reduction Benefits

E. Criteria Pollutant Health and Environmental Benefits

F. Other Impacts Including Maintenance and Repair

G. Energy Security Impacts

H. Employment Impacts

I. Environmental Justice

J. Additional Non-Monetized Considerations Associated With Benefits and Costs: Energy Efficiency Gap

IX. Consideration of Potential Fuels Controls for a Future Rulemaking

A. Impacts of High-Boiling Components on Emissions

B. Survey of High-Boiling Materials in Market Gasoline

C. Sources of High-Boiling Compounds in Gasoline Production and How Reductions Might Occur

D. Methods of Compliance Determination

E. Structure and Costs of Standards

F. Estimated Emissions and Air Quality Impacts

X. Statutory and Executive Order Reviews

A. Executive Order 12866: “Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review”

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132: “Federalism”

F. Executive Order 13175: “Consultation and Coordination With Indian Tribal Governments”

G. Executive Order 13045: “Protection of Children From Environmental Health Risks and Safety Risks”

H. Executive Order 13211: “Energy Effects”

I. National Technology Transfer and Advancement Act (NTTAA) and 1 CFR Part 51

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

XI. Statutory Provisions and Legal Authority

I. Executive Summary

A. Purpose of This Proposed Rule and Legal Authority

1. Proposal for Light- and Medium-Duty Multipollutant Standards for Model Years 2027 and Later

The Environmental Protection Agency (EPA) is proposing multipollutant emissions standards for light-duty passenger cars and light trucks and Class 2b and 3 vehicles (“medium-duty vehicles” or MDVs) under its authority in section 202(a) of the Clean Air Act (CAA), 42 U.S.C. 7521(a). The proposed program would establish new, more stringent vehicle emissions standards for criteria pollutant and greenhouse gas (GHG) emissions from motor vehicles for model years (MYs) 2027 through 2032.

Section 202(a) requires EPA to establish standards for emissions of air pollutants from new motor vehicles which, in the Administrator's judgment, cause or contribute to air pollution which may reasonably be anticipated to endanger public health or welfare. Standards under section 202(a) 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.” Thus, in establishing or revising section 202(a) standards designed to reduce air pollution that endangers public health and welfare, EPA also must consider issues of technological feasibility, the cost of compliance, and lead time. EPA also may consider other factors, and in previous vehicle standards rulemakings, as well as in this proposal, has considered the impacts of potential standards on emissions of air pollutants and associated public health and welfare effects, impacts on the automotive industry, impacts on the vehicle purchasers/consumers, oil conservation, energy security and other energy impacts, safety, and other relevant considerations.

EPA has conducted outreach with a wide range of interested stakeholders to gather input which we have considered in developing this proposal, and we will continue to engage with the public and all interested stakeholders as part of our regulatory development process.

2. Why does EPA believe the proposed standards are appropriate under the CAA?

i. Need for Continued Emissions Reductions Under 202(a) of the Clean Air Act

In 2014, EPA finalized criteria pollutant standards for light-duty vehicles (“Tier 3”) that were designed to be implemented alongside the GHG standards for light-duty vehicles that EPA had adopted in 2012 for model years 2017–2025. In 2020, EPA revised the GHG standards that had previously been adopted for model years 2021–2026, and in 2021, EPA proposed and finalized a rulemaking (the “2021 rulemaking”) that again revised GHG standards for light-duty passenger cars and light trucks for MYs 2023 through 2026, setting significantly more stringent standards for those MYs than had been set by the 2020 rulemaking, and somewhat more stringent than the standards adopted in 2012.

Despite the significant emissions reductions achieved by these and other rulemakings, air pollution from motor vehicles continues to impact public health, welfare, and the environment. On August 5, 2021, Executive Order 14037, “Strengthening American Leadership in Clean Cars and Trucks,” directed the Administrator to consider beginning work on a rulemaking to establish new multi-pollutant emissions standards, including both criteria pollutant and GHG emissions, for light- and medium-duty vehicles beginning with MY 2027 and extending through and including at least MY 2030. The Administrator determined that there was a need to begin work on such a rulemaking and accordingly is issuing this proposal.

Motor vehicle emissions contribute to ozone, particulate matter (PM), and air toxics, which are linked with premature death and other serious health impacts, including respiratory illness, cardiovascular problems, and cancer. This air pollution affects people nationwide, as well as those who live or work near transportation corridors. In addition, there is consensus that the effects of climate change represent a rapidly growing threat to human health and the environment, and are caused by GHG emissions from human activity, including motor vehicle transportation. Recent trends and developments in emissions control technology, including vehicle electrification and other advanced vehicle technologies, indicate that more stringent emissions standards are feasible at reasonable cost and would achieve significant improvements in public health and welfare. Addressing these public health and welfare needs will require substantial additional reductions in criteria pollutants and GHG emissions from the transportation sector.

Addressing the public health impacts of criteria pollutants (including particulate matter (PM), ozone, nitrogen oxides (NO_X), and carbon monoxide (CO)) will require continued reductions in these pollutants from the transportation sector. In 2023, mobile sources will account for approximately 54 percent of anthropogenic NO_X emissions, 5 percent of anthropogenic direct PM_2.5 emissions, and 19 percent of anthropogenic volatile organic compound (VOC) emissions. Light- and medium-duty-vehicles will account for approximately 20 percent, 19 percent, and 41 percent of 2023 mobile source NO_X, PM_2.5, and VOC emissions, respectively.^{4 5 6} The benefits of reductions in criteria pollutant emissions accrue broadly across many populations and communities. There are currently 15 PM_2.5 nonattainment areas with a population of more than 32 million people and 57 ozone nonattainment areas with a population of more than 130 million people. The importance of continued reductions in these emissions is detailed at length in Section II.

The transportation sector is the largest U.S. source of GHG emissions, representing 27.2 percent of total GHG emissions. Within the transportation sector, light-duty vehicles are the largest contributor, at 57.1 percent, and thus comprise 15.5 percent of total U.S. GHG emissions, even before considering the contribution of medium-duty Class 2b and 3 vehicles which are also included under this rule. GHG emissions have significant impacts on public health and welfare as evidenced by the well-documented scientific record and as set forth in EPA's Endangerment and Cause or Contribute Findings under section 202(a) of the CAA. Additionally, major scientific assessments continue to be released that further advance our understanding of the climate system and the impacts that GHGs have on public health and welfare both for current and future generations, as discussed in Section II.A, making it clear that continued GHG emission reductions in the motor vehicle sector are needed to protect public health and welfare.

In addition to and separate from this proposal, the Administration has recognized the need for action to address climate change. Executive Order 14008 (“Tackling the Climate Crisis at Home and Abroad,” January 27, 2021) recognizes the need for a government-wide approach to addressing the climate crisis, directing Federal departments and agencies to facilitate the organization and deployment of such an effort. On April 22, 2021, the Administration announced a new target for the United States to achieve a 50 to 52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030, consistent with the goal of limiting global warming to no more than 1.5 degrees Celsius by 2050 and representing the U.S. Nationally Determined Contribution (NDC) under the Paris Agreement. These actions, while they do not inform the standards proposed here, serve to underscore the importance of the EPA's Clean Air Act authority to address pollution from motor vehicles.

Also separately from this proposal, the Administration has recognized the recent industry advancements in zero-emission vehicle technologies and their potential to bring about dramatic reductions in emissions. Executive Order 14037 (“Strengthening American Leadership in Clean Cars and Trucks,” August 5, 2021) identified a goal for 50 percent of U.S. new vehicle sales to be zero-emission vehicles by 2030. Congress passed the Bipartisan Infrastructure Law (BIL) in 2021, and the Inflation Reduction Act (IRA) in 2022, which together provide further support for a government-wide approach to reducing emissions by providing significant funding and support for air pollution and GHG reductions across the economy, including specifically, for the component technology and infrastructure for the manufacture, sales, and use of electric vehicles.

These industry advancements in the production and sales of zero- and near-zero emission vehicles are already occurring both domestically and globally, due to significant investments from automakers, greatly increased acceptance by consumers, and added support from Congress, state governments, the European Union and other countries. EPA recognizes that these industry advancements, along with the additional support provided by the BIL and the IRA, represent an important opportunity for achieving the public health goals of the Clean Air Act. As the term “zero-emission vehicle” suggests, these cars and trucks have zero GHG and criteria pollutant emissions from their tailpipes, which can represent significant reductions over current emissions (particularly for GHG). In part because this technology reduces both GHG and criteria pollutant emissions, EPA finds it appropriate to set new standards for model years after 2026 for both criteria pollutants and GHG at this time, rather than continuing its prior approach of coordinating the standards but setting them in separate regulatory actions. Although EPA is proposing to set GHG and criteria pollutant standards in a single rulemaking, these standards are being proposed to meet distinct needs for control of distinct pollutants based on EPA's assessment of the available control technologies for those pollutants, recognizing that some of the available control technologies may overlap.

Likewise, it is important to recognize that, despite this anticipated growth in zero-emission vehicles, many internal combustion engine (ICE) vehicles will continue to be sold during the time frame of the rule and will remain on the road for many years afterward. In addition, some vehicle manufacturers have made public statements that some portion of their light-duty sales will remain ICE-based for the foreseeable future, predominantly in large SUVs and pickup trucks. EPA anticipates that a compliant fleet under the proposed standards will include a diverse range of technologies, including higher penetrations of advanced gasoline technologies as well as zero-emission vehicles. It is therefore important to consider the environmental and other implications of the ICE portion of the fleet.

The Administrator finds that the standards proposed herein are consistent with EPA's responsibilities under the CAA and appropriate under CAA section 202(a). EPA has carefully considered the statutory factors, including technological feasibility and cost of the proposed standards and the available lead time for manufacturers to comply with them. Based on our analysis, it is our assessment that the proposed standards are appropriate and justified under section 202(a) of the CAA. Our analysis for this proposal supports the preliminary conclusion that the proposed standards are technologically feasible and that the costs of compliance for manufacturers would be reasonable. The proposed standards would result in significant reductions in emissions of criteria pollutants, GHGs, and air toxics, resulting in significant benefits for public health and welfare. We also estimate that the proposal would result in reduced vehicle operating costs for consumers and that the benefits of the proposed program would significantly exceed the costs.

ii. Recent and Ongoing Advancements in Technology Enable Further Emissions Reductions

In designing the scope, structure, and stringency of the proposed standards, the Administrator considered previous rulemakings, as well as the increasing availability of vehicle technologies that can be utilized by manufacturers to further reduce emissions. This proposal continues EPA's longstanding approach of establishing an appropriate and achievable trajectory of emissions reductions by means of performance-based standards, for both criteria pollutant and GHG emissions, that can be achieved by employing feasible and available emissions-reducing vehicle technologies for the model years for which the standard will apply.

CAA section 202(a) directs EPA to regulate emissions of air pollutants from new motor vehicles and engines, which in the Administrator's judgment cause or contribute to air pollution that may reasonably be anticipated to endanger public health or welfare. While standards promulgated pursuant to CAA section 202(a) are based on application of technology, the statute does not specify a particular technology or technologies that must be used to set such standards; rather, Congress has authorized and directed EPA to adapt its standards to emerging technologies. Thus, as with prior rules, EPA is assessing the feasibility of new standards in light of current and anticipated progress by automakers in developing and deploying new technologies. The levels of stringency in this proposal continue the trend of increased emissions reductions which have been adopted by prior EPA rules. The Tier 3 standards achieved reductions of up to 80 percent in tailpipe criteria pollutant emissions by treating the engine and fuel as an integrated system and requiring cleaner fuel as well as improved catalytic emissions control systems. Compliance with the EPA GHG standards over the past decade has been achieved predominantly through the application of advanced technologies to internal-combustion engine (ICE) vehicles. In that same time frame, as the EPA GHG standards have increased in stringency, automakers have relied to a greater degree on a range of electrification technologies, including hybrid electric vehicles (HEVs) and, in recent years, plug-in electric vehicles (PEVs) which include plug-in hybrid electric vehicles (PHEVs) and battery-electric vehicles (BEVs). As these technologies have been advancing rapidly in just the past several years, and battery costs have continued to decline, automakers have begun to include BEVs and PHEVs as an integral and growing part of their current and future product lines, leading to an increasing diversity of these clean vehicles planned for high-volume production. As a result, zero- and near-zero emission technologies are more feasible and cost-effective now than at the time of prior rulemakings.

These industry developments in vehicle electrification are driven by a number of factors, including the need to compete in a diverse market, as zero-emission transportation policies continue to be implemented across the world. An increasing number of U.S. states have taken actions to shift the light-duty fleet toward zero-emissions technology. In 2022, California finalized the Advanced Clean Cars II rule that will require, by 2035, all new light-duty vehicles sold in the state to be zero-emission vehicles, with New York, Massachusetts, and Washington state following suit, likely to be followed by Oregon and Vermont as well. Several other states may adopt similar provisions as members of the International Zero-Emission Vehicle Alliance. In addition to the U.S., auto manufacturers also compete in a global market that is becoming increasingly electrified. Globally, at least 20 countries, as well as numerous local jurisdictions, have announced targets for shifting all new passenger car sales to zero-emission vehicles in the coming years, including Norway (2025); Austria, the Netherlands, Denmark, Iceland, India, Ireland, Israel, Scotland, Singapore, Sweden, and Slovenia (2030); Canada, Chile, Germany, Thailand, and the United Kingdom (2035); and France, Spain, and Sri Lanka (2040). Many of these announcements extend to light commercial vehicles as well, and several also target a shift to 100 percent all-electric medium- and heavy-duty vehicle sales (Norway targeting 2030, Austria 2035, and Canada and the United Kingdom 2040).

Together, the countries that through mid-2022 had set a target of 100 percent light-duty zero-emission vehicle sales by 2035 represented at least 25 percent of today's global light-duty vehicle market. In addition, in February 2023 the European Union gave preliminary approval to a measure to phase out sales of ICE passenger vehicles in its 27 member countries by 2035. In 2021, BEVs and PHEVs together already comprised about 18 percent of the new vehicle market in Western Europe, led by Norway which reached 64.5 percent BEV and 86.2 percent combined BEV and PHEV sales in 2021, increasing to 79.3 percent BEV and 87.8 percent combined BEV and PHEV sales in 2022.

Recent trends in market penetration of zero and near-zero emission vehicles suggest that demand for these vehicles in the U.S. is rapidly increasing. Even under current standards, the production of new PEVs (including both BEVs and PHEVs) is growing rapidly and roughly doubling every year, projected to be 8.4 percent of U.S. light-duty vehicle production in MY 2022, up from 4.4 percent in MY 2021 and 2.2 percent in MY 2020. In 2022, BEVs alone accounted for about 807,000 U.S. new car sales, or about 5.8 percent of the new light-duty passenger vehicle market, up from 3.2 percent BEVs the year before. In California, new light-duty zero-emission vehicle (ZEV) sales in 2022 reached 18.8 percent of all new cars, up from 12.4 percent in 2021 and more than twice the share from 2020.

Before the Inflation Reduction Act (IRA) became law, analysts were already projecting that significantly increased penetration of plug-in electric vehicles would occur in the United States and in global markets. For example, in 2021, IHS Markit predicted a nearly 40 percent U.S. PEV share by 2030. More recent projections by Bloomberg New Energy Finance suggest that under current policy and market conditions, and prior to the IRA, the U.S. was on pace to reach 40 to 50 percent PEVs by 2030. When adjusted for the effects of the Inflation Reduction Act, this estimate increases to 52 percent. Another study by the International Council on Clean Transportation (ICCT) and Energy Innovation that includes the effect of the IRA estimates that the share of BEVs will increase to 56 to 67 percent by 2032. These projections typically are based on assessment of a range of existing and developing factors, including state policies (such as the California Advanced Clean Cars II program and its adoption by Section 177 states); although the assumptions and other inputs to these forecasts vary, they point to greatly increased penetration of electrification across the U.S. light-duty fleet in the coming years, without specifically considering the effect of increased emission standards under this proposed rule.

These trends echo an ongoing global shift toward electrification. Global light-duty passenger PEV sales (including BEVs and PHEVs) reached 6.6 million in 2021, bringing the total number of PEVs on the road to more than 16.5 million globally. For fully-electric BEVs, global sales rose to 7.8 million in 2022, an increase of about 68 percent from the previous year and representing about 10 percent of the new global light-duty passenger vehicle market. Leading sales forecasts predict that BEV sales will continue to accelerate globally in the years to come. For example, in June 2022, Bloomberg New Energy Finance predicted that global sales will rise to 21 million in 2025 (implying an annual growth rate of about 39 percent from 2022), with total global vehicle stock reaching 77 million BEVs by 2025 and 229 million BEVs by 2030.

The year-over-year growth in U.S. PEV sales suggests that an increasing share of new vehicle buyers are concluding that a PEV is the best vehicle to meet their needs. Many of the zero-emission vehicles already on the market today cost less to operate than ICE vehicles, offer improved performance and handling, have a driving range similar to that of ICE vehicles, and can be charged at a growing network of public chargers as well as at home. PEV owners often describe these advantages as key factors motivating their purchase. A 2022 survey by Consumer Reports shows that more than one third of Americans would either seriously consider or definitely buy or lease a BEV today, if they were in the market for a vehicle. Given that most consumers are currently much less familiar with BEVs than with ICE vehicles, this share is likely to rapidly grow as familiarity increases in response to increasing numbers of BEVs on the road and growing visibility of charging infrastructure. Most PEV owners who purchase a subsequent vehicle choose another PEV, and often express resistance to returning to an ICE vehicle after experiencing PEV ownership.

Recent literature indicates that consumer affinity for PEVs is strong. A recent study utilizing data from all new light-duty vehicles sold in the U.S. between 2014 and 2020, focused on comparisons of BEVs with their closest ICE counterparts, found that BEVs are preferred to the ICE counterpart in some segments. In addition, when comparing all BEV sales with sales of the closest ICE counterparts, BEVs attain a market share of over 30 percent, which is significantly greater than the BEV market share among all vehicles. This suggests that the share of PEVs in the marketplace is, at least partially, constrained due to the lack of offerings needed to convert existing demand into market share. However, the number and diversity of electrified vehicle models is rapidly increasing. For example, the number of PEV models available for sale in the U.S. has more than doubled from about 24 in MY 2015 to about 60 in MY 2021, with offerings in a growing range of vehicle segments. Recent announcements indicate that this number will increase to more than 80 models by MY 2023, and more than 180 models by 2025.

According to the U.S. Bureau of Labor Statistics, growth in PEV sales is driven in part by growing consumer demand and growing automaker commitments to electrification and will be further supported by policy measures including the Bipartisan Infrastructure Law and the Inflation Reduction Act. As the presence of PEVs in the fleet increases, consumers are encountering PEVs more often in their daily experience. Many analysts believe that as PEVs continue to increase their market share, PEV ownership will continue to broaden its appeal as consumers gain more exposure and experience with the technology and with the benefits of PEV ownership, with some analysts suggesting that a “tipping point” for PEV adoption may then result.

While the retail price of PEVs is typically higher than for comparable ICE vehicles at this time, the price difference is widely expected to narrow or disappear, particularly for BEVs, as the cost of batteries and other components fall in the coming years. Among the many studies that address cost parity of BEVs vs. ICE vehicles, an emerging consensus suggests that purchase price parity is likely to occur by the mid-2020s for some vehicle segments and models, and for a broader segment of the market on a total cost of ownership (TCO) basis. By some accounts, a compact car with a relatively small battery (for example, a 40 kWh battery and approximately 150 miles of range) may already be possible to produce and sell for the same price as a compact ICE vehicle. For larger vehicles and/or those with a longer range (either of which call for a larger battery), many analysts expect examples of price parity to increasingly appear over the mid- to late-2020s. Assessments of price parity often do not include the effect of various state and Federal purchase incentives. For example, the Clean Vehicle Credit provides up to $7,500, under the Inflation Reduction Act, effectively making some BEVs more affordable to buy and operate today than comparable ICE vehicles. Many expect TCO parity to precede price parity by several years, as it accounts for the reduced cost of operation and maintenance for BEVs. For example, Kelley Blue Book already estimates that the vehicle with lowest TCO in both the full-size pickup and luxury car classes of vehicle is a BEV. TCO parity is of particular interest to commercial and fleet operators, for whom lower TCO is a compelling business consideration.

A proliferation of announcements by automakers in the past two years signals a rapidly growing shift in product development focus among automakers away from internal-combustion technologies and toward electrification. For example, in January 2021, General Motors announced plans to become carbon neutral by 2040, including an effort to shift its light-duty vehicles entirely to zero-emissions by 2035. In March 2021, Volvo announced plans to make only electric cars by 2030, and Volkswagen announced that it expects half of its U.S. sales will be all-electric by 2030. In April 2021, Honda announced a full electrification plan to take effect by 2040, with 40 percent of North American sales expected to be fully electric or fuel cell vehicles by 2030, 80 percent by 2035 and 100 percent by 2040. In May 2021, Ford announced that they expect 40 percent of their global sales will be all-electric by 2030. In June 2021, Fiat announced a move to all electric vehicles by 2030, and in July 2021 its parent corporation Stellantis announced an intensified focus on electrification across all of its brands. Also in July 2021, Mercedes-Benz announced that all of its new architectures would be electric-only from 2025, with plans to become ready to go all-electric by 2030 where possible. In December 2021, Toyota announced plans to introduce 30 BEV models by 2030. Figure 1, taken from work by the Environmental Defense Fund and ERM, illustrates how these and other announcements mean that virtually every major manufacturer of light-duty vehicles is already planning to introduce widespread electrification across their global fleets in the coming years.

Accompanying this global-market focus on electrification, as shown in Figure 2, the number of PHEV and BEV models available in the U.S. has steadily grown, and a large number of public model announcements by manufacturers indicate further steep growth will occur in the years to come.

Globally and domestically, these ongoing announcements indicate a strong industry momentum toward electrification that is common to every major manufacturer. Given the breadth of these announcements, it is instructive to consider the penetrations of PEVs that they imply when taken collectively.

Table 1 compiles public announcements of U.S. and global electrification targets to date by major manufacturers. Assuming that the MY 2022 U.S. sales shares for each manufacturer were to persist in 2030, these targets would collectively imply a U.S. PEV sales share approaching 50 percent in 2030 (48.6 percent), consisting primarily of BEVs.

While manufacturer announcements such as these are not binding, and often are conditioned as forward-looking and subject to uncertainty, they indicate that manufacturers are confident in the suitability of PEV technology as an effective and attractive option that can serve the functional needs of a large portion of light-duty vehicle buyers.

As seen in Figure 3, an analysis by the International Energy Agency similarly concludes that the 2030 U.S. zero-emission vehicle sales share collectively implied by such announcements (“range of OEM declarations”) would amount to nearly 50 percent if not more, far exceeding the 20 percent that IEA considers sufficient to meet existing U.S. policies and regulations (“Stated Policies” scenario).

Fleet electrification plans are not limited to light-duty vehicles. Numerous commitments to purchase all-electric medium-duty delivery vans have been announced by large fleet owners including FedEx, Amazon, and Walmart, in partnerships with various OEMs. For example, Amazon has deployed thousands of electric delivery vans in over 100 cities, with the goal of 100,000 vans by 2030. Many other fleet electrification commitments that include large numbers of medium-duty and heavier vehicles have been announced by large corporations in many sectors of the economy, including not only retailers like Amazon and Walmart but also consumer product manufacturers with large delivery fleets ( e.g. IKEA, Unilever), large delivery firms ( e.g. DHL, FedEx, USPS), and numerous firms in many other sectors including power and utilities, biotech, public transportation, and municipal fleets across the country. As another example, Daimler Trucks North America announced in 2021 that it expected 60 percent of its sales in 2030 and 100 percent of its sales by 2039 would be zero-emission.

These announcements and others like them continue a pattern over the past several years in which most major manufacturers have taken steps to aggressively invest in zero-emission technologies and reduce their reliance on the internal-combustion engine in various markets around the globe. According to one analysis, 37 of the world's automakers are planning to invest a total of almost $1.2 trillion by 2030 toward electrification, a large portion of which will be used for construction of manufacturing facilities for vehicles, battery cells and packs, and materials, supporting up to 5.8 terawatt-hours of battery production and 54 million BEVs per year globally. Similarly, an analysis by the Center for Automotive Research shows that a significant shift in North American investment is occurring toward electrification technologies, with $36 billion of about $38 billion in total automaker manufacturing facility investments announced in 2021 being slated for electrification-related manufacturing in North America, with a similar proportion and amount on track for 2022. For example, in September 2021, Toyota announced large new investments in battery production and development to support an increasing focus on electrification, and in December 2021, announced plans to increase this investment. In December 2021, Hyundai closed its engine development division at its research and development center in Namyang, South Korea in order to refocus on BEV development. In summer 2022, Hyundai invested $5.5 billion to fund new battery and electric vehicle manufacturing facilities in Georgia, and recently announced a $1.9 billion joint venture with SK to fund additional battery manufacturing in the U.S.

On August 5, 2021, many of these automakers, as well as the Alliance for Automotive Innovation, expressed continued commitment to their announcements of a shift to electrification, and expressed their support for the goal of achieving 40 to 50 percent sales of zero-emission vehicles by 2030. In September 2022, jointly with the Environmental Defense Fund, General Motors announced a set of recommendations that “seek to accelerate a zero-emissions, all-electric future for passenger vehicles in model year 2027 and beyond,” including a recommendation that EPA establish standards to achieve at least a 60 percent reduction in GHG emissions (compared to MY 2021) and 50 percent zero-emitting vehicles by MY 2030, and that standards be consistent with eliminating tailpipe pollution from new passenger vehicles by 2035. GM and EDF further recommended that the EPA standards extend at least through MY 2032, and that EPA should consider adoption through 2035.

Investments in PEV charging infrastructure have grown rapidly in recent years and are expected to continue to climb. According to BloombergNEF, annual global investment was $62 billion in 2022, nearly twice that of the prior year, and while about 10 years was needed for cumulative investment to total $100 billion, a total of $200 billion could be reached in just three more years. U.S. infrastructure spending has also grown quickly. Combined investments in hardware and installation for U.S. home and public charging ports was over $1.2 billion in 2021, nearly a three-fold increase from 2017.

The U.S. government is making large investments in infrastructure through the Bipartisan Infrastructure Law and the Inflation Reduction Act. However, we expect that private investments will also play a critical role in meeting future infrastructure needs. Private charging companies have already attracted billions globally in venture capital and mergers and acquisitions. In the United States, there was $200 million or more in mergers and acquisition activity in 2022 indicating strong interest in the future of the charging industry. And Bain projects that by 2030, the U.S. market for electric vehicle charging will be “large and profitable” with both revenue and profits estimated to grow by a factor of twenty relative to 2021. Automakers, electric companies, charging network providers, and retailers are among those who have made significant commitments to expand charging infrastructure in the coming years. See Section IV.C.4 of this document and DRIA Chapter 5 for a discussion of public and private infrastructure investments.

Taken together, these developments indicate that proven, zero-emissions technologies such as BEVs, PHEVs, and FCEVs are already poised to become a rapidly growing segment of the U.S. fleet, as manufacturers continue to invest in these technologies and integrate them into their product plans, and infrastructure continues to be developed. Accordingly, EPA considers these technologies to be an available and feasible way to greatly reduce emissions, and expects that these technologies will likely play a significant role in meeting the proposed standards for both criteria pollutants and GHGs.

At the same time, EPA anticipates that a compliant fleet under the proposed standards would include a diverse range of technologies. The advanced gasoline technologies that have played a fundamental role in meeting previous standards will continue to play an important role going forward as they remain key to reducing the criteria and GHG emissions of ICE, mild hybrid (MHEV), and strong HEV powertrains as well as PHEVs. The proposed standards will also provide regulatory certainty to support the many private automaker announcements and investments in zero-emission vehicles that have been outlined in the preceding paragraphs. In developing the proposed standards, EPA has also considered many of the key issues associated with growth in penetration of zero-emission vehicles, including charging infrastructure, consumer acceptance, critical minerals and mineral security, and others, as well as the need to consider emissions from the many ICE vehicles that will enter the fleet during this time. We discuss each of these issues in more detail in respective sections of the Preamble and Draft Regulatory Impact Analysis (DRIA).

iii. The Bipartisan Infrastructure Law and Inflation Reduction Act

A particular consideration with regard to the increased penetration of zero-emission vehicle technology is Congress' recent passage of the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA). These measures represent significant Congressional support for investment in expanding the manufacture, sale, and use of zero-emission vehicles by addressing elements critical to the advancement of clean transportation and clean electricity generation in ways that will facilitate and accelerate the development, production and adoption of zero-emission technology during the time frame of the rule.

The BIL became law in November 2021 and includes a wide range of programs and significant funding for infrastructure investments, many of which are oriented toward reducing GHG emissions across the U.S. transportation network, upgrading power generation infrastructure, and making the transportation infrastructure resilient to climate impacts such as extreme weather. Notably, in support of light-duty zero-emissions transportation the BIL included $7.5 billion in funding for installation of public charging and other alternative fueling infrastructure. This will have a major impact on feasibility of PEVs across the U.S. by improving access to charging and other infrastructure, and it will further support the Administration's goal of deploying 500,000 PEV chargers by 2030. It also includes $5 billion for electrification of school buses through the Clean School Bus Program, providing for further reductions in emissions from the heavy-duty sector. To help ensure that clean vehicles are powered by clean energy, it also includes $65 billion to upgrade the power infrastructure to facilitate increased use of renewables and clean energy.

The IRA became law in August 2022, bringing significant new momentum to clean vehicles (PEVs and FCEVs) through measures that reduce the cost to purchase and manufacture them, incentivize the growth of manufacturing capacity and onshore sourcing of critical minerals needed for their manufacture, incentivize buildout of public charging infrastructure for PEVs, and promote modernization of the electrical grid that will power them. It includes significant purchase incentives of up to $7,500 for new clean vehicles (Clean Vehicle Credit, IRS 30D) and up to $4,000 for used vehicles (IRS 25E), which will have a strong impact on affordability of these vehicles for a wide range of customers. These incentives extend not only to light-duty vehicles but also to commercial purchase of light- and medium-duty vehicles, with a credit of up to $40,000 for the latter (Commercial Clean Vehicle Credit, IRS 45W). Manufacturer production tax incentives of $35 per kilowatt-hour (kWh) for U.S. production of battery cells, $10 per kWh for U.S. production of modules, and 10 percent of production cost for U.S.-made critical minerals and battery active materials (Production Tax Credit, IRS 45X), will significantly reduce the manufacturing cost of these components, further reducing PEV and FCEV cost for consumers. In addition, the IRA includes significant tax credits for certain charging infrastructure equipment, and sizeable incentives for investment in and production of clean electricity.

With respect to sourcing of critical minerals and building a secure supply chain for clean vehicles, the IRA also includes provisions that will greatly reduce reliance on foreign imports by strongly supporting the continued development of a domestic or North American supply chain for these critical products. Manufacturers who want their customers to take advantage of the Clean Vehicle Credit must meet a gradually increasing requirement for sourcing of critical minerals and battery components from U.S. or free-trade countries, and cannot utilize content acquired from foreign entities of concern. Manufacturer eligibility for the Production Tax Credit for cells and modules is conditioned on their manufacture in the U.S., as is eligibility for the 10 percent credit on the cost of producing critical minerals and battery active materials. Manufacturers are already taking advantage of these opportunities to improve their sales and reduce their production costs by securing eligible sources of critical mineral content and siting new production facilities in the U.S. There is a coordinated effort by Executive Branch agencies, including the Department of Energy and the National Laboratories, to provide guidance and resources and to administer funding to support this collective effort to further develop a robust supply chain for clean vehicles and the infrastructure that will support them. Section IV.C.6 of this Preamble and Chapters 3.1.3.2 and 3.1.3.3 of the DRIA discuss these provisions and measures in more detail.

Congressional passage of the BIL and IRA represent pivotal milestones in the creation of a broad-based infrastructure instrumental to the expansion of clean transportation, including light- and medium-duty zero-emission vehicles, and we have taken these developments into account in our assessment of the feasibility of the proposed standards.

B. Summary of Proposed Light- and Medium-Duty Vehicle Emissions Programs

EPA is proposing emissions standards for both light-duty and medium-duty vehicles. The light-duty vehicle category includes passenger cars and light trucks consistent with previous EPA criteria pollutant and GHG rules. In this rule, heavy-duty Class 2b and 3 vehicles are referred to as “medium-duty vehicles” (MDVs) to distinguish them from Class 4 and higher vehicles that remain under the heavy-duty program. EPA has not previously used the MDV nomenclature, referring to these larger vehicles in prior rules as light-heavy-duty vehicles, heavy-duty Class 2b and 3 vehicles, or heavy-duty pickups and vans. In the context of this rule, the MDV category includes primarily large pickups and vans with a gross vehicle weight rating (GVWR) of between 8,501 and 14,000 pounds and excludes vehicles used primarily as passenger vehicles (medium-duty passenger vehicles, or MDPVs).

The proposed program consists of several key elements: More stringent emissions standards for criteria pollutants, more stringent emissions standards for GHGs, changes to certain optional credit programs, durability provisions for light-duty electrified vehicle batteries and warranty provisions for both electrified vehicles and diesel engine-equipped vehicles, and various improvements to several elements of the existing light-duty program that will also apply to the proposed program.

The levels of stringency proposed in this rule for both light- and medium-duty vehicles continue the trend over the past fifty years for criteria pollutants, and over the past decade for GHGs, of EPA establishing numerically lower emissions standards based on continued advancements in emissions control technology that make it possible to achieve important emissions reductions at a reasonable cost. While EPA's feasibility assessments in past rulemakings were predominantly based on advancements in ICE technologies that provided incremental emissions reductions, in this proposal EPA's technology feasibility assessment includes the increasing availability of zero and near-zero tailpipe emissions technologies, including PEVs, as a cost-effective compliance technology. The technological feasibility of PEVs is further bolstered by the economic incentives provided in the IRA and the auto manufacturers' stated plans for producing significant volumes of zero and near-zero emission vehicles in the timeframe of this rule. Because of this increased feasibility of zero and near-zero tailpipe emissions technologies, EPA believes it is appropriate to propose over the six-year timeframe of these standards even lower emissions standards than has been possible in past rulemakings.

1. GHG Emissions Standards

EPA is proposing more stringent GHG standards for both light-duty vehicles and medium-duty vehicles for MYs 2027 through 2032. EPA also seeks comment on whether the standards should continue to increase in stringency for future years, such as through MY 2035. For light-duty vehicles, EPA is proposing standards that would increase in stringency each year over a six-year period, from MYs 2027–2032. The proposed standards are projected to result in an industry-wide average target for the light-duty fleet of 82 grams/mile (g/mile) of CO₂ in MY 2032, representing a 56 percent reduction in projected fleet average GHG emissions target levels from the existing MY 2026 standards.

For medium-duty vehicles, EPA is proposing to revise the existing standard for MY 2027 given the increased feasibility of GHG emissions reducing technologies in this sector in this time frame. EPA's proposed standards for MDVs would increase in stringency year over year from MY 2027 through MY 2032. When phased in, the MDV standards are projected to result in an average target of 275 grams/mile of CO₂ by MY 2032, which would represent a reduction of 44 percent compared to the current MY 2026 standards.

The light-duty CO₂ standards continue to be footprint-based, with separate standards curves for cars and light trucks. EPA has updated its assessment of the footprint standards curves to reflect anticipated changes in the vehicle technologies that we project will be used to meet the standards. EPA also has assessed ways to ensure future fleet mix changes do not inadvertently provide an incentive for manufacturers to change the size or regulatory class of vehicles as a compliance strategy. EPA is proposing to revise the footprint standards curves to flatten the slope of each curve and to narrow the numerical stringency difference between the car and truck curves. The medium-duty vehicle standards continue to be based on a work-factor metric designed for commercially-oriented vehicles, which reflects a combination of payload, towing and 4-wheel drive equipment.

EPA has reassessed certain credit programs available under the existing GHG programs in light of experience with the program implementation to date, trends in technology development, recent related statutory provisions, and other factors. EPA is proposing to revise the air conditioning (AC) credits program in two ways. First, for AC system efficiency credits under the light-duty GHG program, EPA is proposing to limit the eligibility for these voluntary credits for tailpipe CO₂ emissions control to ICE vehicles starting in MY 2027 ( i.e., BEVs would not earn AC efficiency credits because even without such credits they would be counted as zero g/mi CO₂ emissions for compliance calculations). Second, EPA is proposing to remove refrigerant-based AC provisions for both light- and medium-duty vehicles because, under a separate rulemaking, EPA has proposed to disallow the use of high global warming potential refrigerants under the American Innovation and Manufacturing (AIM) Act of 2020.

EPA is also proposing to sunset the off-cycle credits program for both light and medium-duty vehicles as follows. First, EPA proposes to phase out menu-based credits by reducing the menu credit cap year-over-year until it is fully phased out in MY 2031. Specifically, EPA is proposing a declining menu cap of 10/8/6/3/0 g/mile over MYs 2027–2031 such that MY 2030 would be the last year manufacturers could generate optional off-cycle credits. Second, EPA proposes to eliminate the 5-cycle and public process pathways starting in MY 2027. Third, EPA proposes to limit eligibility for off-cycle credits only to vehicles with tailpipe emissions greater than zero ( i.e., vehicle equipped with IC engines) starting in MY 2027.

EPA is not reopening its averaging, banking, and trading provisions, which continue to be a central part of its fleet average standards compliance program and which help manufacturers to employ a wide range of compliance paths. EPA is also not proposing to restore multiplier incentives for BEVs, PHEVs and fuel cell vehicles, which currently end after MY 2024 under existing regulations. EPA is proposing to revise multiplier incentives currently in place for MDVs through MY 2027, established in the heavy-duty Phase 2 rule, to end the multipliers a model year earlier, in MY 2026. EPA is also proposing that the requirement for upstream emissions accounting for BEVs and PHEVs as part of a manufacturer's compliance calculation, which under the current regulations would begin in MY 2027, would be removed under the proposed program; thus, BEVs would continue to be counted as zero grams/mile in a manufacturer's compliance calculation as has been the case since the beginning of the light-duty GHG program in MY 2012.

Finally, EPA also is proposing changes to the provisions for small volume manufacturers ( i.e., production of less than 5,000 vehicles per year) to transition them from the existing approach of unique case-by-case alternative standards to the primary program standards by MY 2032, recognizing that additional lead time is appropriate given their challenges in averaging across limited product lines.

2. Criteria Pollutant Standards

EPA is proposing more stringent emissions standards for criteria pollutants for both light-duty and medium-duty vehicles for MYs 2027–2032. For light-duty vehicles, EPA is proposing non-methane organic gases (NMOG) plus nitrogen oxides (NO_X) standards that would phase-down to a fleet average level of 12 mg/mi by MY 2032, representing a 60 percent reduction from the existing 30 mg/mi standards for MY 2025 established in the Tier 3 rule in 2014. For medium-duty vehicles, EPA is proposing NMOG+NO_X standards that would require a fleet average level of 60 mg/mi by MY 2032, representing a 66 percent to 76 percent reduction from the Tier 3 standards of 178 mg/mi for Class 2b vehicles and 247 mg/mi for Class 3 vehicles. EPA is proposing cold temperature (−7 °C) NMOG+NO_X standards for light- and medium-duty vehicles to ensure robust emissions control over a broad range of operating conditions.

For both light-duty and all medium-duty vehicles, EPA is proposing a particulate matter (PM) standard of 0.5 mg/mi and a requirement that the standard be met across three test cycles, including a cold temperature (−7 °C) test. This proposed standard would revise the existing PM standards established in the 2014 Tier 3 rule. Through the application of readily available emissions control technology and requiring compliance across the broad range of driving conditions represented by the three test cycles, EPA projects the standards will reduce tailpipe PM emissions from ICE vehicles by over 95 percent. In addition to reducing PM emissions, the proposed standards would reduce emissions of mobile source air toxics.

EPA is also proposing requirements to certify compliance with criteria pollutants standards for medium-duty vehicles with high gross combined weight rating (GCWR) under the heavy-duty engine program, changes to medium-duty vehicle refueling emissions requirements for incomplete vehicles, and several NMOG+NO_X provisions aligned with the CARB Advanced Clean Cars II program for light-duty vehicles. EPA is proposing changes to the carbon monoxide and formaldehyde standards for light- and medium-duty vehicles, including at −7 °C. EPA is also proposing to eliminate commanded enrichment for ICE-powered vehicles for power and component protection. Averaging, banking, and trading provisions may be employed within the new program, and with certain limitations, credits may be transferred from the Tier 3 program to provide manufacturers with flexibilities in developing compliance strategies.

In addition to these proposals, EPA is seeking comment on potential future gasoline fuel property standards aimed at further reducing PM emissions, for consideration in a possible subsequent rulemaking, which could provide an important complement to the vehicle standards being proposed in the current action. The proposed emissions standards for new vehicles in model years 2027 and later would achieve significant air quality benefits. However, there is an opportunity to further reduce PM emissions from the existing vehicle fleet, the millions of vehicles that will be produced during the phase-in period of the proposed vehicle standards, as well as millions of nonroad gasoline engines, through changes in market fuel composition. Although EPA has not undertaken sufficient analysis to propose changes to fuel requirements under CAA section 211(c) in this rulemaking and considers such changes beyond the scope of this rulemaking, EPA has begun to consider the possibility of such changes and, in Section IX, EPA describes and requests comment on various aspects of a possible future rulemaking aimed at further PM reductions from these sources via gasoline fuel property standards.

3. Electrified Vehicle Battery Durability and Warranty Provisions

As described in more detail in Section III.F.2, the importance of battery durability in the context of BEVs and PHEVs as an emission control technology is well documented and has been cited by several authorities in recent years. Recognizing that electrified vehicles are playing an increasing role in automakers' compliance strategies, that their durability and reliability are important to achieving the emissions reductions projected by this proposed program, and that emissions credit calculations are based on mileage over a vehicle's full useful life, EPA is proposing new battery durability requirements for light-duty and medium-duty BEVs and PHEVs. In addition, the agency is proposing revised regulations which would include BEV and PHEV batteries and associated electric powertrain components under existing emission warranty provisions. Relatedly, EPA is also proposing the addition of two new grouping definitions for BEVs and PHEVs (monitor family and battery durability family), new reporting requirements, and a new calculation for the PHEV charge depletion test to support the battery durability requirements. The background and content of the proposed battery durability and warranty provisions are outlined in Section III.F.2 of this Preamble and are detailed in the regulatory text.

4. Light-Duty Vehicle Certification and Testing Program Improvements

EPA is proposing various improvements to the current light-duty program in order to clarify, simplify, streamline and update the certification and testing provisions for manufacturers. These proposed improvements include: Clarification of the certification compliance and enforcement requirements for CO₂ exhaust emission standards found in 40 CFR 86.1865–12 to more accurately reflect the intention of the 2010 light-duty vehicle GHG rule; a revision to the In Use Confirmatory Program (IUCP) threshold criteria; changes to the Part 2 application; updating the On Board Diagnostics (OBD) program to the latest version of the CARB OBD regulation and the removal of any conflicting or redundant text from EPA's OBD requirements; streamlining the test procedures for Fuel Economy Data Vehicles (FEDVs); streamlining the manufacturer conducted confirmatory testing requirements; updating the emissions warranty for diesel powered vehicles (including Class 2b and 3 vehicles) by designating major emissions components subject to the 8 year/80,000 mile warranty period; making the definition of light-duty truck consistent between programs; and miscellaneous other amendments. EPA is also proposing to add a new monitoring and warranty requirement for gasoline particulate filters (GPFs). These improvements and changes are described in more detail in Sections III.F and III.G.

C. Summary of Emission Reductions, Costs, and Benefits

This section summarizes our analysis of the proposal's estimated emission impacts, costs, and monetized benefits, which is described in more detail in Sections V through VIII of this preamble. EPA notes that, consistent with CAA section 202, in evaluating potential standards we carefully weigh the statutory factors, including the emissions impacts of the standards, and the feasibility of the standards (including cost of compliance in light of available lead time). We monetize benefits of the proposed standards and evaluate other costs in part to enable a comparison of costs and benefits pursuant to E.O. 12866, but we recognize there are benefits that we are currently unable to fully quantify. EPA's practice has been to set standards to achieve improved air quality consistent with CAA section 202, and not to rely on cost-benefit calculations, with their uncertainties and limitations, as identifying the appropriate standards. Nonetheless, our conclusion that the estimated benefits considerably exceed the estimated costs of the proposed program reinforces our view that the proposed standards are appropriate under section 202(a).

The proposed standards would result in net reductions of emissions of GHGs and criteria air pollutants in 2055, considering the impacts from light- and medium-duty vehicles, power plants ( i.e., electric generating units (EGUs)), and refineries. Table 2 shows the GHG emission impacts in 2055 while Table 3 shows the cumulative impacts for the years 2027 through 2055. We show cumulative impacts for GHGs as elevated concentrations of GHGs in the atmosphere are resulting in warming and changes in the Earth's climate. Table 4 shows the criteria pollutant emissions impacts in 2055. As shown in Table 5, we also predict reductions in air toxic emissions from light-and medium-duty vehicles. We project that GHG and criteria pollutant emissions from EGUs would increase as a result of the increased demand for electricity associated with the proposal, although those projected impacts decrease over time because of projected increases in renewables in the future power generation mix. We also project that GHG and criteria pollutant emissions from refineries would decrease as a result of the lower demand for liquid fuel associated with the proposed GHG standards. Sections VI and VII of this preamble and Chapter 9 of the DRIA provide more information on the projected emission reductions for the proposed standards and alternatives.

The GHG emission reductions would contribute toward the goal of holding the increase in the global average temperature to well below 2 °C above pre-industrial levels, and subsequently reduce the probability of severe climate change related impacts including heat waves, drought, sea level rise, extreme climate and weather events, coastal flooding, and wildfires. People of color, low-income populations and/or indigenous peoples may be especially vulnerable to the impacts of climate change (see Section VIII.I.2).

The decreases in vehicle emissions would reduce traffic-related pollution in close proximity to roadways. As discussed in Section II.C.8, concentrations of many air pollutants are elevated near high-traffic roadways, and populations who live, work, or go to school near high-traffic roadways experience higher rates of numerous adverse health effects, compared to populations far away from major roads. An EPA study estimated that 72 million people live near truck freight routes, which includes many large highways and other routes where light- and medium-duty vehicles operate. Our consideration of environmental justice literature indicates that people of color and people with low income are disproportionately exposed to elevated concentrations of many pollutants in close proximity to major roadways (see Section VIII.I.3.i).

We expect that increases in criteria and toxic pollutant emissions from EGUs and reductions in petroleum-sector emissions could lead to changes in exposure to these pollutants for people living in the communities near these facilities. Analyses of communities in close proximity to these sources (such as EGUs and refineries) have found that a higher percentage of communities of color and low-income communities live near these sources when compared to national averages (see Section VIII.1.3.ii).

The changes in emissions of criteria and toxic pollutants from vehicles, EGUs, and refineries would also impact ambient levels of ozone, PM_2.5, NO₂, SO₂, CO, and air toxics over a larger geographic scale. As discussed in Section VII.B, we expect that in 2055 the proposal would result in widespread decreases in ozone, PM_2.5, NO₂, CO, and some air toxics, even when accounting for the impacts of increased electricity generation. We expect that in some areas, increased electricity generation would increase ambient SO₂, PM_2.5, ozone, or some air toxics. However, as the power sector becomes cleaner over time, these impacts would decrease. Although the specific locations of increased air pollution are uncertain, we expect them to be in more limited geographic areas, compared to the widespread decreases that we predict to result from the reductions in vehicle emissions.

EPA estimates that the total benefits of this proposal far exceed the total costs. The present value of monetized benefits range from $350 billion to $590 billion, with pre-tax fuel savings providing another $450 billion to $890 billion. The present value of vehicle technology costs range from $180 billion to $280 billion, while the present value of repair and maintenance savings are estimated at $280 billion to $580 billion. The results presented here project the monetized environmental and economic impacts associated with the proposed program during each calendar year through 2055. Table 6 summarizes EPA's estimates of total costs, savings, and benefits. Note EPA projects lower maintenance and repair costs for several advanced technologies ( e.g., battery electric vehicles) and those societal maintenance and repair savings grow significantly over time, and by 2040 and later are larger than our projected new vehicle technology costs.

The benefits include climate-related economic benefits from reducing emissions of GHGs that contribute to climate change, reductions in energy security externalities caused by U.S. petroleum consumption and imports, the value of certain particulate matter-related health benefits, the value of additional driving attributed to the rebound effect, and the value of reduced refueling time needed to refuel vehicles. Between $63 and $280 billion of the present value of total monetized benefits through 2055 (assuming a 7 percent and 3 percent discount rate, respectively, as well as different long-term PM-related mortality risk studies) are attributable to reduced emissions of criteria pollutants that contribute to ambient concentrations of smaller particulate matter (PM_2.5). PM_2.5 is associated with premature death and serious health effects such as hospital admissions due to respiratory and cardiovascular illnesses, nonfatal heart attacks, aggravated asthma, and decreased lung function. The proposed program would also have other significant social benefits including $330 billion in climate benefits (with the average SC–GHGs at a 3 percent discount rate which is the rate used in past GHG rules when we speak of a single value for simplicity in presentation).

The analysis also includes estimates of economic impacts stemming from additional vehicle use from increased rebound driving, such as the economic damages caused by crashes, congestion, and noise. See Chapter 10 of the DRIA for more information regarding these estimates.

Note that some non-emission costs are shown as negative values in Table 6. Those entries represent savings but are included as costs because, traditionally, categories such as repair and maintenance have been viewed as costs of vehicle operation. Where negative values are shown, we are estimating that those costs are lower in the proposal than in the no-action case. Congestion and noise costs are attributable to increased congestion and roadway noise resulting our assumption that drivers choose to drive more under the proposal versus the No Action case. Those increased miles are known as rebound miles and are discussed in Section VIII.

Similarly, some of the traditional benefits of rulemakings that result in lower fuel consumption by the transportation fleet, i.e., the non-emission benefits, are shown as negative values. Our past GHG rules have estimated that time spent refueling vehicles would be reduced due to the lower fuel consumption of new vehicles; hence, a benefit. However, in this analysis, we are estimating that refueling time would increase somewhat due to our assumptions for mid-trip recharging events for electric vehicles. Therefore, the increased refueling time represents a disbenefit (a negative benefit) as shown. As noted in Section VIII and in DRIA Chapter 4, we consider our refueling time estimate to be dated considering the rapid changes taking place in electric vehicle charging infrastructure driven largely by the Bipartisan Infrastructure Law and the Inflation Reduction Act, and we request comment and data on how our estimates could be improved.

EPA estimates the average upfront per-vehicle cost to meet the proposed standards to be approximately $1,200 in MY 2032, as shown in Table 7. We discuss per-vehicle cost in more detail in Section IV.C and DRIA Chapter 13. While the average purchase price of vehicles is estimated to be higher, this is attributable to the larger share of BEVs relative to ICE vehicles. However, after considering purchase incentives and their lower operating costs relative to ICE vehicles, BEVs are estimated to save vehicle owners money over time. For example, a BEV owner of a model year 2032 sedan, wagon, crossover or SUV would save more than $9,000 on average on fuel, maintenance, and repair costs over an eight-year period (the average period of first ownership) compared to a gasoline vehicle. A BEV pickup truck owner would save even more—about $13,000. We discuss ownership savings and expenses in more detail in DRIA Chapter 4.

In addition, the proposal would result in significant savings for consumers from fuel savings and reduced vehicle repair and maintenance. These lower operating costs would offset the upfront vehicle costs. Total retail fuel savings for consumers through 2055 are estimated at $560 billion to $1.1 trillion (7 percent and 3 percent discount rates, see Section VIII.B.2). Also, reduced maintenance and repair costs through 2055 are estimated at $280 billion to $580 billion (7 percent and 3 percent discount rates, see Section VIII of this preamble and Chapter 10 of the DRIA).

D. What are the alternatives that EPA is considering?

1. Description of the Alternatives

EPA is seeking comment on three alternatives to its proposed standards. Alternative 1 is more stringent than the proposal across the MY 2027–2032 time period, and Alternative 2 is less stringent. The proposal as well as Alternatives 1 and 2 all have a similar proportional ramp rate of year over year stringency, which includes a higher rate of stringency increase in the earlier years (MYs 2027–2029) than in the later years. Alternative 3 achieves the same stringency as the proposed standards in MY 2032 but provides for a more consistent rate of stringency increase for MY 2027–2031.

The Alternative 1 projected fleet-wide CO₂ targets are 10 g/mi lower on average than the proposed targets; Alternative 2 projected fleet-wide CO₂ targets averaged 10 g/mi higher than the proposed targets. While the 20 g/mi range of stringency options may appear fairly narrow, for the MY 2032 standards the alternatives capture a range of 12 percent higher and lower than the proposed standards in the final year. Our goal in selecting the alternatives was to identify a range of stringencies that we believe are appropriate to consider for the final standards because they represent a range of standards that are anticipated to be feasible and are highly protective of human health and the environment.

While the proposed standards, Alternative 1 and Alternative 2 all have a larger increase in stringency between MY 2026 and MY 2027, Alternative 3 was constructed with the goal of evaluating roughly equal reductions in absolute g/mi targets over the duration of the program while achieving the same overall targets by MY 2032. This has the effect of less stringent year-over-year increases in the early years of the program.

EPA is soliciting comment on all of the model year standards of Alternatives 1, 2, and 3, and standards generally represented by the range across those alternatives. EPA anticipates that the appropriate choice of final standards within this range will reflect the Administrator's judgments about the uncertainties in EPA's analyses as well as consideration of public comment and updated information where available. However, EPA proposes to find that standards substantially more stringent than Alternative 1 would not be appropriate because of uncertainties concerning the cost and feasibility of such standards. EPA proposes to find that standards substantially less stringent than Alternative 2 or 3 would not be appropriate because they would forgo feasible emissions reductions that would improve the protection of public health and welfare.

Table 8, Table 9 and Table 10 compare the projected fleet average targets for cars, trucks, and the combined fleet, respectively, across the proposed standards and the three alternatives for model years 2027–2032. Table 11 compares the relative percentage year-over-year reductions of the proposed standards and the three alternatives.

The proposed standards will result in industry-wide average GHG emissions target for the light-duty fleet of 82 g/mi in MY 2032, representing a 56 percent reduction in average emission target levels from the existing MY 2026 standards established in 2021. Alternative 1 is projected to result in an industry-wide average target of 72 grams/mile (g/mile) of CO₂ in MY 2032, representing a 61 percent reduction in projected fleet average GHG emissions target levels from the existing MY 2026 standards. Alternative 2 is projected to result in an industry-wide average target of 92 g/mile of CO₂ in MY 2032, which corresponds to a 50 percent reduction in projected fleet average GHG emissions target levels from the existing MY 2026 standards. Like the proposed standards, Alternative 3 is projected to result in an industry-wide average target of 82 g/mile of CO₂ in MY 2032, which corresponds to a 56 percent reduction in projected fleet average GHG emissions target levels from the existing MY 2026 standards.

Table 12 gives a comparison of average incremental per-vehicle costs for the proposed standards and the alternatives. As shown, the 2032 MY industry average vehicle cost increase (compared to the No Action case) ranges from approximately $1,000 to $1,800 per vehicle for the alternatives, compared to $1,200 per vehicle for the proposed standards. These projections represent compliance costs to the industry and are not the same as the costs experienced by the consumer when purchasing a new vehicle. For example, the costs presented here do not include any state and Federal purchase incentives that are available to consumers. Also, the manufacturer decisions for the pricing of individual vehicles may not align exactly with the cost impacts for that particular vehicle. After considering purchase incentives and their lower operating costs relative to ICE vehicles, BEVs are estimated to save vehicle owners money over time. For example, under the proposed standards, a BEV owner of a model year 2032 sedan, wagon, crossover or SUV would save more than $9,000 on average on fuel, maintenance, and repair costs over an eight-year period (the average period of first ownership) compared to a gasoline vehicle. A BEV pickup truck owner would save even more—about $13,000. Consumer savings would be similar to those of the proposal under Alternative 3, somewhat higher under Alternative 1, and somewhat lower under Alternative 2. We discuss ownership savings and expenses under the proposed standards in more detail in DRIA Chapter 4.

2. Projected Emission Reductions From the Alternatives

3. Summary of Costs and Benefits of the Alternatives

Table 17, Table 18., and Table 19 show the summary of costs, savings and benefits under alternatives 1, 2 and 3, respectively.

II. Public Health and Welfare Need for Emission Reductions

A. Climate Change From GHG Emissions

Elevated concentrations of GHGs have been warming the planet, leading to changes in the Earth's climate including changes in the frequency and intensity of heat waves, precipitation, and extreme weather events, rising seas, and retreating snow and ice. The changes taking place in the atmosphere as a result of the well-documented buildup of GHGs due to human activities are changing the climate at a pace and in a way that threatens human health, society, and the natural environment. While EPA is not making any new scientific or factual findings with regard to the well-documented impact of GHG emissions on public health and welfare in support of this rule, EPA is providing some scientific background on climate change to offer additional context for this rulemaking and to increase the public's understanding of the environmental impacts of GHGs.

Extensive additional information on climate change is available in the scientific assessments and the EPA documents that are briefly described in this section, as well as in the technical and scientific information supporting them. One of those documents is EPA's 2009 Endangerment and Cause or Contribute Findings for Greenhouse Gases Under section 202(a) of the CAA (74 FR 66496, December 15, 2009). In the 2009 Endangerment Finding, the Administrator found under section 202(a) of the CAA that elevated atmospheric concentrations of six key well-mixed GHGs—CO₂, methane (CH4), nitrous oxide (N2O), HFCs, perfluorocarbons (PFCs), and sulfur hexafluoride (SF6)—“may reasonably be anticipated to endanger the public health and welfare of current and future generations” (74 FR 66523). The 2009 Endangerment Finding, together with the extensive scientific and technical evidence in the supporting record, documented that climate change caused by human emissions of GHGs threatens the public health of the U.S. population. It explained that by raising average temperatures, climate change increases the likelihood of heat waves, which are associated with increased deaths and illnesses (74 FR 66497). 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 U.S. (74 FR 66525). The 2009 Endangerment Finding further explained that compared with a future without climate change, climate change is expected to increase tropospheric ozone pollution over broad areas of the U.S., including in the largest metropolitan areas with the worst tropospheric ozone problems, and thereby increase the risk of adverse effects on public health (74 FR 66525). Climate change is also expected to cause more intense hurricanes and more frequent and intense storms of other types and heavy precipitation, with impacts on other areas of public health, such as the potential for increased deaths, injuries, infectious and waterborne diseases, and stress-related disorders (74 FR 66525). Children, the elderly, and the poor are among the most vulnerable to these climate-related health effects (74 FR 66498).

The 2009 Endangerment Finding also documented, together with the extensive scientific and technical evidence in the supporting record, that climate change touches nearly every aspect of public welfare in the U.S., including: Changes in water supply and quality due to changes in drought and extreme rainfall events; increased risk of storm surge and flooding in coastal areas and land loss due to inundation; increases in peak electricity demand and risks to electricity infrastructure; and the potential for significant agricultural disruptions and crop failures (though offset to some extent by carbon fertilization). These impacts are also global and may exacerbate problems outside the U.S. that raise humanitarian, trade, and national security issues for the U.S. (74 FR 66530).

In 2016, the Administrator issued a similar finding for GHG emissions from aircraft under section 231(a)(2)(A) of the CAA. In the 2016 Endangerment Finding, the Administrator found that the body of scientific evidence amassed in the record for the 2009 Endangerment Finding compellingly supported a similar endangerment finding under CAA section 231(a)(2)(A), and also found that the science assessments released between the 2009 and the 2016 Findings “strengthen and further support the judgment that GHGs in the atmosphere may reasonably be anticipated to endanger the public health and welfare of current and future generations” (81 FR 54424).

Since the 2016 Endangerment Finding, the climate has continued to change, with new observational records being set for several climate indicators such as global average surface temperatures, GHG concentrations, and sea level rise. Additionally, major scientific assessments continue to be released that further advance our understanding of the climate system and the impacts that GHGs have on public health and welfare both for current and future generations. These updated observations and projections document the rapid rate of current and future climate change both globally and in the U.S.

B. Background on Criteria and Air Toxics Pollutants Impacted by This Proposal

1. Particulate Matter

Particulate matter (PM) is a complex mixture of solid particles and liquid droplets distributed among numerous atmospheric gases which interact with solid and liquid phases. Particles in the atmosphere range in size from less than 0.01 to more than 10 micrometers (μm) in diameter. Atmospheric particles can be grouped into several classes according to their aerodynamic diameter and physical sizes. Generally, the three broad classes of particles include ultrafine particles (UFPs, generally considered as particles with a diameter less than or equal to 0.1 μm [typically based on physical size, thermal diffusivity or electrical mobility]), “fine” particles (PM_2.5; particles with a nominal mean aerodynamic diameter less than or equal to 2.5 μm), and “thoracic” particles (PM₁₀; particles with a nominal mean aerodynamic diameter less than or equal to 10 μm). Particles that fall within the size range between PM_2.5 and PM₁₀, are referred to as “thoracic coarse particles” (PM_10-2.5, particles with a nominal mean aerodynamic diameter greater than 2.5 μm and less than or equal to 10 μm). EPA currently has NAAQS for PM_2.5 and PM₁₀ .

Most particles are found in the lower troposphere, where they can have residence times ranging from a few hours to weeks. Particles are removed from the atmosphere by wet deposition, such as when they are carried by rain or snow, or by dry deposition, when particles settle out of suspension due to gravity. Atmospheric lifetimes are generally longest for PM_2.5 , which often remains in the atmosphere for days to weeks before being removed by wet or dry deposition. In contrast, atmospheric lifetimes for UFP and PM_10-2.5 are shorter. Within hours, UFP can undergo coagulation and condensation that lead to formation of larger particles in the accumulation mode, or can be removed from the atmosphere by evaporation, deposition, or reactions with other atmospheric components. PM_10-2.5 are also generally removed from the atmosphere within hours, through wet or dry deposition.

Particulate matter consists of both primary and secondary particles. Primary particles are emitted directly from sources, such as combustion-related activities ( e.g., industrial activities, motor vehicle operation, biomass burning), while secondary particles are formed through atmospheric chemical reactions of gaseous precursors ( e.g., sulfur oxides (SO_X), nitrogen oxides (NO_X) and volatile organic compounds (VOCs)). From 2000 to 2021, national annual average ambient PM_2.5 concentrations have declined by over 35 percent, largely reflecting reductions in emissions of precursor gases.

There are two primary NAAQS for PM_2.5 : An annual standard (12.0 micrograms per cubic meter (μg/m )) and a 24-hour standard (35 μg/m ), and there are two secondary NAAQS for PM_2.5 : An annual standard (15.0 μg/m ) and a 24-hour standard (35 μg/m ). The initial PM_2.5 standards were set in 1997 and revisions to the standards were finalized in 2006 and in December 2012 and then retained in 2020. On January 6, 2023, EPA announced its proposed decision to revise the PM NAAQS.

There are many areas of the country that are currently in nonattainment for the annual and 24-hour primary PM_2.5 NAAQS. As of August 31, 2022, more than 19 million people lived in the 4 areas that are designated as nonattainment for the 1997 PM_2.5 NAAQS. Also, as of August 31, 2022, more than 31 million people lived in the 14 areas that are designated as nonattainment for the 2006 PM_2.5 NAAQS and more than 20 million people lived in the 5 areas designated as nonattainment for the 2012 PM_2.5 NAAQS. In total, there are currently 15 PM_2.5 nonattainment areas with a population of more than 32 million people. The proposed standards would take effect beginning in MY 2027 and would assist areas with attaining the NAAQS and may relieve areas with already stringent local regulations from some of the burden associated with adopting additional local controls. The rule would also assist counties with ambient concentrations near the level of the NAAQS who are working to ensure long-term attainment or maintenance of the PM_2.5 NAAQS.

2. Ozone

Ground-level ozone pollution forms in areas with high concentrations of ambient NO_X and VOCs when solar radiation is strong. Major U.S. sources of NO_X are highway and nonroad motor vehicles, engines, power plants and other industrial sources, with natural sources, such as soil, vegetation, and lightning, serving as smaller sources. Vegetation is the dominant source of VOCs in the U.S. Volatile consumer and commercial products, such as propellants and solvents, highway and nonroad vehicles, engines, fires, and industrial sources also contribute to the atmospheric burden of VOCs at ground-level.

The processes underlying ozone formation, transport, and accumulation are complex. Ground-level ozone is produced and destroyed by an interwoven network of free radical reactions involving the hydroxyl radical (OH), NO, NO₂, and complex reaction intermediates derived from VOCs. Many of these reactions are sensitive to temperature and available sunlight. High ozone events most often occur when ambient temperatures and sunlight intensities remain high for several days under stagnant conditions. Ozone and its precursors can also be transported hundreds of miles downwind, which can lead to elevated ozone levels in areas with otherwise low VOC or NO_X emissions. As an air mass moves and is exposed to changing ambient concentrations of NO_X and VOCs, the ozone photochemical regime (relative sensitivity of ozone formation to NO_X and VOC emissions) can change.

When ambient VOC concentrations are high, comparatively small amounts of NO_X catalyze rapid ozone formation. Without available NO_X, ground-level ozone production is severely limited, and VOC reductions would have little impact on ozone concentrations. Photochemistry under these conditions is said to be “NO_X -limited.” When NO_X levels are sufficiently high, faster NO₂ oxidation consumes more radicals, dampening ozone production. Under these “VOC-limited” conditions (also referred to as “NO_X -saturated” conditions), VOC reductions are effective in reducing ozone, and NO_X can react directly with ozone, resulting in suppressed ozone concentrations near NO_X emission sources. Under these NO_X -saturated conditions, NO_X reductions can actually increase local ozone under certain circumstances, but overall ozone production (considering downwind formation) decreases and even in VOC-limited areas, NO_X reductions are not expected to increase ozone levels if the NO_X reductions are sufficiently large—large enough to become NO_X -limited.

The primary NAAQS for ozone, established in 2015 and retained in 2020, is an 8-hour standard with a level of 0.07 ppm. EPA announced that it will reconsider the decision to retain the ozone NAAQS. EPA is also implementing the previous 8-hour ozone primary standard, set in 2008, at a level of 0.075 ppm. As of August 31, 2022, there were 34 ozone nonattainment areas for the 2008 ozone NAAQS, composed of 141 full or partial counties, with a population of more than 90 million, and 49 ozone nonattainment areas for the 2015 ozone NAAQS, composed of 212 full or partial counties, with a population of more than 125 million. In total, there are currently, as of August 31, 2022, 57 ozone nonattainment areas with a population of more than 130 million people.

States with ozone nonattainment areas are required to take action to bring those areas into attainment. The attainment date assigned to an ozone nonattainment area is based on the area's classification. The attainment dates for areas designated nonattainment for the 2008 8-hour ozone NAAQS are in the 2015 to 2032 timeframe, depending on the severity of the problem in each area. Attainment dates for areas designated nonattainment for the 2015 ozone NAAQS are in the 2021 to 2038 timeframe, again depending on the severity of the problem in each area. The proposed standards would take effect starting in MY 2027 and would assist areas with attaining the NAAQS and may relieve areas with already stringent local regulations from some of the burden associated with adopting additional local controls. The rule would also provide assistance to counties with ambient concentrations near the level of the NAAQS who are working to ensure long-term attainment or maintenance of the NAAQS.

3. Nitrogen Oxides

Oxides of nitrogen (NO_X) refers to nitric oxide (NO) and nitrogen dioxide (NO₂). Most NO₂ is formed in the air through the oxidation of nitric oxide (NO) emitted when fuel is burned at a high temperature. NO_X is a criteria pollutant, regulated for its adverse effects on public health and the environment, and highway vehicles are an important contributor to NO_X emissions. NO_X, along with VOCs, are the two major precursors of ozone and NO_X is also a major contributor to secondary PM_2.5 formation. There are two primary NAAQS for NO₂ : An annual standard (53 ppb) and a 1-hour standard (100 ppb). In 2010, EPA established requirements for monitoring NO₂ near roadways expected to have the highest concentrations within large cities. Monitoring within this near-roadway network began in 2014, with additional sites deployed in the following years. At present, there are no nonattainment areas for NO₂.

4. Sulfur Oxides

Sulfur dioxide (SO₂), a member of the sulfur oxide (SO_X) family of gases, is formed from burning fuels containing sulfur ( e.g., coal or oil), extracting gasoline from oil, or extracting metals from ore. SO₂ and its gas phase oxidation products can dissolve in water droplets and further oxidize to form sulfuric acid which reacts with ammonia to form sulfates, which are important components of ambient PM.

EPA most recently completed a review of the primary SO₂ NAAQS in February 2019 and decided to retain the existing 2010 SO₂ NAAQS. The current primary NAAQS for SO₂ is a 1-hour standard of 75 ppb. As of September 30, 2022, more than two million people lived in the 30 areas that are designated as nonattainment for the 2010 SO₂ NAAQS.

5. Carbon Monoxide

Carbon monoxide (CO) is a colorless, odorless gas emitted from combustion processes. Nationally, particularly in urban areas, the majority of CO emissions to ambient air come from mobile sources. There are two primary NAAQS for CO: An 8-hour standard (9 ppm) and a 1-hour standard (35 ppm). There are currently no CO nonattainment areas; as of September 27, 2010, all CO nonattainment areas have been redesignated to attainment. The past designations were based on the existing community-wide monitoring network. EPA made an addition to the ambient air monitoring requirements for CO during the 2011 NAAQS review. Those new requirements called for CO monitors to be operated near roads in Core Based Statistical Areas (CBSAs) of 1 million or more persons, in addition to the existing community-based network (76 FR 54294, August 31, 2011).

6. Diesel Exhaust

Diesel exhaust is a complex mixture composed of particulate matter, carbon dioxide, oxygen, nitrogen, water vapor, carbon monoxide, nitrogen compounds, sulfur compounds and numerous low-molecular-weight hydrocarbons. A number of these gaseous hydrocarbon components are individually known to be toxic, including aldehydes, benzene and 1,3-butadiene. The diesel particulate matter present in diesel exhaust consists mostly of fine particles (<2.5 μm), of which a significant fraction is ultrafine particles (<0.1 μm). These particles have a large surface area which makes them an excellent medium for adsorbing organics and their small size makes them highly respirable. Many of the organic compounds present in the gases and on the particles, such as polycyclic organic matter, are individually known to have mutagenic and carcinogenic properties.

Diesel exhaust varies significantly in chemical composition and particle sizes between different engine types (heavy-duty, light-duty), engine operating conditions (idle, acceleration, deceleration), and fuel formulations (high/low sulfur fuel). Also, there are emissions differences between onroad and nonroad engines because the nonroad engines are generally of older technology. After being emitted in the engine exhaust, diesel exhaust undergoes dilution as well as chemical and physical changes in the atmosphere. The lifetimes of the components present in diesel exhaust range from seconds to days.

7. Air Toxics

The most recent available data indicate that millions of Americans live in areas where air toxics pose potential health concerns. The levels of air toxics to which people are exposed vary depending on where people live and work and the kinds of activities in which they engage, as discussed in detail in EPA's 2007 Mobile Source Air Toxics Rule. According to EPA's Air Toxics Screening Assessment (AirToxScreen) for 2018, mobile sources were responsible for 40 percent of outdoor anthropogenic toxic emissions and were the largest contributor to national average cancer and noncancer risk from directly emitted pollutants. Mobile sources are also significant contributors to precursor emissions which react to form air toxics. Formaldehyde is the largest contributor to cancer risk of all 71 pollutants quantitatively assessed in the 2018 AirToxScreen. Mobile sources were responsible for 26 percent of primary anthropogenic emissions of this pollutant in 2018 and are significant contributors to formaldehyde precursor emissions. Benzene is also a large contributor to cancer risk, and mobile sources account for about 60 percent of average exposure to ambient concentrations.

C. Health Effects Associated With Exposure to Criteria and Air Toxics Pollutants

Emissions sources impacted by this proposal, including vehicles and power plants, emit pollutants that contribute to ambient concentrations of ozone, PM, NO₂, SO₂, CO, and air toxics. This section of the preamble discusses the health effects associated with exposure to these pollutants.

Additionally, because children have increased vulnerability and susceptibility for adverse health effects related to air pollution exposures, EPA's findings regarding adverse effects for children related to exposure to pollutants that are impacted by this rule are noted in this section. The increased vulnerability and susceptibility of children to air pollution exposures may arise because infants and children generally breathe more relative to their size than adults do, and consequently may be exposed to relatively higher amounts of air pollution. Children also tend to breathe through their mouths more than adults and their nasal passages are less effective at removing pollutants, which leads to greater lung deposition of some pollutants, such as PM. Furthermore, air pollutants may pose health risks specific to children because children's bodies are still developing. For example, during periods of rapid growth such as fetal development, infancy and puberty, their developing systems and organs may be more easily harmed. EPA produces the report titled “America's Children and the Environment,” which presents national trends on air pollution and other contaminants and environmental health of children.

Information on environmental effects associated with exposure to these pollutants is included in Section II.D, information on environmental justice is included in Section VIII.I and information on emission reductions and air quality impacts from this rule are included in Sections VI and VII of this preamble.

1. Particulate Matter

Scientific evidence spanning animal toxicological, controlled human exposure, and epidemiologic studies shows that exposure to ambient PM is associated with a broad range of health effects. These health effects are discussed in detail in the Integrated Science Assessment for Particulate Matter, which was finalized in December 2019 (2019 PM ISA), with a more targeted evaluation of studies published since the literature cutoff date of the 2019 PM ISA in the Supplement to the Integrated Science Assessment for PM (Supplement). The PM ISA characterizes the causal nature of relationships between PM exposure and broad health categories ( e.g., cardiovascular effects, respiratory effects, etc.) using a weight-of-evidence approach. Within this characterization, the PM ISA summarizes the health effects evidence for short-term ( i.e., hours up to one month) and long-term ( i.e., one month to years) exposures to PM_2.5, PM_10-2.5, and ultrafine particles, and concludes that exposures to ambient PM_2.5 are associated with a number of adverse health effects. The following discussion highlights the PM ISA's conclusions, and summarizes additional information from the Supplement where appropriate, pertaining to the health effects evidence for both short- and long-term PM exposures. Further discussion of PM-related health effects can also be found in the 2022 Policy Assessment for the review of the PM NAAQS.

EPA has concluded that recent evidence in combination with evidence evaluated in the 2009 PM ISA supports a “causal relationship” between both long- and short-term exposures to PM_2.5 and premature mortality and cardiovascular effects and a “likely to be causal relationship” between long- and short-term PM_2.5 exposures and respiratory effects. Additionally, recent experimental and epidemiologic studies provide evidence supporting a “likely to be causal relationship” between long-term PM_2.5 exposure and nervous system effects, and long-term PM_2.5 exposure and cancer. Because of remaining uncertainties and limitations in the evidence base, EPA determined a “suggestive of, but not sufficient to infer, a causal relationship” for long-term PM_2.5 exposure and reproductive and developmental effects ( i.e., male/female reproduction and fertility; pregnancy and birth outcomes), long- and short-term exposures and metabolic effects, and short-term exposure and nervous system effects.

As discussed extensively in the 2019 PM ISA and the Supplement, recent studies continue to support a “causal relationship” between short- and long-term PM_2.5 exposures and mortality. For short-term PM_2.5 exposure, multi-city studies, in combination with single- and multi-city studies evaluated in the 2009 PM ISA, provide evidence of consistent, positive associations across studies conducted in different geographic locations, populations with different demographic characteristics, and studies using different exposure assignment techniques. Additionally, the consistent and coherent evidence across scientific disciplines for cardiovascular morbidity, particularly ischemic events and heart failure, and to a lesser degree for respiratory morbidity, including exacerbations of chronic obstructive pulmonary disease (COPD) and asthma, provide biological plausibility for cause-specific mortality and ultimately total mortality. Recent epidemiologic studies evaluated in the Supplement, including studies that employed alternative methods for confounder control, provide additional support to the evidence base that contributed to the 2019 PM ISA conclusion for short-term PM_2.5 exposure and mortality.

The 2019 PM ISA concluded a “causal relationship” between long-term PM_2.5 exposure and mortality. In addition to reanalyses and extensions of the American Cancer Society (ACS) and Harvard Six Cities (HSC) cohorts, multiple new cohort studies conducted in the U.S. and Canada consisting of people employed in a specific job ( e.g., teacher, nurse), and that apply different exposure assignment techniques, provide evidence of positive associations between long-term PM_2.5 exposure and mortality. Biological plausibility for mortality due to long-term PM_2.5 exposure is provided by the coherence of effects across scientific disciplines for cardiovascular morbidity, particularly for coronary heart disease, stroke, and atherosclerosis, and for respiratory morbidity, particularly for the development of COPD. Additionally, recent studies provide evidence indicating that as long-term PM_2.5 concentrations decrease there is an increase in life expectancy. Recent cohort studies evaluated in the Supplement, as well as epidemiologic studies that conducted accountability analyses or employed alternative methods for confounder controls, support and extend the evidence base that contributed to the 2019 PM ISA conclusion for long-term PM_2.5 exposure and mortality.

A large body of studies examining both short- and long-term PM_2.5 exposure and cardiovascular effects builds on the evidence base evaluated in the 2009 PM ISA. The strongest evidence for cardiovascular effects in response to short-term PM_2.5 exposures is for ischemic heart disease and heart failure. The evidence for short-term PM_2.5 exposure and cardiovascular effects is coherent across scientific disciplines and supports a continuum of effects ranging from subtle changes in indicators of cardiovascular health to serious clinical events, such as increased emergency department visits and hospital admissions due to cardiovascular disease and cardiovascular mortality. For long-term PM_2.5 exposure, there is strong and consistent epidemiologic evidence of a relationship with cardiovascular mortality. This evidence is supported by epidemiologic and animal toxicological studies demonstrating a range of cardiovascular effects including coronary heart disease, stroke, impaired heart function, and subclinical markers ( e.g., coronary artery calcification, atherosclerotic plaque progression), which collectively provide coherence and biological plausibility. Recent epidemiologic studies evaluated in the Supplement, as well as studies that conducted accountability analyses or employed alternative methods for confounder control, support and extend the evidence base that contributed to the 2019 PM ISA conclusion for both short- and long-term PM_2.5 exposure and cardiovascular effects.

Studies evaluated in the 2019 PM ISA continue to provide evidence of a “likely to be causal relationship” between both short- and long-term PM_2.5 exposure and respiratory effects. Epidemiologic studies provide consistent evidence of a relationship between short-term PM_2.5 exposure and asthma exacerbation in children and COPD exacerbation in adults as indicated by increases in emergency department visits and hospital admissions, which is supported by animal toxicological studies indicating worsening allergic airways disease and subclinical effects related to COPD. Epidemiologic studies also provide evidence of a relationship between short-term PM_2.5 exposure and respiratory mortality. However, there is inconsistent evidence of respiratory effects, specifically lung function declines and pulmonary inflammation, in controlled human exposure studies. With respect to long term PM_2.5 exposure, epidemiologic studies conducted in the U.S. and abroad provide evidence of a relationship with respiratory effects, including consistent changes in lung function and lung function growth rate, increased asthma incidence, asthma prevalence, and wheeze in children; acceleration of lung function decline in adults; and respiratory mortality. The epidemiologic evidence is supported by animal toxicological studies, which provide coherence and biological plausibility for a range of effects including impaired lung development, decrements in lung function growth, and asthma development.

Since the 2009 PM ISA, a growing body of scientific evidence examined the relationship between long-term PM_2.5 exposure and nervous system effects, resulting for the first time in a causality determination for this health effects category of a “likely to be causal relationship.” The strongest evidence for effects on the nervous system come from epidemiologic studies that consistently report cognitive decrements and reductions in brain volume in adults. The effects observed in epidemiologic studies in adults are supported by animal toxicological studies demonstrating effects on the brain of adult animals including inflammation, morphologic changes, and neurodegeneration of specific regions of the brain. There is more limited evidence for neurodevelopmental effects in children, with some studies reporting positive associations with autism spectrum disorder and others providing limited evidence of an association with cognitive function. While there is some evidence from animal toxicological studies indicating effects on the brain ( i.e., inflammatory and morphological changes) to support a biologically plausible pathway for neurodevelopmental effects, epidemiologic studies are limited due to their lack of control for potential confounding by copollutants, the small number of studies conducted, and uncertainty regarding critical exposure windows.

Building off the decades of research demonstrating mutagenicity, DNA damage, and other endpoints related to genotoxicity due to whole PM exposures, recent experimental and epidemiologic studies focusing specifically on PM_2.5 provide evidence of a relationship between long-term PM_2.5 exposure and cancer. Epidemiologic studies examining long-term PM_2.5 exposure and lung cancer incidence and mortality provide evidence of generally positive associations in cohort studies spanning different populations, locations, and exposure assignment techniques. Additionally, there is evidence of positive associations with lung cancer incidence and mortality in analyses limited to never smokers. The epidemiologic evidence is supported by both experimental and epidemiologic evidence of genotoxicity, epigenetic effects, carcinogenic potential, and that PM_2.5 exhibits several characteristics of carcinogens, which collectively provides biological plausibility for cancer development and resulted in the conclusion of a “likely to be causal relationship.”

For the additional health effects categories evaluated for PM_2.5 in the 2019 PM ISA, experimental and epidemiologic studies provide limited and/or inconsistent evidence of a relationship with PM_2.5 exposure. As a result, the 2019 PM ISA concluded that the evidence is “suggestive of, but not sufficient to infer a causal relationship” for short-term PM_2.5 exposure and metabolic effects and nervous system effects, and long-term PM_2.5 exposures and metabolic effects as well as reproductive and developmental effects.

In addition to evaluating the health effects attributed to short- and long-term exposure to PM_2.5, the 2019 PM ISA also conducted an extensive evaluation as to whether specific components or sources of PM_2.5 are more strongly related with health effects than PM_2.5 mass. An evaluation of those studies resulted in the 2019 PM ISA concluding that “many PM_2.5 components and sources are associated with many health effects, and the evidence does not indicate that any one source or component is consistently more strongly related to health effects than PM_2.5 mass.”

For both PM_10-2.5 and UFPs, for all health effects categories evaluated, the 2019 PM ISA concluded that the evidence was “suggestive of, but not sufficient to infer, a causal relationship” or “inadequate to determine the presence or absence of a causal relationship.” For PM_10-2.5, although a Federal Reference Method (FRM) was instituted in 2011 to measure PM_10-2.5 concentrations nationally, the causality determinations reflect that the same uncertainty identified in the 2009 PM ISA with respect to the method used to estimate PM_10-2.5 concentrations in epidemiologic studies persists. Specifically, across epidemiologic studies, different approaches are used to estimate PM_10-2.5 concentrations ( e.g., direct measurement of PM_10-2.5, difference between PM₁₀ and PM_2.5 concentrations), and it remains unclear how well correlated PM_10-2.5 concentrations are both spatially and temporally across the different methods used.

For UFPs, which have often been defined as particles <0.1 μm, the uncertainty in the evidence for the health effect categories evaluated across experimental and epidemiologic studies reflects the inconsistency in the exposure metric used ( i.e., particle number concentration, surface area concentration, mass concentration) as well as the size fractions examined. In epidemiologic studies the size fraction examined can vary depending on the monitor used and exposure metric, with some studies examining number count over the entire particle size range, while experimental studies that use a particle concentrator often examine particles up to 0.3 μm. Additionally, due to the lack of a monitoring network, there is limited information on the spatial and temporal variability of UFPs within the U.S., as well as population exposures to UFPs, which adds uncertainty to epidemiologic study results.

The 2019 PM ISA cites extensive evidence indicating that “both the general population as well as specific populations and life stages are at risk for PM_2.5 -related health effects.” For example, in support of its “causal” and “likely to be causal” determinations, the ISA cites substantial evidence for: (1) PM-related mortality and cardiovascular effects in older adults; (2) PM-related cardiovascular effects in people with pre-existing cardiovascular disease; (3) PM-related respiratory effects in people with pre-existing respiratory disease, particularly asthma exacerbations in children; and (4) PM-related impairments in lung function growth and asthma development in children. The ISA additionally notes that stratified analyses ( i.e., analyses that directly compare PM-related health effects across groups) provide strong evidence for racial and ethnic differences in PM_2.5 exposures and in the risk of PM_2.5 -related health effects, specifically within Hispanic and non-Hispanic Black populations, with some evidence of increased risk for populations of low socioeconomic status. Recent studies evaluated in the Supplement support the conclusion of the 2019 PM ISA with respect to disparities in both PM_2.5 exposure and health risk by race and ethnicity and provide additional support for disparities for populations of lower socioeconomic status. Additionally, evidence spanning epidemiologic studies that conducted stratified analyses, experimental studies focusing on animal models of disease or individuals with pre-existing disease, dosimetry studies, as well as studies focusing on differential exposure suggest that populations with pre-existing cardiovascular or respiratory disease, populations that are overweight or obese, populations that have particular genetic variants, and current/former smokers could be at increased risk for adverse PM_2.5 -related health effects. The 2022 Policy Assessment for the review of the PM NAAQS also highlights that factors that may contribute to increased risk of PM_2.5 -related health effects include lifestage (children and older adults), pre-existing diseases (cardiovascular disease and respiratory disease), race/ethnicity, and socioeconomic status.

2. Ozone

This section provides a summary of the health effects associated with exposure to ambient concentrations of ozone. The information in this section is based on the information and conclusions in the April 2020 Integrated Science Assessment for Ozone (Ozone ISA). The Ozone ISA concludes that human exposures to ambient concentrations of ozone are associated with a number of adverse health effects and characterizes the weight of evidence for these health effects. The following discussion highlights the Ozone ISA's conclusions pertaining to health effects associated with both short-term and long-term periods of exposure to ozone.

For short-term exposure to ozone, the Ozone ISA concludes that respiratory effects, including lung function decrements, pulmonary inflammation, exacerbation of asthma, respiratory-related hospital admissions, and mortality, are causally associated with ozone exposure. It also concludes that metabolic effects, including metabolic syndrome ( i.e., changes in insulin or glucose levels, cholesterol levels, obesity, and blood pressure) and complications due to diabetes are likely to be causally associated with short-term exposure to ozone and that evidence is suggestive of a causal relationship between cardiovascular effects, central nervous system effects and total mortality and short-term exposure to ozone.

For long-term exposure to ozone, the Ozone ISA concludes that respiratory effects, including new onset asthma, pulmonary inflammation and injury, are likely to be causally related with ozone exposure. The Ozone ISA characterizes the evidence as suggestive of a causal relationship for associations between long-term ozone exposure and cardiovascular effects, metabolic effects, reproductive and developmental effects, central nervous system effects and total mortality. The evidence is inadequate to infer a causal relationship between chronic ozone exposure and increased risk of cancer.

Finally, interindividual variation in human responses to ozone exposure can result in some groups being at increased risk for detrimental effects in response to exposure. In addition, some groups are at increased risk of exposure due to their activities, such as outdoor workers and children. The Ozone ISA identified several groups that are at increased risk for ozone-related health effects. These groups are people with asthma, children and older adults, individuals with reduced intake of certain nutrients ( i.e., Vitamins C and E), outdoor workers, and individuals having certain genetic variants related to oxidative metabolism or inflammation. Ozone exposure during childhood can have lasting effects through adulthood. Such effects include altered function of the respiratory and immune systems. Children absorb higher doses (normalized to lung surface area) of ambient ozone, compared to adults, due to their increased time spent outdoors, higher ventilation rates relative to body size, and a tendency to breathe a greater fraction of air through the mouth. Children also have a higher asthma prevalence compared to adults. Recent epidemiologic studies provide generally consistent evidence that long-term ozone exposure is associated with the development of asthma in children. Studies comparing age groups reported higher magnitude associations for short-term ozone exposure and respiratory hospital admissions and emergency room visits among children than among adults. Panel studies also provide support for experimental studies with consistent associations between short-term ozone exposure and lung function and pulmonary inflammation in healthy children. Additional children's vulnerability and susceptibility factors are listed in Section X.G of the Preamble.

3. Nitrogen Oxides

The most recent review of the health effects of oxides of nitrogen completed by EPA can be found in the 2016 Integrated Science Assessment for Oxides of Nitrogen—Health Criteria (Oxides of Nitrogen ISA). The primary source of NO₂ is motor vehicle emissions, and ambient NO₂ concentrations tend to be highly correlated with other traffic-related pollutants. Thus, a key issue in characterizing the causality of NO₂ -health effect relationships consists of evaluating the extent to which studies supported an effect of NO₂ that is independent of other traffic-related pollutants. EPA concluded that the findings for asthma exacerbation integrated from epidemiologic and controlled human exposure studies provided evidence that is sufficient to infer a causal relationship between respiratory effects and short-term NO₂ exposure. The strongest evidence supporting an independent effect of NO₂ exposure comes from controlled human exposure studies demonstrating increased airway responsiveness in individuals with asthma following ambient-relevant NO₂ exposures. The coherence of this evidence with epidemiologic findings for asthma hospital admissions and ED visits as well as lung function decrements and increased pulmonary inflammation in children with asthma describe a plausible pathway by which NO₂ exposure can cause an asthma exacerbation. The 2016 ISA for Oxides of Nitrogen also concluded that there is likely to be a causal relationship between long-term NO₂ exposure and respiratory effects. This conclusion is based on new epidemiologic evidence for associations of NO₂ with asthma development in children combined with biological plausibility from experimental studies.

In evaluating a broader range of health effects, the 2016 ISA for Oxides of Nitrogen concluded that evidence is “suggestive of, but not sufficient to infer, a causal relationship” between short-term NO₂ exposure and cardiovascular effects and mortality and between long-term NO₂ exposure and cardiovascular effects and diabetes, birth outcomes, and cancer. In addition, the scientific evidence is inadequate (insufficient consistency of epidemiologic and toxicological evidence) to infer a causal relationship for long-term NO₂ exposure with fertility, reproduction, and pregnancy, as well as with postnatal development. A key uncertainty in understanding the relationship between these non-respiratory health effects and short- or long-term exposure to NO₂ is copollutant confounding, particularly by other roadway pollutants. The available evidence for non-respiratory health effects does not adequately address whether NO₂ has an independent effect or whether it primarily represents effects related to other or a mixture of traffic-related pollutants.

The 2016 ISA for Oxides of Nitrogen concluded that people with asthma, children, and older adults are at increased risk for NO₂ -related health effects. In these groups and lifestages, NO₂ is consistently related to larger effects on outcomes related to asthma exacerbation, for which there is confidence in the relationship with NO₂ exposure.

4. Sulfur Oxides

This section provides an overview of the health effects associated with SO₂ . Additional information on the health effects of SO₂ can be found in the 2017 Integrated Science Assessment for Sulfur Oxides—Health Criteria (SO_X ISA). Following an extensive evaluation of health evidence from animal toxicological, controlled human exposure, and epidemiologic studies, EPA has concluded that there is a causal relationship between respiratory health effects and short-term exposure to SO₂ . The immediate effect of SO₂ on the respiratory system in humans is bronchoconstriction. People with asthma are more sensitive to the effects of SO₂, likely resulting from preexisting inflammation associated with this disease. In addition to those with asthma (both children and adults), there is suggestive evidence that all children and older adults may be at increased risk of SO₂ -related health effects. In free-breathing laboratory studies involving controlled human exposures to SO₂, respiratory effects have consistently been observed following 5–10 min exposures at SO₂ concentrations ≥400 ppb in people with asthma engaged in moderate to heavy levels of exercise, with respiratory effects occurring at concentrations as low as 200 ppb in some individuals with asthma. A clear concentration-response relationship has been demonstrated in these studies following exposures to SO₂ at concentrations between 200 and 1000 ppb, both in terms of increasing severity of respiratory symptoms and decrements in lung function, as well as the percentage of individuals with asthma adversely affected. Epidemiologic studies have reported positive associations between short-term ambient SO₂ concentrations and hospital admissions and emergency department visits for asthma and for all respiratory causes, particularly among children and older adults (≥65 years). The studies provide supportive evidence for the causal relationship.

For long-term SO₂ exposure and respiratory effects, EPA has concluded that the evidence is suggestive of a causal relationship. This conclusion is based on new epidemiologic evidence for positive associations between long-term SO₂ exposure and increases in asthma incidence among children, together with animal toxicological evidence that provides a pathophysiologic basis for the development of asthma. However, uncertainty remains regarding the influence of other pollutants on the observed associations with SO₂ because these epidemiologic studies have not examined the potential for copollutant confounding.

Consistent associations between short-term exposure to SO₂ and mortality have been observed in epidemiologic studies, with larger effect estimates reported for respiratory mortality than for cardiovascular mortality. While this finding is consistent with the demonstrated effects of SO₂ on respiratory morbidity, uncertainty remains with respect to the interpretation of these observed mortality associations due to potential confounding by various copollutants. Therefore, EPA has concluded that the overall evidence is suggestive of a causal relationship between short-term exposure to SO₂ and mortality.

5. Carbon Monoxide

Information on the health effects of carbon monoxide (CO) can be found in the January 2010 Integrated Science Assessment for Carbon Monoxide (CO ISA). The CO ISA presents conclusions regarding the presence of causal relationships between CO exposure and categories of adverse health effects. This section provides a summary of the health effects associated with exposure to ambient concentrations of CO, along with the CO ISA conclusions.

Controlled human exposure studies of subjects with coronary artery disease show a decrease in the time to onset of exercise-induced angina (chest pain) and electrocardiogram changes following CO exposure. In addition, epidemiologic studies observed associations between short-term CO exposure and cardiovascular morbidity, particularly increased emergency room visits and hospital admissions for coronary heart disease (including ischemic heart disease, myocardial infarction, and angina). Some epidemiologic evidence is also available for increased hospital admissions and emergency room visits for congestive heart failure and cardiovascular disease as a whole. The CO ISA concludes that a causal relationship is likely to exist between short-term exposures to CO and cardiovascular morbidity. It also concludes that available data are inadequate to conclude that a causal relationship exists between long-term exposures to CO and cardiovascular morbidity.

Animal studies show various neurological effects with in-utero CO exposure. Controlled human exposure studies report central nervous system and behavioral effects following low-level CO exposures, although the findings have not been consistent across all studies. The CO ISA concludes that the evidence is suggestive of a causal relationship with both short- and long-term exposure to CO and central nervous system effects.

A number of studies cited in the CO ISA have evaluated the role of CO exposure in birth outcomes such as preterm birth or cardiac birth defects. There is limited epidemiologic evidence of a CO-induced effect on preterm births and birth defects, with weak evidence for a decrease in birth weight. Animal toxicological studies have found perinatal CO exposure to affect birth weight, as well as other developmental outcomes. The CO ISA concludes that the evidence is suggestive of a causal relationship between long-term exposures to CO and developmental effects and birth outcomes.

Epidemiologic studies provide evidence of associations between short-term CO concentrations and respiratory morbidity such as changes in pulmonary function, respiratory symptoms, and hospital admissions. A limited number of epidemiologic studies considered copollutants such as ozone, SO₂, and PM in two-pollutant models and found that CO risk estimates were generally robust, although this limited evidence makes it difficult to disentangle effects attributed to CO itself from those of the larger complex air pollution mixture. Controlled human exposure studies have not extensively evaluated the effect of CO on respiratory morbidity. Animal studies at levels of 50–100 ppm CO show preliminary evidence of altered pulmonary vascular remodeling and oxidative injury. The CO ISA concludes that the evidence is suggestive of a causal relationship between short-term CO exposure and respiratory morbidity, and inadequate to conclude that a causal relationship exists between long-term exposure and respiratory morbidity.

Finally, the CO ISA concludes that the epidemiologic evidence is suggestive of a causal relationship between short-term concentrations of CO and mortality. Epidemiologic evidence suggests an association exists between short-term exposure to CO and mortality, but limited evidence is available to evaluate cause-specific mortality outcomes associated with CO exposure. In addition, the attenuation of CO risk estimates which was often observed in copollutant models contributes to the uncertainty as to whether CO is acting alone or as an indicator for other combustion-related pollutants. The CO ISA also concludes that there is not likely to be a causal relationship between relevant long-term exposures to CO and mortality.

6. Diesel Exhaust

In EPA's 2002 Diesel Health Assessment Document (Diesel HAD), exposure to diesel exhaust was classified as likely to be carcinogenic to humans by inhalation from environmental exposures, in accordance with the revised draft 1996/1999 EPA cancer guidelines. A number of other agencies (National Institute for Occupational Safety and Health, the International Agency for Research on Cancer, the World Health Organization, California EPA, and the U.S. Department of Health and Human Services) made similar hazard classifications prior to 2002. EPA also concluded in the 2002 Diesel HAD that it was not possible to calculate a cancer unit risk for diesel exhaust due to limitations in the exposure data for the occupational groups or the absence of a dose-response relationship.

In the absence of a cancer unit risk, the Diesel HAD sought to provide additional insight into the significance of the diesel exhaust cancer hazard by estimating possible ranges of risk that might be present in the population. An exploratory analysis was used to characterize a range of possible lung cancer risk. The outcome was that environmental risks of cancer from long-term diesel exhaust exposures could plausibly range from as low as 10⁻⁵ to as high as 10⁻³ . Because of uncertainties, the analysis acknowledged that the risks could be lower than 10⁻⁵, and a zero risk from diesel exhaust exposure could not be ruled out.

Noncancer health effects of acute and chronic exposure to diesel exhaust emissions are also of concern to EPA. EPA derived a diesel exhaust reference concentration (RfC) from consideration of four well-conducted chronic rat inhalation studies showing adverse pulmonary effects. The RfC is 5 µg/m³ for diesel exhaust measured as diesel particulate matter. This RfC does not consider allergenic effects such as those associated with asthma or immunologic or the potential for cardiac effects. There was emerging evidence in 2002, discussed in the Diesel HAD, that exposure to diesel exhaust can exacerbate these effects, but the exposure-response data were lacking at that time to derive an RfC based on these then-emerging considerations. The Diesel HAD states, “With [diesel particulate matter] being a ubiquitous component of ambient PM, there is an uncertainty about the adequacy of the existing [diesel exhaust] noncancer database to identify all of the pertinent [diesel exhaust]-caused noncancer health hazards.” The Diesel HAD also noted “that acute exposure to [diesel exhaust] has been associated with irritation of the eye, nose, and throat, respiratory symptoms (cough and phlegm), and neurophysiological symptoms such as headache, lightheadedness, nausea, vomiting, and numbness or tingling of the extremities.” The Diesel HAD notes that the cancer and noncancer hazard conclusions applied to the general use of diesel engines then on the market and as cleaner engines replace a substantial number of existing ones, the applicability of the conclusions would need to be reevaluated.

It is important to note that the Diesel HAD also briefly summarizes health effects associated with ambient PM and discusses EPA's then-annual PM_2.5 NAAQS of 15 µg/m . There is a large and extensive body of human data showing a wide spectrum of adverse health effects associated with exposure to ambient PM, of which diesel exhaust is an important component. The PM_2.5 NAAQS is designed to provide protection from the noncancer health effects and premature mortality attributed to exposure to PM_2.5. The contribution of diesel PM to total ambient PM varies in different regions of the country and also, within a region, from one area to another. The contribution can be high in near-roadway environments, for example, or in other locations where diesel engine use is concentrated.

Since 2002, several new studies have been published which continue to report increased lung cancer risk associated with occupational exposure to diesel exhaust from older engines. Of particular note since 2011 are three new epidemiology studies that have examined lung cancer in occupational populations, including, truck drivers, underground nonmetal miners, and other diesel motor-related occupations. These studies reported increased risk of lung cancer related to exposure to diesel exhaust, with evidence of positive exposure-response relationships to varying degrees. These newer studies (along with others that have appeared in the scientific literature) add to the evidence EPA evaluated in the 2002 Diesel HAD and further reinforce the concern that diesel exhaust exposure likely poses a lung cancer hazard. The findings from these newer studies do not necessarily apply to newer technology diesel engines ( i.e., heavy-duty highway engines from 2007 and later model years) since the newer engines have large reductions in the emission constituents compared to older technology diesel engines.

In light of the growing body of scientific literature evaluating the health effects of exposure to diesel exhaust, in June 2012 the World Health Organization's International Agency for Research on Cancer (IARC), a recognized international authority on the carcinogenic potential of chemicals and other agents, evaluated the full range of cancer-related health effects data for diesel engine exhaust. IARC concluded that diesel exhaust should be regarded as “carcinogenic to humans.” This designation was an update from its 1988 evaluation that considered the evidence to be indicative of a “probable human carcinogen.”

7. Air Toxics

Light- and medium-duty engine emissions contribute to ambient levels of air toxics that are known or suspected human or animal carcinogens, or that have noncancer health effects. These compounds include, but are not limited to, acetaldehyde, acrolein, benzene, 1,3-butadiene, ethylbenzene, formaldehyde, naphthalene, and polycyclic organic matter, which were all identified as national or regional cancer risk drivers or contributors in the 2018 AirToxScreen Assessment.

i. Acetaldehyde

Acetaldehyde is classified in EPA's IRIS database as a probable human carcinogen, based on nasal tumors in rats, and is considered toxic by the inhalation, oral, and intravenous routes. The inhalation unit risk estimate (URE) in IRIS for acetaldehyde is 2.2 × 10–6 per µg/m . Acetaldehyde is reasonably anticipated to be a human carcinogen by the NTP in the 14th Report on Carcinogens and is classified as possibly carcinogenic to humans (Group 2B) by the IARC.

The primary noncancer effects of exposure to acetaldehyde vapors include irritation of the eyes, skin, and respiratory tract. In short-term (4 week) rat studies, degeneration of olfactory epithelium was observed at various concentration levels of acetaldehyde exposure. Data from these studies were used by EPA to develop an inhalation reference concentration of 9 µg/m3. Some asthmatics have been shown to be a sensitive subpopulation to decrements in functional expiratory volume (FEV1 test) and bronchoconstriction upon acetaldehyde inhalation. Children, especially those with diagnosed asthma, may be more likely to show impaired pulmonary function and symptoms of asthma than are adults following exposure to acetaldehyde.

ii. Acrolein

EPA most recently evaluated the toxicological and health effects literature related to acrolein in 2003 and concluded that the human carcinogenic potential of acrolein could not be determined because the available data were inadequate. No information was available on the carcinogenic effects of acrolein in humans and the animal data provided inadequate evidence of carcinogenicity. In 2021, the IARC classified acrolein as probably carcinogenic to humans.

Lesions to the lungs and upper respiratory tract of rats, rabbits, and hamsters have been observed after subchronic exposure to acrolein. The agency has developed an RfC for acrolein of 0.02 µg/m and an RfD of 0.5 µg/kg-day.

Acrolein is extremely acrid and irritating to humans when inhaled, with acute exposure resulting in upper respiratory tract irritation, mucus hypersecretion and congestion. The intense irritancy of this carbonyl has been demonstrated during controlled tests in human subjects, who suffer intolerable eye and nasal mucosal sensory reactions within minutes of exposure. These data and additional studies regarding acute effects of human exposure to acrolein are summarized in EPA's 2003 IRIS Human Health Assessment for acrolein. Studies in humans indicate that levels as low as 0.09 ppm (0.21 mg/m ) for five minutes may elicit subjective complaints of eye irritation with increasing concentrations leading to more extensive eye, nose and respiratory symptoms. Acute exposures in animal studies report bronchial hyper-responsiveness. Based on animal data (more pronounced respiratory irritancy in mice with allergic airway disease in comparison to non-diseased mice) and demonstration of similar effects in humans ( e.g., reduction in respiratory rate), individuals with compromised respiratory function ( e.g., emphysema, asthma) are expected to be at increased risk of developing adverse responses to strong respiratory irritants such as acrolein. EPA does not currently have an acute reference concentration for acrolein. The available health effect reference values for acrolein have been summarized by EPA and include an ATSDR MRL for acute exposure to acrolein of 7 µg/m for 1–14 days exposure; and Reference Exposure Level (REL) values from the California Office of Environmental Health Hazard Assessment (OEHHA) for one-hour and 8-hour exposures of 2.5 µg/m and 0.7 µg/m , respectively.

iii. Benzene

EPA's Integrated Risk Information System (IRIS) database lists benzene as a known human carcinogen (causing leukemia) by all routes of exposure, and concludes that exposure is associated with additional health effects, including genetic changes in both humans and animals and increased proliferation of bone marrow cells in mice. EPA states in its IRIS database that data indicate a causal relationship between benzene exposure and acute lymphocytic leukemia and suggest a relationship between benzene exposure and chronic non-lymphocytic leukemia and chronic lymphocytic leukemia. EPA's IRIS documentation for benzene also lists a range of 2.2 × 10–6 to 7.8 × 10–6 per µg/m as the unit risk estimate (URE) for benzene. The International Agency for Research on Cancer (IARC) has determined that benzene is a human carcinogen, and the U.S. Department of Health and Human Services (DHHS) has characterized benzene as a known human carcinogen.

A number of adverse noncancer health effects, including blood disorders such as preleukemia and aplastic anemia, have also been associated with long-term exposure to benzene. The most sensitive noncancer effect observed in humans, based on current data, is the depression of the absolute lymphocyte count in blood. EPA's inhalation reference concentration (RfC) for benzene is 30 µg/m . The RfC is based on suppressed absolute lymphocyte counts seen in humans under occupational exposure conditions. In addition, studies sponsored by the Health Effects Institute (HEI) provide evidence that biochemical responses occur at lower levels of benzene exposure than previously known. EPA's IRIS program has not yet evaluated these new data. EPA does not currently have an acute reference concentration for benzene. The Agency for Toxic Substances and Disease Registry (ATSDR) Minimal Risk Level (MRL) for acute exposure to benzene is 29 µg/m for 1–14 days exposure.

There is limited information from two studies regarding an increased risk of adverse effects to children whose parents have been occupationally exposed to benzene. Data from animal studies have shown benzene exposures result in damage to the hematopoietic (blood cell formation) system during development. Also, key changes related to the development of childhood leukemia occur in the developing fetus. Several studies have reported that genetic changes related to eventual leukemia development occur before birth. For example, there is one study of genetic changes in twins who developed T cell leukemia at nine years of age.

iv. 1,3-Butadiene

EPA has characterized 1,3-butadiene as carcinogenic to humans by inhalation. The IARC has determined that 1,3-butadiene is a human carcinogen and the U.S. DHHS has characterized 1,3-butadiene as a known human carcinogen. There are numerous studies consistently demonstrating that 1,3-butadiene is metabolized into genotoxic metabolites by experimental animals and humans. The specific mechanisms of 1,3-butadiene-induced carcinogenesis are unknown; however, the scientific evidence strongly suggests that the carcinogenic effects are mediated by genotoxic metabolites. Animal data suggest that females may be more sensitive than males for cancer effects associated with 1,3-butadiene exposure; there are insufficient data in humans from which to draw conclusions about sensitive subpopulations. The URE for 1,3-butadiene is 3 × 10–5 per µg/m . 1,3-butadiene also causes a variety of reproductive and developmental effects in mice; no human data on these effects are available. The most sensitive effect was ovarian atrophy observed in a lifetime bioassay of female mice. Based on this critical effect and the benchmark concentration methodology, an RfC for chronic health effects was calculated at 0.9 ppb (approximately 2 µg/m³ ).

v. Ethylbenzene

EPA's inhalation RfC for ethylbenzene is 1 mg/m . This conclusion on a weight of evidence determination and RfC are contained in the 1991 IRIS file for ethylbenzene. The RfC is based on developmental effects. A study in rabbits found reductions in live rabbit kits per litter at 1000 ppm. In addition, a study on rats found an increased incidence of supernumerary and rudimentary ribs at 1000 ppm, and elevated incidence of extra ribs at 100 ppm. In 1988, EPA concluded that data were inadequate to give a weight of evidence characterization for carcinogenic effects. EPA released an IRIS Assessment Plan for Ethylbenzene in 2017 and EPA will be releasing the Systematic Review Protocol for ethylbenzene in 2023.

California EPA completed a cancer risk assessment for ethylbenzene in 2007 and developed an inhalation unit risk estimate of 2.5 × 10–6. This value was based on incidence of kidney cancer in male rats. California EPA also developed a chronic inhalation noncancer reference exposure level (REL) of 2000 µg/m , based on nephrotoxicity and body weight reduction in rats, liver cellular alterations, necrosis in mice, and hyperplasia of the pituitary gland in mice.

ATSDR developed chronic Minimal Risk Levels (MRLs) for ethylbenzene of 0.06 ppm based on renal effects, and an acute MRL of 5 ppm based on auditory effects.

vi. Formaldehyde

In 1991, EPA concluded that formaldehyde is a Class B1 probable human carcinogen based on limited evidence in humans and sufficient evidence in animals. An Inhalation URE for cancer and a Reference Dose for oral noncancer effects were developed by EPA and posted on the IRIS database. Since that time, the NTP and IARC have concluded that formaldehyde is a known human carcinogen.

The conclusions by IARC and NTP reflect the results of epidemiologic research published since 1991 in combination with previous animal, human, and mechanistic evidence. Research conducted by the National Cancer Institute reported an increased risk of nasopharyngeal cancer and specific lymphohematopoietic malignancies among workers exposed to formaldehyde. A National Institute of Occupational Safety and Health study of garment workers also reported increased risk of death due to leukemia among workers exposed to formaldehyde. Extended follow-up of a cohort of British chemical workers did not report evidence of an increase in nasopharyngeal or lymphohematopoietic cancers, but a continuing statistically significant excess in lung cancers was reported. Finally, a study of embalmers reported formaldehyde exposures to be associated with an increased risk of myeloid leukemia but not brain cancer.

Health effects of formaldehyde in addition to cancer were reviewed by the Agency for Toxics Substances and Disease Registry in 1999, supplemented in 2010, and by the World Health Organization. These organizations reviewed the scientific literature concerning health effects linked to formaldehyde exposure to evaluate hazards and dose response relationships and defined exposure concentrations for minimal risk levels (MRLs). The health endpoints reviewed included sensory irritation of eyes and respiratory tract, reduced pulmonary function, nasal histopathology, and immune system effects. In addition, research on reproductive and developmental effects and neurological effects were discussed along with several studies that suggest that formaldehyde may increase the risk of asthma—particularly in the young.

In June 2010, EPA released a draft Toxicological Review of Formaldehyde—Inhalation Assessment through the IRIS program for peer review by the National Research Council (NRC) and public comment. That draft assessment reviewed more recent research from animal and human studies on cancer and other health effects. The NRC released their review report in April 2011. EPA's draft assessment, which addresses NRC recommendations, was suspended in 2018. The draft assessment was unsuspended in March 2021, and an external review draft was released in April 2022. This draft assessment is now undergoing review by the National Academy of Sciences.

vii. Naphthalene

Naphthalene is found in small quantities in gasoline and diesel fuels. Naphthalene emissions have been measured in larger quantities in both gasoline and diesel exhaust compared with evaporative emissions from mobile sources, indicating it is primarily a product of combustion.

Acute (short-term) exposure of humans to naphthalene by inhalation, ingestion, or dermal contact is associated with hemolytic anemia and damage to the liver and the nervous system. Chronic (long term) exposure of workers and rodents to naphthalene has been reported to cause cataracts and retinal damage. Children, especially neonates, appear to be more susceptible to acute naphthalene poisoning based on the number of reports of lethal cases in children and infants (hypothesized to be due to immature naphthalene detoxification pathways). EPA released an external review draft of a reassessment of the inhalation carcinogenicity of naphthalene based on a number of recent animal carcinogenicity studies. The draft reassessment completed external peer review. Based on external peer review comments received, EPA is developing a revised draft assessment that considers inhalation and oral routes of exposure, as well as cancer and noncancer effects. The external review draft does not represent official agency opinion and was released solely for the purposes of external peer review and public comment. The NTP listed naphthalene as “reasonably anticipated to be a human carcinogen” in 2004 on the basis of bioassays reporting clear evidence of carcinogenicity in rats and some evidence of carcinogenicity in mice. California EPA has released a new risk assessment for naphthalene, and the IARC has reevaluated naphthalene and re-classified it as Group 2B: possibly carcinogenic to humans.

Naphthalene also causes a number of non-cancer effects in animals following chronic and less-than-chronic exposure, including abnormal cell changes and growth in respiratory and nasal tissues. The current EPA IRIS assessment includes noncancer data on hyperplasia and metaplasia in nasal tissue that form the basis of the inhalation RfC of 3 µg/m . The ATSDR MRL for acute and intermediate duration oral exposure to naphthalene is 0.6 mg/kg/day based on maternal toxicity in a developmental toxicology study in rats. ATSDR also derived an ad hoc reference value of 6 × 10–2 mg/m for acute (≤24-hour) inhalation exposure to naphthalene in a Letter Health Consultation dated March 24, 2014 to address a potential exposure concern in Illinois. The ATSDR acute inhalation reference value was based on a qualitative identification of an exposure level interpreted not to cause pulmonary lesions in mice. More recently, EPA developed acute RfCs for 1-, 8-, and 24-hour exposure scenarios; the ≤24-hour reference value is 2 × 10–2 mg/m . EPA's acute RfCs are based on a systematic review of the literature, benchmark dose modeling of naphthalene-induced nasal lesions in rats, and application of a PBPK (physiologically based pharmacokinetic) model.

viii. POM/PAHs

The term polycyclic organic matter (POM) defines a broad class of compounds that includes the polycyclic aromatic hydrocarbon compounds (PAHs). One of these compounds, naphthalene, is discussed separately in Section II.C.7.vii. POM compounds are formed primarily from combustion and are present in the atmosphere in gas and particulate form as well as in some fried and grilled foods. Epidemiologic studies have reported an increase in lung cancer in humans exposed to diesel exhaust, coke oven emissions, roofing tar emissions, and cigarette smoke; all of these mixtures contain POM compounds. In 1991 EPA classified seven PAHs (benzo[a]pyrene, benz[a]anthracene, chrysene, benzo[b]fluoranthene, benzo[k]fluoranthene, dibenz[a,h]anthracene, and indeno[1,2,3-cd]pyrene) as Group B2, probable human carcinogens based on the 1986 EPA Guidelines for Carcinogen Risk Assessment. Studies in multiple animal species demonstrate that benzo[a]pyrene is carcinogenic at multiple tumor sites (alimentary tract, liver, kidney, respiratory tract, pharynx, and skin) by all routes of exposure. An increasing number of occupational studies demonstrate a positive exposure-response relationship with cumulative benzo[a]pyrene exposure and lung cancer. The inhalation URE in IRIS for benzo[a]pyrene is 6 × 10–4 per µg/m and the oral slope factor for cancer is 1 per mg/kg-day.

Animal studies demonstrate that exposure to benzo[a]pyrene is also associated with developmental (including developmental neurotoxicity), reproductive, and immunological effects. In addition, epidemiology studies involving exposure to PAH mixtures have reported associations between internal biomarkers of exposure to benzo[a]pyrene (benzo[a]pyrene diol epoxide-DNA adducts) and adverse birth outcomes (including reduced birth weight, postnatal body weight, and head circumference), neurobehavioral effects, and decreased fertility. The inhalation RfC for benzo[a]pyrene is 2 × 10⁻⁶ mg/m and the RfD for oral exposure is 3 × 10⁻⁴ mg/kg-day.

8. Exposure and Health Effects Associated With Traffic

Locations in close proximity to major roadways generally have elevated concentrations of many air pollutants emitted from motor vehicles. Hundreds of studies have been published in peer-reviewed journals, concluding that concentrations of CO, CO₂, NO, NO₂, benzene, aldehydes, particulate matter, black carbon, and many other compounds are elevated in ambient air within approximately 300–600 meters (about 1,000–2,000 feet) of major roadways. The highest concentrations of most pollutants emitted directly by motor vehicles are found at locations within 50 meters (about 165 feet) of the edge of a roadway's traffic lanes.

A large-scale review of air quality measurements in the vicinity of major roadways between 1978 and 2008 concluded that the pollutants with the steepest concentration gradients in vicinities of roadways were CO, ultrafine particles, metals, elemental carbon (EC), NO, NO_X , and several VOCs. These pollutants showed a large reduction in concentrations within 100 meters downwind of the roadway. Pollutants that showed more gradual reductions with distance from roadways included benzene, NO₂, PM_2.5, and PM₁₀ . In reviewing the literature, Karner et al., (2010) reported that results varied based on the method of statistical analysis used to determine the gradient in pollutant concentration. More recent studies continue to show significant concentration gradients of traffic-related air pollution around major roads. There is evidence that EPA's regulations for vehicles have lowered the near-road concentrations and gradients. Starting in 2010, EPA required through the NAAQS process that air quality monitors be placed near high-traffic roadways for determining concentrations of CO, NO₂, and PM_2.5 (in addition to those existing monitors located in neighborhoods and other locations farther away from pollution sources). The monitoring data for NO₂ indicate that in urban areas, monitors near roadways often report the highest concentrations of NO₂ . More recent studies of traffic-related air pollutants continue to report sharp gradients around roadways, particularly within several hundred meters.

For pollutants with relatively high background concentrations relative to near-road concentrations, detecting concentration gradients can be difficult. For example, many carbonyls have high background concentrations as a result of photochemical breakdown of precursors from many different organic compounds. However, several studies have measured carbonyls in multiple weather conditions and found higher concentrations of many carbonyls downwind of roadways. These findings suggest a substantial roadway source of these carbonyls.

In the past 30 years, many studies have been published with results reporting that populations who live, work, or go to school near high-traffic roadways experience higher rates of numerous adverse health effects, compared to populations far away from major roads. In addition, numerous studies have found adverse health effects associated with spending time in traffic, such as commuting or walking along high-traffic roadways, including studies among children. The health outcomes with the strongest evidence linking them with traffic-associated air pollutants are respiratory effects, particularly in asthmatic children, and cardiovascular effects.

Numerous reviews of this body of health literature have been published. In a 2022 final report, an expert panel of the Health Effects Institute (HEI) employed a systematic review focusing on selected health endpoints related to exposure to traffic-related air pollution. The HEI panel concluded that there was a high level of confidence in evidence between long-term exposure to traffic-related air pollution and health effects in adults, including all-cause, circulatory, and ischemic heart disease mortality. The panel also found that there is a moderate-to-high level of confidence in evidence of associations with asthma onset and acute respiratory infections in children and lung cancer and asthma onset in adults. This report follows on an earlier expert review published by HEI in 2010, where it found strongest evidence for asthma-related traffic impacts. Other literature reviews have been published with conclusions generally similar to the HEI panels'. Additionally, in 2014, researchers from the U.S. Centers for Disease Control and Prevention (CDC) published a systematic review and meta-analysis of studies evaluating the risk of childhood leukemia associated with traffic exposure and reported positive associations between “postnatal” proximity to traffic and leukemia risks, but no such association for “prenatal” exposures. The U.S. Department of Health and Human Services' National Toxicology Program (NTP) published a monograph including a systematic review of traffic-related air pollution and its impacts on hypertensive disorders of pregnancy. The NTP concluded that exposure to traffic-related air pollution is “presumed to be a hazard to pregnant women” for developing hypertensive disorders of pregnancy.

Health outcomes with few publications suggest the possibility of other effects still lacking sufficient evidence to draw definitive conclusions. Among these outcomes with a small number of positive studies are neurological impacts ( e.g., autism and reduced cognitive function) and reproductive outcomes ( e.g., preterm birth, low birth weight).

In addition to health outcomes, particularly cardiopulmonary effects, conclusions of numerous studies suggest mechanisms by which traffic-related air pollution affects health. For example, numerous studies indicate that near-roadway exposures may increase systemic inflammation, affecting organ systems, including blood vessels and lungs. Additionally, long-term exposures in near-road environments have been associated with inflammation-associated conditions, such as atherosclerosis and asthma.

Several studies suggest that some factors may increase susceptibility to the effects of traffic-associated air pollution. Several studies have found stronger respiratory associations in children experiencing chronic social stress, such as in violent neighborhoods or in homes with high family stress.

The risks associated with residence, workplace, or schools near major roads are of potentially high public health significance due to the large population in such locations. The 2013 U.S. Census Bureau's American Housing Survey (AHS) was the last AHS that included whether housing units were within 300 feet of an “airport, railroad, or highway with four or more lanes.” The 2013 survey reports that 17.3 million housing units, or 13 percent of all housing units in the U.S., were in such areas. Assuming that populations and housing units are in the same locations, this corresponds to a population of more than 41 million U.S. residents within 300 feet (approximately 90 meters) of high-traffic roadways or other transportation sources. According to the Central Intelligence Agency's World Factbook, based on data collected between 2012–2014, the United States had 6,586,610 km of roadways, 293,564 km of railways, and 13,513 airports. As such, highways represent the overwhelming majority of transportation facilities described by this factor in the AHS.

We analyzed national databases that allowed us to evaluate whether homes and schools were located near a major road and whether disparities in exposure may be occurring in these environments. Until 2009, the AHS included descriptive statistics of over 70,000 housing units across the nation and asked about transportation infrastructure near respondents' homes every two years. We also analyzed the U.S. Department of Education's Common Core of Data, which includes enrollment and location information for schools across the U.S.

In analyzing the 2009 AHS, we focused on whether a housing unit was located within 300 feet of a “4-or-more lane highway, railroad, or airport” (this distance was used in the AHS analysis). We analyzed whether there were differences between households in such locations compared with those in locations farther from these transportation facilities. We included other variables, such as land use category, region of country, and housing type. We found that homes with a non-White householder were 22–34 percent more likely to be located within 300 feet of these large transportation facilities than homes with White householders. Homes with a Hispanic householder were 17–33 percent more likely to be located within 300 feet of these large transportation facilities than homes with non-Hispanic householders. Households near large transportation facilities were, on average, lower in income and educational attainment and more likely to be a rental property and located in an urban area compared with households more distant from transportation facilities.

In examining schools near major roadways, we used the Common Core of Data from the U.S. Department of Education, which includes information on all public elementary and secondary schools and school districts nationwide. To determine school proximities to major roadways, we used a geographic information system (GIS) to map each school and roadways based on the U.S. Census's TIGER roadway file. We estimated that about 10 million students attend public schools within 200 meters of major roads, about 20 percent of the total number of public school students in the U.S. About 800,000 students attend public schools within 200 meters of primary roads, or about 2 percent of the total. We found that students of color were overrepresented at schools within 200 meters of primary roadways, and schools within 200 meters of primary roadways had a disproportionate population of students eligible for free or reduced-price lunches. Black students represent 22 percent of students at schools located within 200 meters of a primary road, compared to 17 percent of students in all U.S. schools. Hispanic students represent 30 percent of students at schools located within 200 meters of a primary road, compared to 22 percent of students in all U.S. schools.

Research into the impact of traffic-related air pollution on school performance is tentative. Two reviews of this literature found some evidence that children exposed to higher levels of traffic-related air pollution show poorer academic performance than those exposed to lower levels of traffic-related air pollution. However, this evidence was judged to be weak due to limitations in the assessment methods.

EPA also conducted a study to estimate the number of people living near truck freight routes in the United States, which includes many large highways and other routes where light- and medium-duty vehicles operate. Based on a population analysis using the U.S. Department of Transportation's (USDOT) Freight Analysis Framework 4 (FAF4) and population data from the 2010 decennial census, an estimated 72 million people live within 200 meters of these FAF4 roads, which are used by all types of vehicles. This analysis includes the population living within twice the distance of major roads compared with the analysis of housing units near major roads described earlier in this section. The larger distance and other methodological differences explain the difference in the two estimates for populations living near major roads. Relative to the rest of the population, people of color and those with lower incomes are more likely to live near FAF4 roads.

EPA's Exposure Factor Handbook also indicates that, on average, Americans spend more than an hour traveling each day, bringing nearly all residents into a high-exposure microenvironment for part of the day. The duration of commuting results in another important contributor to overall exposure to traffic-related air pollution. Studies of health that address time spent in transit have found evidence of elevated risk of cardiac impacts.

D. Welfare Effects Associated With Exposure to Criteria and Air Toxics Pollutants Impacted by the Proposed Standards

This section discusses the welfare effects associated with pollutants affected by this rule, specifically particulate matter, ozone, NO_X, SO_X, and air toxics.

1. Visibility

Visibility can be defined as the degree to which the atmosphere is transparent to visible light. Visibility impairment is caused by light scattering and absorption by suspended particles and gases. It is dominated by contributions from suspended particles except under pristine conditions. Visibility is important because it has direct significance to people's enjoyment of daily activities in all parts of the country. Individuals value good visibility for the well-being it provides them directly, where they live and work, and in places where they enjoy recreational opportunities. Visibility is also highly valued in significant natural areas, such as national parks and wilderness areas, and special emphasis is given to protecting visibility in these areas. For more information on visibility see the final 2019 PMISA.

EPA is working to address visibility impairment. Reductions in air pollution from implementation of various programs associated with the Clean Air Act Amendments of 1990 provisions have resulted in substantial improvements in visibility and will continue to do so in the future. Nationally, because trends in haze are closely associated with trends in particulate sulfate and nitrate due to the relationship between their concentration and light extinction, visibility trends have improved as emissions of SO₂ and NO_X have decreased over time due to air pollution regulations such as the Acid Rain Program. However, in the western part of the country, changes in total light extinction were smaller, and the contribution of particulate organic matter to atmospheric light extinction was increasing due to increasing wildfire emissions.

In the Clean Air Act Amendments of 1977, Congress recognized visibility's value to society by establishing a national goal to protect national parks and wilderness areas from visibility impairment caused by manmade pollution. In 1999, EPA finalized the regional haze program to protect the visibility in Mandatory Class I Federal areas. There are 156 national parks, forests and wilderness areas categorized as Mandatory Class I Federal areas. These areas are defined in CAA section 162 as those national parks exceeding 6,000 acres, wilderness areas and memorial parks exceeding 5,000 acres, and all international parks which were in existence on August 7, 1977.

EPA has also concluded that PM_2.5 causes adverse effects on visibility in other areas that are not targeted by the Regional Haze Rule, such as urban areas, depending on PM_2.5 concentrations and other factors such as dry chemical composition and relative humidity ( i.e., an indicator of the water composition of the particles). The secondary (welfare-based) PM NAAQS provide protection against visibility effects. In recent PM NAAQS reviews, EPA evaluated a target level of protection for visibility impairment that is expected to be met through attainment of the existing secondary PM standards.

2. Ozone Effects on Ecosystems

The welfare effects of ozone include effects on ecosystems, which can be observed across a variety of scales, i.e., subcellular, cellular, leaf, whole plant, population, and ecosystem. Ozone effects that begin at small spatial scales, such as the leaf of an individual plant, when they occur at sufficient magnitudes (or to a sufficient degree) can result in effects being propagated along a continuum to higher and higher levels of biological organization. For example, effects at the individual plant level, such as altered rates of leaf gas exchange, growth, and reproduction, can, when widespread, result in broad changes in ecosystems, such as productivity, carbon storage, water cycling, nutrient cycling, and community composition.

Ozone can produce both acute and chronic injury in sensitive plant species depending on the concentration level and the duration of the exposure. In those sensitive species, effects from repeated exposure to ozone throughout the growing season of the plant can tend to accumulate, so even relatively low concentrations experienced for a longer duration have the potential to create chronic stress on vegetation. Ozone damage to sensitive plant species includes impaired photosynthesis and visible injury to leaves. The impairment of photosynthesis, the process by which the plant makes carbohydrates (its source of energy and food), can lead to reduced crop yields, timber production, and plant productivity and growth. Impaired photosynthesis can also lead to a reduction in root growth and carbohydrate storage below ground, resulting in other, more subtle plant and ecosystems impacts. These latter impacts include increased susceptibility of plants to insect attack, disease, harsh weather, interspecies competition and overall decreased plant vigor. The adverse effects of ozone on areas with sensitive species could potentially lead to species shifts and loss from the affected ecosystems, resulting in a loss or reduction in associated ecosystem goods and services. Additionally, visible ozone injury to leaves can result in a loss of aesthetic value in areas of special scenic significance like national parks and wilderness areas and reduced use of sensitive ornamentals in landscaping. In addition to ozone effects on vegetation, newer evidence suggests that ozone affects interactions between plants and insects by altering chemical signals ( e.g., floral scents) that plants use to communicate to other community members, such as attraction of pollinators.

The Ozone ISA presents more detailed information on how ozone affects vegetation and ecosystems. The Ozone ISA reports causal and likely causal relationships between ozone exposure and a number of welfare effects and characterizes the weight of evidence for different effects associated with ozone. The ISA concludes that visible foliar injury effects on vegetation, reduced vegetation growth, reduced plant reproduction, reduced productivity in terrestrial ecosystems, reduced yield and quality of agricultural crops, alteration of below-ground biogeochemical cycles, and altered terrestrial community composition are causally associated with exposure to ozone. It also concludes that increased tree mortality, altered herbivore growth and reproduction, altered plant-insect signaling, reduced carbon sequestration in terrestrial ecosystems, and alteration of terrestrial ecosystem water cycling are likely to be causally associated with exposure to ozone.

3. Deposition

The Integrated Science Assessment for Oxides of Nitrogen, Oxides of Sulfur, and Particulate Matter—Ecological Criteria documents the ecological effects of the deposition of these criteria air pollutants. It is clear from the body of evidence that oxides of nitrogen, oxides of sulfur, and particulate matter contribute to total nitrogen (N) and sulfur (S) deposition. In turn, N and S deposition cause either nutrient enrichment or acidification depending on the sensitivity of the landscape or the species in question. Both enrichment and acidification are characterized by an alteration of the biogeochemistry and the physiology of organisms, resulting in harmful declines in biodiversity in terrestrial, freshwater, wetland, and estuarine ecosystems in the U.S. Decreases in biodiversity mean that some species become relatively less abundant and may be locally extirpated. In addition to the loss of unique living species, the decline in total biodiversity can be harmful because biodiversity is an important determinant of the stability of ecosystems and their ability to provide socially valuable ecosystem services.

Terrestrial, wetland, freshwater, and estuarine ecosystems in the U.S. are affected by N enrichment/eutrophication caused by N deposition. These effects have been consistently documented across the U.S. for hundreds of species. In aquatic systems increased nitrogen can alter species assemblages and cause eutrophication. In terrestrial systems nitrogen loading can lead to loss of nitrogen-sensitive lichen species, decreased biodiversity of grasslands, meadows and other sensitive habitats, and increased potential for invasive species. For a broader explanation of the topics treated here, refer to the description in Chapter 9 of the DRIA.

The sensitivity of terrestrial and aquatic ecosystems to acidification from nitrogen and sulfur deposition is predominantly governed by geology. Prolonged exposure to excess nitrogen and sulfur deposition in sensitive areas acidifies lakes, rivers, and soils. Increased acidity in surface waters creates inhospitable conditions for biota and affects the abundance and biodiversity of fishes, zooplankton and macroinvertebrates and ecosystem function. Over time, acidifying deposition also removes essential nutrients from forest soils, depleting the capacity of soils to neutralize future acid loadings and negatively affecting forest sustainability. Major effects in forests include a decline in sensitive tree species, such as red spruce (Picea rubens) and sugar maple (Acer saccharum).

Building materials including metals, stones, cements, and paints undergo natural weathering processes from exposure to environmental elements ( e.g., wind, moisture, temperature fluctuations, sunlight, etc.). Pollution can worsen and accelerate these effects. Deposition of PM is associated with both physical damage (materials damage effects) and impaired aesthetic qualities (soiling effects). Wet and dry deposition of PM can physically affect materials, adding to the effects of natural weathering processes, by potentially promoting or accelerating the corrosion of metals, by degrading paints and by deteriorating building materials such as stone, concrete, and marble. The effects of PM are exacerbated by the presence of acidic gases and can be additive or synergistic due to the complex mixture of pollutants in the air and surface characteristics of the material. Acidic deposition has been shown to have an effect on materials including zinc/galvanized steel and other metal, carbonate stone (as monuments and building facings), and surface coatings (paints). The effects on historic buildings and outdoor works of art are of particular concern because of the uniqueness and irreplaceability of many of these objects. In addition to aesthetic and functional effects on metals, stone, and glass, altered energy efficiency of photovoltaic panels by PM deposition is also becoming an important consideration for impacts of air pollutants on materials.

4. Welfare Effects Associated With Air Toxics

Emissions from producing, transporting, and combusting fuel contribute to ambient levels of pollutants that contribute to adverse effects on vegetation. VOCs, some of which are considered air toxics, have long been suspected to play a role in vegetation damage. In laboratory experiments, a wide range of tolerance to VOCs has been observed. Decreases in harvested seed pod weight have been reported for the more sensitive plants, and some studies have reported effects on seed germination, flowering, and fruit ripening. Effects of individual VOCs or their role in conjunction with other stressors ( e.g., acidification, drought, temperature extremes) have not been well studied. In a recent study of a mixture of VOCs including ethanol and toluene on herbaceous plants, significant effects on seed production, leaf water content and photosynthetic efficiency were reported for some plant species.

Research suggests an adverse impact of vehicle exhaust on plants, which has in some cases been attributed to aromatic compounds and in other cases to NO_X . The impacts of VOCs on plant reproduction may have long-term implications for biodiversity and survival of native species near major roadways. Most of the studies of the impacts of VOCs on vegetation have focused on short-term exposure and few studies have focused on long-term effects of VOCs on vegetation and the potential for metabolites of these compounds to affect herbivores or insects.

III. EPA Proposal for Light- and Medium-Duty Vehicle Standards for Model Years 2027 and Later

A. Introduction and Background

This Preamble Section III outlines the proposed GHG and criteria pollutant standards and related provisions that are included in the proposal.

Throughout this section and elsewhere in this NPRM, EPA uses the following conventions to identify specific vehicle technology types. More information about these vehicle technologies may be found in the 2016 EPA Draft Technical Assessment Report.

• ICE vehicle: an internal combustion engine (ICE) vehicle with no powertrain electrification
• BEV: Battery Electric Vehicle
• PHEV: Plug-in Hybrid Electric Vehicle
• PEV: Plug-in Electric Vehicle (refers collectively to BEVs and PHEVs)

• HEV: Hybrid Electric Vehicle (or strong hybrid)

• MHEV: Mild Hybrid Electric Vehicle

• Hybrid: refers collectively to HEVs (or strong hybrid) and MHEVs
• FCEV: Fuel Cell Electric Vehicle
• Electrified: any of the preceding vehicle types with an electric drive, including FCEV
• ZEV: Zero-Emission Vehicle (used primarily in reference to the California ZEV program)

Because ZEV has a specific meaning under the California program, EPA in this proposal is generally refraining from using the term except in reference to the California program. Executive Order (E.O.) 14037 also uses the term “zero-emission vehicle” to refer generally to BEVs, FCEVs, and PHEVs, so EPA may also use “ZEV” when referencing the E.O.

Additionally, in the context of the criteria pollutant program, the abbreviation LDV refers to light-duty vehicles that are not otherwise designated as a light-duty truck (LDT) or medium-duty passenger vehicle (MDPV). In this proposal, the new nomenclature “medium-duty vehicle” (MDV) refers to Class 2b and 3 vehicles, as described in the following section.

1. What vehicle categories and pollutants are covered by the proposal?

EPA is proposing emissions standards for both light-duty vehicles and medium-duty (Class 2b and 3) vehicles. The light-duty vehicle category includes passenger cars, light trucks, and medium-duty passenger vehicles (MDPVs), consistent with previous EPA GHG and criteria pollutant rules. In this proposed rule, Class 2b and 3 vehicles are referred to as “medium-duty vehicles” (MDVs) to distinguish them from Class 4 and higher vehicles that remain under the heavy-duty program in 40 CFR parts 1036 and 1037. EPA has not previously used the MDV nomenclature, referring to these larger vehicles in prior rules as either heavy-duty Class 2b and 3 vehicles or heavy-duty pickups and vans. The MDV category includes large pickups, vans, and incomplete vehicles, but excludes MDPVs. Examples of vehicles in this category include GM or Stellantis 2500 and 3500 series, and Ford 250 and 350 series, pickups and vans. EPA notes that it is proposing that certain Class 2b and 3 vehicles would be subject to engine-based criteria pollutant emissions standards under EPA's heavy-duty engine standards rather than being included in the MDV category, as discussed in Section III.C.

EPA is proposing new standards for emissions of GHGs and hydrocarbons, oxides of nitrogen (NO_X), and particulate matter (PM). EPA's proposed standards are based on an assessment of all available and potential vehicle emissions control technologies, including advancements in gasoline vehicle technologies, strong hybridization, and zero-emission technologies over the model years affected by the proposal.

2. Light-Duty and Medium-Duty Vehicle Standards: Background and History

Previously, EPA has addressed medium-duty vehicle emissions as part of regulatory programs for GHG emissions along with the heavy-duty sector, and for criteria pollutant emissions along with the light-duty sector. As a result, the program structure for medium-duty vehicles is similar to that of the light-duty program for criteria pollutants but differs from that of light-duty program for GHG emissions. This section provides a brief overview of the rules and the standards structures for EPA's light-duty GHG emissions standards, MDV GHG emissions standards, and criteria pollutant emissions standards. While the current proposal is addressing both light- and medium-duty vehicles under a single umbrella rulemaking, EPA is proposing standards for each class and for each pollutant pursuant to the relevant statutory provisions for each class and pollutant based on its assessment of the feasibility of more stringent standards for each class and pollutant, and the programs would continue to follow the basic structures EPA has previously adopted.

i. GHG Standards

EPA has issued four rules establishing light-duty vehicle GHG standards, which EPA refers to in this proposal based on the year in which the previous final rule was issued, as shown in Table 20.

The GHG standards have all been based on fleet average CO₂ emissions. Each vehicle model is assigned a CO₂ target based on the vehicle's “footprint” in square feet (ft² ), generally consisting of the area of the rectangle formed by the four points at which the tires rest on the ground. Generally, vehicles with larger footprints have higher assigned CO₂ emissions targets. The most recent set of footprint curves established by the 2021 rule for model years 2023–2026 are shown in Figure 4 and Figure 5, along with the curves for MYs 2021–2022, included for comparison. As shown, passenger cars and light trucks have separate footprint standards curves, which result in separate fleet average standards for the two sets of vehicles. The fleet-average standards are the production-weighted fleet average of the footprint targets for all the vehicles in a manufacturer's fleet for a given model year. As a result, the footprint-based fleet average standards, which manufacturers are required to meet on an annual basis, will vary for each manufacturer based on its actual production of vehicles in a given model year. Individual vehicles are not required to meet their footprint-based CO₂ targets, although they are required to demonstrate compliance with applicable in-use standards.

For medium-duty vehicles, EPA has established GHG standards previously as part of our heavy-duty vehicle GHG Phase 1 and 2 rules, shown in Table 21.

The MDV standards are also attribute-based. However, they are based on a “work factor” attribute rather than the footprint attribute used in the light-duty vehicle program. Work-based measures such as payload and towing capability are two key factors that characterize differences in the design of vehicles, as well as differences in how the vehicles are expected to be regularly used. The work factor attribute combines vehicle payload capacity and vehicle towing capacity, in pounds (lb), with an additional fixed adjustment for four-wheel drive vehicles. This adjustment accounts for the fact that four-wheel drive, critical to enabling heavy-duty work (payload or trailer towing) in certain road conditions, adds roughly 500 pounds to the vehicle weight. The work factor is calculated as follows:

75 percent maximum payload + 25 percent of maximum towing + 375 lb if four-wheel drive.

—Maximum payload is calculated as GVWR minus curb weight

—Maximum towing is calculated as Gross Combined Weight Rating (GCWR) minus GVWR

Under this approach, GHG targets are determined for each vehicle with a unique work factor (analogous to a target for each discrete vehicle footprint in the light-duty vehicle rules). These targets are then production weighted and summed to derive a manufacturer's annual fleet average standard for its MDVs. The current program includes separate standards for gasoline and diesel-fueled vehicles. The Phase 2 work factors are shown in Figure 6 and Figure 7.

ii. Criteria and Toxic Pollutant Emissions Standards

Over the last several decades, EPA has set progressively more stringent vehicle emissions standards for criteria pollutants. Most recently, in 2014, EPA adopted Tier 3 emissions standards. Unlike GHG standards, criteria pollutant standards are not attribute-based. The Tier 3 rule included standards for both light-duty and medium-duty vehicles. Similar to the prior Tier 2 standards, Tier 3 established “bins” of Federal Test Procedure (FTP) standards, shown in Table 22. Each bin contains a milligrams per mile (mg/mile) standard for non-methane organic gases (NMOG) plus oxides of nitrogen (NO_X) or NMOG+NO_X, particulate matter (PM), carbon monoxide (CO), and formaldehyde (HCHO).

Manufacturers select, or assign, a standards bin to each vehicle model and vehicles must meet all of the standards in that bin over the vehicle's full useful life. Each manufacturer must also meet a fleet average NMOG + NO_X standard each model year, which declines over a phase-in period for the Tier 3 final standards. The declining NMOG+NO_X standards are shown in Table 23. As shown, the fleet is split between two categories: (1) Passenger cars and small light trucks and (2) larger light trucks and MDPVs, with final NMOG+NO_X fleet average standards of 30 mg/mile for both vehicle categories.

The Tier 3 rule also established more stringent criteria pollutant emissions standards for MDVs. The Tier 3 MDV standards are also based on a bin structure, but with generally less stringent bin standards and with less stringent NMOG+NO_X fleet average standards. As discussed in Section III.A.1, the MDV category consists of vehicles with gross vehicle weight ratings (GVWR) between 8,501–14,000 pounds. For Tier 3, EPA set separate standards for two sub-categories of vehicles, Class 2b (8,501–10,000 pounds GVWR) and Class 3 (10,001–14,000 pounds GVWR) vehicles. Table 24 provides the final Tier 3 FTP standards bins for MDVs and Table 25 provides the NMOG+NO_X fleet average standards that apply to these vehicles in MYs 2018 and later. It is important to note that MDVs are tested at a higher test weight than light-duty vehicles, as discussed in Section III.B.3, and as such the numeric standards are not directly comparable across the light-duty and MDV categories.

EPA has also established supplemental Federal test procedure (SFTP) standards for light and medium-duty vehicles, as well as cold temperature standards for CO and HC. These standards address emissions outside of the FTP test conditions such as at high vehicle speeds and differing ambient temperatures. EPA is not reopening the current SFTP standards in this rulemaking.

3. EPA's Statutory Authority Under the Clean Air Act (CAA)

Title II of the Clean Air Act provides for comprehensive regulation of mobile sources, authorizing EPA to regulate emissions of air pollutants from all mobile source categories, including motor vehicles under CAA section 202(a). EPA is setting standards under multiple provisions of CAA section 202(a). GHG standards for all motor vehicles and light duty criteria pollutant standards are set under section 202(a)(1)–(2). Criteria pollutant standards for larger light-duty trucks and MDVs, which are considered “heavy-duty vehicles” under the CAA by virtue of having GVWR above 6,000 pounds, are being set pursuant to section 202(a)(3), which requires that standards applicable to emissions of hydrocarbons, NO_X, CO, and PM from heavy-duty vehicles (which includes MDVs) reflect the greatest degree of emission reduction available for the model year to which such standards apply, giving appropriate consideration to cost, energy, and safety. In turn, CAA section 216(2) defines “motor vehicle” as “any self-propelled vehicle designed for transporting persons or property on a street or highway.” Congress has intentionally and consistently used the broad term “any self-propelled vehicle” since the Motor Vehicle Control Act of 1965 so as not to limit standards adopted under CAA section 202 to vehicles running on a particular fuel, power source, or system of propulsion. Congress's focus was on emissions from classes of motor vehicles and the “requisite technologies” that could feasibly reduce those emissions giving appropriate consideration to cost of compliance and lead time, as opposed to being limited to any particular type of vehicle.

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.” CAA section 202(a)(1) also requires that any standards promulgated thereunder “shall be applicable to such vehicles and engines for their useful life (as determined under [CAA section 202(d)], relating to useful life of vehicles for purposes of certification), whether such vehicle and engines are designed as complete systems or incorporate devices to prevent or control such pollution.”

While emission standards set by the EPA under CAA section 202(a)(1) generally do not mandate use of particular technologies, they are technology-based, as the levels chosen must be premised on a finding of technological feasibility. Thus, standards promulgated under CAA section 202(a) are to take effect only “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.” CAA section 202(a)(2); see also NRDC v. EPA, 655 F. 2d 318, 322 (D.C. Cir. 1981). EPA must consider costs to those entities which are directly subject to the standards. Motor Equipment Mfrs. Ass'n Inc. v. EPA, 627 F. 2d 1095, 1118 (D.C. Cir. 1979). Thus, “the [s]ection 202(a)(2) reference to compliance costs encompasses only the cost to the motor-vehicle industry to come into compliance with the new emission standards, and does not mandate consideration of costs to other entities not directly subject to the proposed standards.” Coalition for Responsible Regulation, 684 F.3d at 128. EPA is afforded considerable discretion under section 202(a) when assessing issues of technical feasibility and availability of lead time to implement new technology. Such determinations are “subject to the restraints of reasonableness,” which “does not open the door to `crystal ball' inquiry.” NRDC, 655 F. 2d at 328, quoting International Harvester Co. v. Ruckelshaus , 478 F. 2d 615, 629 (D.C. Cir. 1973). However, “EPA is not obliged to provide detailed solutions to every engineering problem posed in the perfection of [a particular device]. In the absence of theoretical objections to the technology, the agency need only identify the major steps necessary for development of the device and give plausible reasons for its belief that the industry will be able to solve those problems in the time remaining. EPA is not required to rebut all speculation that unspecified factors may hinder `real world' emission control.” NRDC, 655 F. 2d at 333–34. In developing such technology-based standards, EPA has the discretion to consider different standards for appropriate groupings of vehicles (“class or classes of new motor vehicles”), or a single standard for a larger grouping of motor vehicles. NRDC, 655 F.2d at 338.

Although standards under CAA section 202(a)(1) are technology-based, they are not based exclusively on technological capability. Pursuant to the broad grant of authority in section 202, when setting emission standards for light duty vehicles EPA may also consider other factors and has done so previously when setting such standards. For instance, in recent light duty greenhouse gas rules, EPA has also considered such issues as: Technology effectiveness; its cost (per vehicle, per manufacturer, and per consumer); the feasibility and practicability of potential standards in light of the lead time available to implement the technology; the impacts of potential standards on emissions reductions of both GHGs and criteria pollutants; the impacts of standards on oil conservation and energy security; the impacts of standards on fuel savings by consumers; as well as other relevant factors such as safety.

In addition, EPA has clear authority to set standards under CAA section 202(a)(1)–(2) that are technology-forcing when EPA considers that to be appropriate but is not required to do so (as compared to standards under section 202(a)(3), which require the greatest degree of emissions reduction achievable, giving appropriate consideration to cost, energy and safety factors). CAA section 202(a) does not specify the degree of weight to apply to each factor, and EPA accordingly has discretion in choosing an appropriate balance among factors. See Sierra Club v. EPA, 325 F.3d 374, 378 (D.C. Cir. 2003) (even where a provision is technology-forcing, the provision “does not resolve how the Administrator should weigh all [the statutory] factors in the process of finding the `greatest emission reduction achievable' ”); National Petrochemical and Refiners Ass'n v. EPA, 287 F.3d 1130, 1135 (D.C. Cir. 2002) (EPA decisions, under CAA provision authorizing technology-forcing standards, based on complex scientific or technical analysis are accorded particularly great deference); see also Husqvarna AB v. EPA, 254 F. 3d 195, 200 (D.C. Cir. 2001) (great discretion to balance statutory factors in considering level of technology-based standard, and statutory requirement “to [give appropriate] consideration to the cost of applying . . . technology” does not mandate a specific method of cost analysis); Hercules Inc. v. EPA , 598 F. 2d 91, 106 (D.C. Cir. 1978) (“In reviewing a numerical standard we must ask whether the agency's numbers are within a zone of reasonableness, not whether its numbers are precisely right.”).

With regard to the specific technologies that could be used to meet the emission standards promulgated under the relevant statutory authorities, EPA's rules have historically not required the use of any particular technology, but rather have allowed manufacturers to use any technology that demonstrates the engines or vehicles meet the standards over the applicable test procedures. Similarly, in determining the standards, EPA appropriately considers updated data and analysis on pollution control technologies, without a priori limiting its consideration to a particular set of technologies. Given the continuous development of pollution control technologies since the early days of the CAA, this approach means that EPA routinely considers novel and projected technologies developed or refined since the time of the CAA's enactment, including, for instance, electric vehicle technologies. This forward-looking regulatory approach keeps pace with real-world technological developments and comports with Congressional intent.

Section 202 does not specify or expect any particular type of motor vehicle propulsion system to remain prevalent, and it was clear as early as the 1960s that ICE vehicles might be inadequate to achieve the country's air quality goals. In 1967, the Senate Committees on Commerce and Public Works held five days of hearings on “electric vehicles and other alternatives to the internal combustion engine,” which Chairman Magnuson opened by saying “The electric will help alleviate air pollution. . . . The electric car does not mean a new way of life, but rather it is a new technology to help solve the new problems of our age.” In a 1970 message to Congress seeking a stronger CAA, President Nixon stated he was initiating a program to develop “an unconventionally powered, virtually pollution free automobile” because of the possibility that “the sheer number of cars in densely populated areas will begin outrunning the technological limits of our capacity to reduce pollution from the internal combustion engine.”

Since the earliest days of the CAA, Congress has emphasized that the goal of section 202 is to address air quality hazards from motor vehicles, not to simply reduce emissions from internal combustion engines to the extent feasible. In the Senate Report accompanying the 1970 CAA Amendments, Congress made clear the EPA “is expected to press for the development and application of improved technology rather than be limited by that which exists” and identified several unconventional technologies that could successfully meet air quality-based emissions targets for motor vehicles. In the 1970 amendments Congress further demonstrated its recognition that developing new technology to ensure that pollution control keeps pace with economic development is not merely a matter of refining the ICE, but requires considering new types of motor vehicle propulsion. Congress provided EPA with authority to fund the development of “low emission alternatives to the present internal combustion engine” as well as a program to encourage Federal purchases of “low-emission vehicles.” See CAA section 104(a)(2) (previously codified as CAA section 212). Congress also adopted section 202(e) expressly to grant the Administrator discretion regarding the certification of vehicles and engines based on “new power source[s] or propulsion system[s],” that is to say, power sources and propulsion systems beyond the existing internal combustion engine and fuels available at the time of the statute's enactment, if those vehicles emit pollutants which the Administrator judges contribute to dangerous air pollution but has not yet established standards for under section 202(a). As the D.C. Circuit held in 1973, “We may also note that it is the belief of many experts–both in and out of the automobile industry–that air pollution cannot be effectively checked until the industry finds a substitute for the conventional automotive power plant–the reciprocating internal combustion ( i.e., “piston”) engine. . . . It is clear from the legislative history that Congress expected the Clean Air Amendments to force the industry to broaden the scope of its research–to study new types of engines and new control systems.” International Harvester Co. v. Ruckelshaus, 478 F.2d 615, 634–35 (D.C. Cir. 1973).

Since that time, Congress has continued to emphasize the importance of technology development to achieving the goals of the CAA. In the 1990 amendments, Congress instituted a clean fuel vehicles program to promote further progress in emissions reductions and the adoption of new technologies and alternative fuels, which also applied to motor vehicles as defined under section 216, see CAA section 241(1), and explicitly defined motor vehicles qualifying under the program as including vehicles running on an alternative fuel or “power source (including electricity),” CAA section 241(2). Congress also directed EPA to phase-in certain section 202(a) standards, see CAA section 202(g), which confirms EPA's authority to promulgate standards, such as fleet averages, phase-ins, and averaging, banking, and trading programs, that are fulfilled through compliance over an entire fleet, or a portion thereof, rather than through compliance by individual vehicles.

The recently enacted Inflation Reduction Act “reinforces the longstanding authority and responsibility of [EPA] to regulate GHGs as air pollutants under the Clean Air Act,” and “the IRA clearly and deliberately instructs EPA to use” this authority by “combin[ing] economic incentives to reduce climate pollution with regulatory drivers to spur greater reductions under EPA's CAA authorities.” The IRA specifically affirms Congress's previously articulated statements that non-ICE technologies will be a key component of achieving emissions reductions from the mobile source sector, and Congress provided a number of significant financial incentives for PEVs and the infrastructure necessary to support them. The Congressional Record reflects that “Congress recognizes EPA's longstanding authority under CAA section 202 to adopt standards that rely on zero emission technologies, and Congress expects that future EPA regulations will increasingly rely on and incentivize zero-emission vehicles as appropriate.”

Consistent with Congress's intent, EPA's CAA Title II emission standards have been based on and stimulated the development of a broad set of advanced automotive technologies, such as on-board computers and fuel injection systems, which have been the building blocks of automotive designs and have yielded not only lower pollutant emissions, but improved vehicle performance, reliability, and durability. Beginning in 2010, EPA has set standards under section 202 for GHGs and manufacturers have responded by continuing to develop and deploy a wide range of technologies, including more fuel-efficient engine designs, transmissions, aerodynamics, tires, materials improvements for mass reduction, as well as various levels of electrified vehicle technologies including mild hybrids, strong and plug-in hybrids, battery electric vehicles, and fuel cell electric vehicles. In addition, the continued application of performance-based standards with fleet-wide averaging provides an opportunity for all technology improvements and innovation to be reflected in a vehicle manufacturer's compliance results.

i. Testing Authority

Under section 203 of the CAA, sales of vehicles are prohibited unless the vehicle is covered by a certificate of conformity. EPA issues certificates of conformity pursuant to section 206 of the CAA, based on (necessarily) pre-sale testing conducted either by EPA or by the manufacturer. The Federal Test Procedure (FTP or “city” test) and the Highway Fuel Economy Test (HFET or “highway” test) are used for this purpose. Compliance with standards is required not only at certification but throughout a vehicle's useful life, so that testing requirements may continue post-certification. To assure each vehicle complies during its useful life, EPA may apply an adjustment factor to account for vehicle emission control deterioration or variability in use (section 206(a)).

EPA establishes the test procedures under which compliance with the CAA emissions standards is measured. EPA's testing authority under the CAA is broad and flexible. EPA has also developed tests with additional cycles (the so-called 5-cycle tests) which are used for purposes of fuel economy labeling, SFTP standards, and extending off-cycle credits under the light-duty vehicle GHG program.

ii. Compliance and Enforcement Authority

EPA oversees testing, collects and processes test data, and performs calculations to determine compliance with CAA standards. CAA standards apply not only at certification but also throughout the vehicle's useful life. The CAA provides for penalties should manufacturers fail to comply with their fleet average standards, and there is no option for manufacturers to pay fines in lieu of compliance with the standards. Under the CAA, penalties for violation of a fleet average standard are typically determined on a vehicle-specific basis by determining the number of a manufacturer's highest emitting vehicles that cause the fleet average standard violation. Penalties for reporting requirements under Title II of the CAA apply per day of violation, and other violations apply on a per vehicle, or a per part or component basis. See CAA sections 203(a) and 205(a) and 40 CFR 19.4.

Section 207 of the CAA grants EPA broad authority to require manufacturers to remedy vehicles if EPA determines there are a substantial number of noncomplying vehicles. In addition, under CAA section 207, manufacturers are required to provide emission-related warranties. CAA section 207(i) specifies that the warranty period for light-duty vehicles is 2 years or 24,000 miles of use (whichever first occurs), except for specified major emission control components, for which the warranty period is 8 years or 80,000 miles of use (whichever first occurs).

B. Proposed GHG Standards for Model Years 2027 and Later

1. Overview

This Section III.B provides details regarding EPA's proposed GHG standards and related program provisions. EPA is proposing significantly more stringent GHG standards for light and medium-duty vehicles for MYs 2027 and later. For light-duty, the proposed standards would further reduce the fleet average GHG emissions target levels by 56 percent from the MY 2026 standards, the final year of standards established in the 2021 rule. For MDVs, the standards would represent a reduction of 37 percent compared to the MY 2027 standards, the final phase year of the previously established Phase 2 standards for those vehicles.

Section III.B.2 provides details regarding the structure and level of the proposed light-duty vehicle standards while Section III.B.3 provides details regarding EPA's proposed GHG standards for MDVs. Additional GHG program provisions are discussed in Sections III.B.4–III.B.9, including averaging, banking, and trading, proposed air conditioning system requirements, proposed phase out of off-cycle credits, proposed treatment of PEVs and FCEVs in the GHG fleet average, and proposed alternative standards for small volume manufacturers.

2. Proposed Light-Duty Vehicle GHG Standards

i. Structure of the Existing Light-Duty Vehicle CO₂ Standards

Since MY 2012, EPA has adopted attribute-based standards for passenger cars and light trucks. The CAA has no requirement to promulgate attribute-based standards, though in past rules EPA has relied on both universal and attribute-based standards ( e.g., for nonroad engines, EPA uses the attribute of horsepower). However, given the advantages of using attribute-based standards, from MY 2012 onward EPA has adopted and maintained vehicle footprint as the attribute for the GHG standards. Footprint is defined as a vehicle's wheelbase multiplied by its track width—in other words, the area enclosed by the points at which the wheels meet the ground.

EPA has implemented footprint-based standards since MY 2012 by establishing two kinds of standards—fleet average standards determined by a manufacturer's fleet makeup, and in-use standards that will apply to the individual vehicles that make up the manufacturer's fleet. Under the footprint-based standards, each manufacturer has a CO₂ emissions performance target unique to its fleet, depending on the footprints of the vehicles produced by that manufacturer. While a manufacturer's fleet average standard could be estimated throughout the model year based on projected production volume of its vehicle fleet, the fleet average standard to which the manufacturer must comply is based on its final model year production figures. Each vehicle in the fleet has a compliance value which is used to calculate both the in-use standard applicable to that vehicle and the fleet average emissions. A manufacturer's calculation of fleet average emissions at the end of the model year will thus be based on the production-weighted average emissions of each vehicle in its fleet. EPA is not reopening the footprint-based structure for the standards or seeking comment on any alternatives to this structure.

Each manufacturer has separate footprint-based standards for cars and for trucks. EPA is not reopening the existing regulatory definitions of passenger cars and light trucks; we propose to continue to reference the NHTSA regulatory class definitions as EPA has done since the inception of the GHG program. Similarly, EPA is not requesting comment on alternatives to the regulatory class definitions which are being maintained.

ii. How did EPA determine the proposed slopes and relative stringencies of the car and truck footprint standards curves?

In this proposal, EPA is retaining vehicle footprint, the existing car/truck regulatory class definitions, and separate standards curves for each regulatory class, as in previous rulemakings. However, we propose to adjust the relative slope and offset between the car and truck footprint standards curves as described in this section.

We analyzed the fleet and found that most light-duty vehicles (which do not tow or haul) are used to move passengers and their nominal cargo and could be represented by a single curve. However, within our analysis we identified a subset of light trucks that provide additional towing and hauling capabilities which are more appropriately controlled with a modified set of standards. We have accommodated those vehicles by providing an additional GHG offset for this increased utility which is embodied in the truck curve. In this way, we maintain two curves—one for cars and one for trucks—that are closely related from an analytical perspective.

When setting GHG standards, EPA recognizes the current diversity and distribution of vehicles in the market and that Americans have widely varying preferences in vehicles and that GHG control technology is feasible for a wide variety of vehicles. This is one of the primary reasons for adopting attribute-based standards and is also an important consideration in choosing specific attribute-based standards ( i.e., the footprint curves). Over time, vehicle footprint sizes have steadily increased. This has partially offset gains in fuel economy and reductions in emissions. For example, in MY 2021, average fuel economy and emissions were essentially flat (despite improvements in emissions for all classes of vehicles) because of increases in the sizes of vehicles purchased. In developing footprint curves for this proposal, EPA's intent was to establish slopes that would not (of their own accord) initiate overall fleet upsizing or downsizing as a compliance strategy. A slope too flat would incentivize overall fleet downsizing, while a steep slope would foster upsizing. Fuller details on the analysis that was used to determine a “neutral” slope determination is provided in DRIA Chapter 1.1.3.

The slopes proposed in this rulemaking, especially the car curves, are flatter than those of prior rulemakings. This is by design and reflects our projection of the likelihood that a future fleet will be characterized by a greatly increased penetration of BEVs, even in a no-action scenario. Consider that for the 2012 LD GHG rulemaking, the footprint-based curves were originally developed for a fleet that was completely made up of internal combustion engine (ICE) vehicles. From a physics perspective, a positive footprint slope for ICE vehicles makes sense because as a vehicle's size increases, its mass, road loads, and required power (and corresponding tailpipe CO₂ emissions) will increase accordingly. However, because the proposed standards are based on tailpipe emissions (and upstream emissions are not included as part of a manufacturer's compliance calculation) for all vehicle types and BEVs emit zero tailpipe emissions, a fleet of all BEVs would emit 0 g/mi, regardless of their respective footprints. As the percentage of BEVs increases, the percentage of ICE vehicles (those vehicles correlated to a positive slope) decrease. Mathematically, the slope of the average footprint targets should trend towards zero as the percentage of BEVs increases.

All-wheel drive (AWD) is one of the defining features for crossover vehicles to be classified as light trucks, and for this reason the offset in tailpipe emissions targets ( i.e., between the car and truck regulatory classes) for these vehicles should be appropriately set. The design differences for many cross-over vehicle models that are offered in both a two-wheel drive (2WD) and an AWD version (aside from their driveline) are difficult to detect. They often have the same engine, similar curb weight (except for the additional weight of an AWD system), and similar operating features (although AWD versions might be offered at a premium trim level that is not required of the drivetrain). EPA analyzed empirical data for models that were offered in both 2WD and AWD versions to quantify the average increase in tailpipe emissions due to addition of AWD for an otherwise identical vehicle model.

The light truck classification consists of crossovers (ranging from compact up through large crossovers), sport utility vehicles and pickup trucks. Many crossover vehicles and SUVs exhibit similar towing capability between their 2WD and AWD versions (there are some exceptions in cases where AWD is packaged with a larger more powerful engine than the base 2WD version). However, full size pickup trucks are the light-duty market segment with the most towing and hauling capability. The purpose of maintaining a unique truck curve is centered around accounting for the utility of these vehicles in particular.

EPA is therefore proposing that the truck curve be based on the car curve (to represent the base utility across all vehicles for carrying people and their light cargo), but with the additional allowance of increased utility that distinguishes these vehicles used for more work-like activity. EPA determined a relationship between gross combined weight rating (GCWR) (which combines the cumulative utility for hauling and towing to a vehicle's curb weight) and required engine torque. EPA then used its ALPHA model to predict how the tailpipe emissions at equivalent test weight (ETW) (curb weight + 300 pounds) would increase as a function of increased utility (GCWR) based on required engine torque and assumed modest increases in vehicle weight and road loads commensurate with a more tow-capable vehicle.

EPA also assessed the relative magnitude of tow rating across the light truck fleet as a function of footprint. Vehicles with the greatest utility are full size pickup trucks, while light trucks with the least utility tend to be the smaller crossovers, with an increased tow or haul rating near zero. As a result, EPA proposes a simple offset for the truck curve, compared to the car curve, that increases with footprint.

The offsets for AWD and utility were then scaled as a function of the nominal fleet-wide BEV penetrations anticipated to be achieved under the proposed stringency levels. For example, in our feasibility assessment we would project approximately 50 percent BEV penetration on average across the fleet by MY 2030 and thus, the AWD offset and the utility-based offset for the MY 2030 were each multiplied by 50 percent to reflect the share of the new vehicle sales that are projected to remain as ICE vehicles for that year.

In summary, the truck curve is, mathematically, the sum of the scaled AWD and utility-based offsets to the car curve. A more thorough description of the truck curve as it relates to the car curve, and a discussion of the empirical and modeling data used in developing these offsets is presented in DRIA Chapter 1.1.3.2. EPA solicits comments on the proposed changes to the shape of the footprint curves, including the flattening of the car curve and our approach for deriving the truck curve from the car curve.

iii. How did EPA determine the proposed cutpoints for the footprint standards curves?

The cutpoints are defined as the footprint boundaries (low and high) within which the sloped portion of the footprint curve resides. Above the high, and below the low, cutpoints, the curves are flat. The rationale for the setting of the original cutpoints for the 2017–2025 rule was based on analysis of the distribution of vehicle footprint for the 2008 fleet and is discussed in the 2012 proposal and the Technical Support Document (TSD).

EPA is proposing to increase the lower cutpoint for the car and truck curves by 1 square foot per year from MY 2027 through MY 2030 from 41 to 45 square feet. This will provide slightly less stringent standards for the smallest vehicles and may encourage more vehicle model offerings by manufacturers of these vehicles, which are already among the cleanest vehicles and which may be more accessible to lower-income households. At a minimum, EPA believes the structure of the footprint standards should not disincentivize manufacturers from offering these smallest vehicles, as the continuation of offerings in this segment is an important affordability consideration.

EPA is also proposing to gradually reduce the upper cutpoint for trucks, which will be 74.0 square feet starting in 2023 through 2026, and then decreasing by 1.0 square foot per year from MY 2027 through MY 2030 (down to 70.0 square feet by MY 2030). As the upper cutpoint for trucks has increased from 66.0 square feet in 2016 to 69.0 square feet in 2020, we have witnessed a corresponding trend towards larger full size pickup trucks which are subject to less stringent CO₂ targets. The proposed MY 2030 upper truck cutpoint of 70.0 square feet (consistent with the sales-weighted average footprint of current full-size pickups) is intended to help ensure no loss of emissions reductions in the future through upsizing. However, we do not view the cutpoints as a primary driver for significant additional emissions reductions beyond those achieved by the year-over-year change in the curves. Both the truck size trend and an analysis of truck footprint vs. CO₂ are detailed in DRIA Chapter 1.3. The upper cutpoint for cars (56 feet) will remain unchanged.

EPA requests comments on the proposed cutpoints and may consider different cutpoints based on comments in the final rule.

iv. What are the proposed light-duty vehicle CO₂ standards?

a. What CO₂ footprint standards curves is EPA proposing?

EPA is proposing separate car and light truck standards—that is, vehicles defined as passenger vehicles (“cars”) would have one set of footprint-based standards curves, and vehicles defined as light trucks would have a different set. In general, for a given footprint, the CO₂ g/mile target for trucks is higher than the target for a car with the same footprint. The curves are described mathematically in EPA's regulations by a family of piecewise linear functions (with respect to vehicle footprint) that gradually and continually ramp down from the MY 2026 curves established in the 2021 rule. EPA's proposed minimum and maximum footprint targets and the corresponding cutpoints are provided for cars and trucks, respectively, in Table 26 and Table 27 for MYs 2027–2032 along with the slope and intercept defining the linear function for footprints falling between the minimum and maximum footprint values. For footprints falling between the minimum and maximum, the targets are calculated as follows: Slope × Footprint + Intercept = Target.

Figure 8 and Figure 9 show the car and truck curves, respectively, for MY 2027 through MY 2032. Included for reference is the original MY 2026 curve for each. However, to compare tailpipe stringency between MY 2026 with the proposed standards, it was necessary to adjust the MY 2026 curve to reflect the proposed reduction in allowable AC and off-cycle credits effective in MY 2027. In the figures, the adjusted MY 2026 curve has been increased by the amount of the total credits reduced from MY 2026 to MY 2027. The magnitude of this adjustment is calculated in Table 28.

As discussed in Section III.B.2.ii, the slope of the car curve is significantly flatter in 2027 and continues to flatten progressively each year through 2032. The truck curve, largely driven by the allowance for towing utility, has a similar shape as in past rulemakings although its slope also flattens progressively each year from 2027 through 2032.

b. What fleet-wide CO₂ emissions levels correspond to the standards?

EPA is proposing more stringent standards for MYs 2027–2032 that are projected to result in an industry-wide average target for the light-duty fleet of 82 g/mile of CO₂ in MY 2032. The projected average annual decrease in combined industry average targets from the current standards in MY 2026 to the new standards in MY 2032 is 12.8 percent per year. Compared to past rulemakings the annual percentage reductions are significantly higher; however, EPA's feasibility assessments in past rulemakings were predominantly based on ICE-based technologies that provided incremental tailpipe GHG reductions. Since then, advancements in BEV technology and the increasing feasibility of BEVs as an available and reasonable-cost compliance technology have changed the magnitude of the emissions reductions that will be achievable during the timeframe of this rulemaking compared to prior rules. The combination of economic incentives provided in the IRA and the auto manufacturers' stated plans for producing significant volumes of zero and near-zero emission vehicles in the timeframe of this rule makes it possible for EPA to propose standards at a level of stringency greater than was feasible in past rules. While tailpipe emissions controls for criteria pollutants from conventional ICE-based vehicles can have effectiveness values greater than 90 percent under certain circumstances, electrification provides 100 percent effectiveness under all operating and environmental conditions. This is nearly two orders of magnitude more effective than the historical improvements in GHG emission reductions.

EPA is not reopening its current approach of having separate standards for cars and light trucks under existing program definitions. The 82 g/mile estimated industry-wide target for MY 2032 noted in the previous paragraph is based on EPA's current fleet mix projections for MY 2032 (approximately 40 percent cars and 60 percent trucks, assuming only slight variations from MY 2026). As is the nature of attribute-based standards, the final fleet average standards for each manufacturer ultimately will depend on each manufacturer's actual rather than projected production in each MY from MY 2027 to MY 2032 under the sales-weighted footprint-based standard curves for the car and truck regulatory classes. Figure 10 shows the projected industry-average CO₂ targets based on projected fleet mix through MY 2032.

Prior EPA standards have been based in part on EPA's projection of average industry wide CO₂ -equivalent emission reductions from AC improvements, where the footprint curves were made numerically more stringent by an amount equivalent to this projection of AC refrigerant leakage credits. As discussed in Section III.B.5–6, EPA is proposing to end refrigerant-based credits in MY 2027, to limit off-cycle credits and AC efficiency credits to vehicles equipped with an IC engine, and to phase-out off-cycle credits.

Table 29 shows overall fleet average target levels for both cars and light trucks that are projected for the proposed standards. A more detailed manufacturer by manufacturer break down of the projected CO₂ targets and achieved levels is provided in DRIA Chapter 13. The actual fleet-wide average g/mile level that would be achieved in any year for cars and trucks will depend on the actual production of vehicles for that year, as well as the use of the various credit and averaging, banking, and trading provisions. For example, in any year, manufacturers would be able to generate credits from cars and use them for compliance with the truck standard, or vice versa. In DRIA Chapter 9.6, EPA discusses the year-by-year estimate of GHG emissions reductions that are projected to be achieved by the proposed standards.

In general, the structure of the proposed standards allows an incremental phase-in to the MY 2032 level and reflects consideration of the appropriate lead time for manufacturers to take actions necessary to meet the proposed standards. The technical feasibility of the standards is discussed in Section IV.A and in the DRIA. Note that MY 2032 is the final MY in which the proposed CO₂ standards would become more stringent. The MY 2032 standards would remain in place for later MYs, unless and until revised by EPA in a future rulemaking for those MYs.

EPA is requesting comments on whether the standards should increase in stringency beyond MY 2032. EPA seeks comment on whether the trajectory ( i.e., the levels of year-over-year stringency rates) of the proposed standards for MYs 2027 through 2032 should be extended through 2033, 2034 or 2035, or whether EPA should consider additional approaches to the trajectory of any standards that were to continue increasing in stringency beyond 2032. EPA is interested in stakeholders' feedback on any additional data and information that could inform EPA's consideration of potential standards beyond MY 2032. This request for comment on standards beyond MY 2032 is not specific to the light-duty GHG program but also for the medium-duty GHG program and the criteria pollutant standards as well.

EPA has estimated the overall fleet-wide CO₂ emission levels that correspond with the attribute-based footprint standards, based on projections of the composition of each manufacturer's fleet in each year of the program. As shown in Table 29, for passenger cars, the proposed MY 2032 standards are projected to result in CO₂ fleet-average levels of 73 g/mi in MY 2032, which is 52 percent lower than that of the (adjusted) MY 2026 standards. For trucks, the projected MY 2032 fleet average CO₂ target is 89 g/mi which is 57 percent lower than that of the (adjusted) MY 2026 standards. The projected MY 2032 combined fleet target of 82 g/mi is 56 percent lower than that of the (adjusted) MY 2026 standards.

The derivation of the 82 g/mile estimate is described in Section IV.D. EPA aggregated the estimates for individual manufacturers based on projected production volumes into the fleet-wide averages for cars, trucks, and the entire fleet. The combined fleet estimates are based on a projected fleet mix of cars and trucks that varies over the MY 2027–2032 timeframe.

EPA is proposing standards that set increasingly stringent levels of CO₂ control from MY 2027 though MY 2032. Applying the CO₂ footprint curves applicable in each MY to the vehicles (and their footprint distributions) expected to be sold in each MY produces progressively more stringent estimates of fleet-wide CO₂ emission standards. EPA believes manufacturers can achieve the proposed standards' important CO₂ emissions reductions through the application of available control technology at reasonable cost, as well as the use of program averaging, credit banking and trading, and optional air conditioning efficiency credits and off-cycle credits, as available.

While EPA believes the proposed standards are appropriate for light-duty vehicle manufacturers on an overall industry basis, we recognize that some companies have made public announcements for plans for zero emission vehicle product launches (as discussed in Section I.A.2.ii) that may lead to CO₂ emissions even lower than those projected under the proposed standards. The existing program's averaging, banking, and trading provisions allow manufacturers to earn credits for overcompliance with the standards that can be banked for the company's future use (up to five model years) or traded to other companies (as discussed further in Section III.B.4). Beyond these credit banking and trading provisions, EPA is interested in public comments on whether there could be additional ways in which the program could provide for alternative pathways that could encourage manufacturers to achieve even lower CO₂ emissions earlier in the program; for example, by producing higher volumes of zero-emission vehicles earlier than would be necessitated under the proposed standards. Such an alternative pathway could be one way to recognize the environmental benefits of earlier introductions of even greater volumes of the cleanest vehicles. EPA seeks public comment on the potential merits of such an alternative pathway concept, whether it would be advantageous for both the GHG as well as the criteria pollutant standards program, and how it might be structured.

The existing program includes several provisions that we are not reopening and so would continue during the implementation timeframe of this proposed rule. Consistent with the requirement of CAA section 202(a)(1) that standards be applicable to vehicles “for their useful life,” the proposed MY 2027–2032 vehicle standards will apply for the useful life of the vehicle. EPA is proposing one test procedure change and that is the use of Tier 3 test fuel to demonstrate GHG compliance as described in Section III.B.2.iv.c; criteria pollutant standard demonstration already require the use of Tier 3 fuel. No other changes are proposed to the test procedures over which emissions are measured and weighted to determine compliance with the GHG standards. These procedures are the Federal Test Procedure (FTP or “city” test) and the Highway Fuel Economy Test (HFET or “highway” test). While EPA may consider requiring the use of test procedures other than the 2-cycle test procedures in a future rulemaking, EPA is not considering any test procedure changes in this rulemaking.

EPA has analyzed the feasibility of achieving the proposed CO₂ standards through the application of currently available technologies, based on projections of the technology and technology penetration rates to reduce emissions of CO₂, during the normal redesign process for cars and trucks, taking into account the effectiveness and cost of the technology. The results of the analysis are discussed in detail in Section IV, and in the DRIA. EPA also presents the overall estimated costs and benefits of the proposed car and truck CO₂ standards in Section VIII.

c. What test fuel is EPA proposing?

Within the structure of the footprint-based GHG standards, EPA is also proposing that gasoline powered vehicle compliance with the proposed standards be demonstrated on Tier 3 test fuel. The current GHG standards for light-duty gasoline vehicles are set on the required use of Indolene, or Tier 2 test fuel. Tier 3 test fuel more closely represents the typical market fuel available to consumers in that it contains 10 percent ethanol. EPA proposed an adjustment factor to allow demonstration of compliance with the existing GHG standards using Tier 3 test fuel but has not yet adopted those changes (85 FR 28564, May 13, 2020). This proposal does not include an adjustment factor for tailpipe GHG emissions but rather requires manufacturers to test on Tier 3 test fuel and use the resultant tailpipe emissions directly in their compliance calculation. Such an adjustment factor is not required because the technology penetrations, feasibility, and cost estimates in this proposal are based on compliance using Tier 3 test fuel.

Both the current and proposed criteria pollutant standards were set based on vehicle performance with Tier 3 test fuel; as a result, manufacturers currently use two different test fuels to demonstrate compliance with GHG and criteria pollutant standards. Setting new GHG standards based on Tier 3 test fuel is intended to address concern for test burden related to using two different test fuels.

The difference in GHG emissions between the two fuels is small but significant. EPA estimates that testing on Tier 3 test fuel will result in about 1.5 percent lower CO₂ emissions. Because this difference in GHG emissions between the two fuels is significant in the context of measuring compliance with existing GHG standards, but small relative to the change in stringency of the proposed GHG standards, and because the cost of compliance on Tier 3 test fuel is reflected in this analysis for this proposal, EPA believes that this rulemaking and the associated proposed new GHG standards create an opportune time to shift compliance to Tier 3 fuel.

EPA is proposing to apply the change from Indolene to Tier 3 test fuel for demonstrating compliance with GHG standards starting in model year 2027. Manufacturers may optionally carry-over Indolene-based for test results for model years 2027 through 2029. We accordingly propose to allow manufacturers to continue to rely on the interim provisions adopted in 40 CFR 600.117 through model year 2029. These interim provisions address various testing concerns related to the arrangement for using different test fuels for different purposes.

For manufacturers that rely on testing with Indolene in model years 2027 through 2029, we propose to allow manufacturers to use good engineering judgment to apply a downward adjustment of 1.0166 percent to GHG emission test results as a correction to correlate with test results that would be expected when testing with Tier 3 test fuel. We separately proposed to apply an analogous correction for the opposite arrangement—testing with Tier 3 test fuel to demonstrate compliance with a GHG standard referenced to Indolene test fuel (85 FR 28564; May 13, 2020). We did not separately finalize the provisions in that proposed rule.

Similar considerations apply for measuring fuel economy, both to meet Corporate Average Fuel Economy requirements and to determine values for fuel economy labeling. EPA is proposing to apply the corrections described in the 2020 proposal. Those changes include: (1) New test fuel specifications for specific gravity and carbon weight fraction to properly calculate emissions in a way that accounts for the fuel properties of ethanol, (2) a revised equation for calculating fuel economy that uses an “R-factor” of 0.81 to account for the greater energy content of Indolene, and (3) amended instructions for calculating fuel economy label values based on 5-cycle values and derived 5-cycle values. Our overall goal is for manufacturers to transition to fuel economy testing with Tier 3 test fuel on the same schedule as described for demonstrating compliance with GHG standards in the preceding paragraphs. We will be reevaluating comments received on the 2020 proposal as well as the comments for this proposal and considering if any corrections and adjustments are required, with any appropriate modifications based on the comments received and on the changing circumstances reflected in the current proposed rule for setting new standards for MY 2027 and later vehicles. The proposed change to Tier 3 test fuel impacts the demonstration of compliance with GHG and fuel economy standards and the fuel economy label. In addition, several vehicle manufacturers have requested to move to Tier 3 test fuel in advance of the MY 2027 start of this proposed program.

For the GHG compliance program, we are proposing to evaluate GHG compliance with standards that are set using Tier 3 fuel starting in MY 2027; therefore, any vehicles that continue to be tested on Indolene, would need to have the results adjusted to be consistent with results on Tier 3 fuel. For the CAFE fuel economy standards, we are proposing to continue to evaluate fuel economy compliance with standards that are established on Indolene; therefore, any vehicles that are tested on Tier 3 fuel would need to have the results adjusted to be consistent with results on Indolene. Similar to the CAFE fuel economy standards, we are proposing to keep the fuel economy label consistent with the current program; therefore, any vehicles that are tested on Tier 3 fuel would need to have the results adjusted to be consistent with results on Indolene.

Supported by the data and analysis in the 2020 proposal, EPA proposes the following (Table 30) to address fuel-related testing and certification requirements through the transition to the proposed standards. Vehicle manufacturers may choose to test their vehicles with either Indolene or Tier 3 test fuel through MY 2029. Manufacturers must certify all vehicles to GHG standards using Tier 3 test fuel starting in MY 2027; however, manufacturers may continue to meet fuel economy requirements through MY 2029 for any appropriate vehicles based on carryover data from testing performed before MY 2027.

EPA requests comment regarding the implementation of this test fuel change and whether the change to Tier 3 test fuel should apply to GHG standards only or to GHG standards, fuel economy standards and fuel economy and environmental label combined, as described in Table 30.

3. Proposed Medium-Duty Vehicle GHG Standards

i. What CO₂ standards curves is EPA proposing?

Medium-duty vehicles (8,501 to 14,000 pounds GVWR) that are not categorized as MDPVs utilize a “work-factor” metric for determining GHG targets. Unlike the light-duty attribute metric of footprint, which is oriented around a vehicle's usage for personal transportation, the work-factor metric is designed around work potential for commercially oriented vehicles and accounts for a combination of payload, towing and 4-wheel drive equipment.

Our proposed GHG standards for MDVs are entirely chassis-dynamometer based and continue to be work-factor-based as with the previous heavy-duty Phase 2 standards. The standards also continue to use the same work factor (WF) and GHG target definitions (81 FR 73478, October 25, 2016). However, for MDVs above 22,000 pounds GCWR, we are proposing to limit the GCWR input into the work factor equation to 22,000 pounds GCWR in order to prevent increases in the GHG emissions target standards that are not fully captured within the loads and operation reflected during chassis dynamometer GHG emissions testing. The testing methodology does not directly incorporate any GCWR ( i.e., trailer towing) related direct load or weight increases; however, they are reflected in the higher target standards when calculating the GHG targets using GCWR values above 22,000 pounds Without some limiting “cap,” the resulting high target standards relative to actual measured performance are unsupported and may generate windfall compliance credits for higher GCWR ratings.

CO₂ e Target (g/mi) = [a × WF] + b

WF = Work Factor = [0.75 × [Payload Capacity + xwd] + [0.25 × Towing Capacity]

Payload Capacity = GVWR (lb.)−Curb Weight (lb.)

xwd = 500 lb. if equipped with 4-wheel-drive, otherwise 0 lb.

Towing Capacity = GCWR (lb.)−GVWR (lb.)

and with a and b as defined in Table 31:

The MDV target GHG standards are compared to the current HD Phase 2 gasoline standards in Figure 11. Note that the standards continue beyond the data markers shown in Figure 11. The data markers within the figure reflect the approximate transition from light-duty trucks to MDVs at a WF of approximately 3,000 pounds and the approximate location of 22,000 pounds GCWR in work factor space ( e.g., a WF of approximately 5,500 pounds). Beginning in 2027, the MDV GHG program moves gasoline, diesel, and PEV MDVs to fuel-neutral standards, i.e., identical standards regardless of the fuel or energy source used. We consider these standards feasible taking into consideration the opportunities for increased MDV electrification, primarily within the van segment.

The smaller displacement diesel engines remaining within the MDV program are currently within the van segment and are all derived from passenger car or other light-duty applications. The gasoline MDVs have also historically used engines derived from light-duty applications. The larger displacement (6L and above) diesel engines in Class 2b and Class 3 applications all have GCWR above (in some cases, significantly above) 22,000 pounds and were not derived from light-duty applications.

The agency seeks comment on the proposed target standards for MDV for the different model years and the approach of a single target for all propulsion fuels including zero emission technologies. The agency also seeks comment on the appropriateness of the proposed GCWR input limit to the work factor equation to more accurately capture the work performed as tested.

ii. What fleet-wide CO₂ emissions levels correspond to the standards?

Table 32 shows overall fleet average target levels for both medium-duty vans and pickup trucks that are projected for the proposed standards. A more detailed break-down of the projected CO₂ targets and achieved levels is provided in DRIA Chapter 13. The actual fleet-wide average g/mile level that would be achieved in any year for medium-duty vans and pickup trucks will depend on the actual production of vehicles for that year, as well as the use of the credit averaging, banking, and trading provisions.

iii. MDV Incentive Multipliers

In HD GHG Phase 1, EPA provided advanced technology credits for heavy-duty vehicles and engines, including for MDVs. EPA included incentive multipliers in Phase 1 for hybrid powertrains, all-electric vehicles, and fuel cell electric vehicles to promote the implementation of advanced technologies that were not included in our technical basis of the feasibility of the Phase 1 emission standards (see 40 CFR 86.1819–14(k)(7), 1036.150(h), and 1037.150(p)). For MDV, the HD GHG Phase 2 CO₂ emission standards that followed Phase 1 were premised on the use of mild hybrid powertrains and we removed mild hybrid powertrains as an option for advanced technology credits. At the time of the HD GHG Phase 2 final rule, we believed the HD GHG Phase 2 standards themselves provided sufficient incentive to develop those specific technologies. However, none of the HD GHG Phase 2 standards for MDV were based on projected utilization of the other, even more-advanced Phase 1 advanced credit technologies ( e.g., plug-in hybrid electric vehicles, all-electric vehicles, and fuel cell electric vehicles). For HD GHG Phase 2, EPA promulgated advanced technology credit multipliers through MY 2027, as shown in Table 33 (see also 40 CFR 1037.150(p)).

As stated in the HD GHG Phase 2 rulemaking, our intention with these multipliers was to create a meaningful incentive for those manufacturers considering developing and applying these qualifying advanced technologies into their vehicles. The multipliers under the existing program are consistent with values recommended by CARB in their HD GHG Phase 2 comments. CARB's values were based on a cost analysis that compared the costs of these advanced technologies to costs of other GHG-reducing technologies. CARB's cost analysis showed that multipliers in the range we ultimately promulgated as part of the HD GHG Phase 2 final rule would make these advanced technologies more competitive with the other GHG-reducing technologies and could allow manufacturers to more easily generate a viable business case to develop these advanced technologies for HD vehicles and bring them to market at a competitive price.

In establishing the multipliers in the HD GHG Phase 2 final rule, we also considered the tendency of the HD sector to lag behind the light-duty sector in the adoption of a number of advanced technologies. There are many possible reasons for this, such as:

—HD vehicles are more expensive than light-duty vehicles, which makes it a greater monetary risk for purchasers to invest in new technologies.

—These vehicles are primarily work vehicles, which makes predictable reliability of existing technologies and versatility important.

—Sales volumes are much lower for HD vehicles, especially for some specialized vehicles applications.

At the time of the HD GHG Phase 2 rulemaking, we concluded that as a result of factors such as these, and the fact that adoption rates for the aforementioned advanced technologies in HD vehicles were essentially non-existent in 2016, it seemed unlikely that market adoption of these advanced technologies would grow significantly within the next decade without additional incentives.

As we stated in the HD GHG Phase 2 final rule preamble, our determination that it was appropriate to provide large multipliers for these advanced technologies, at least in the short term, was because these advanced technologies have the potential to lead to very large reductions in GHG emissions and fuel consumption, and advance technology development substantially in the long term. However, because the credit multipliers are so large, we also stated that they should not be made available indefinitely. Therefore, they were included in the HD GHG Phase 2 final rule as an interim program continuing only through MY 2027.

The HD GHG Phase 2 advanced technology credit multipliers represent a tradeoff between incentivizing new advanced technologies that could have significant benefits well beyond what is required under the standards and providing credits that do not reflect real world reductions in emissions, which could allow higher emissions from credit-using engines and vehicles. At low adoption levels, we believe the balance between the benefits of encouraging additional electrification as compared to any negative emissions impacts of multipliers would be appropriate and would justify maintaining the current advanced technology multipliers. At the time we finalized the HD GHG Phase 2 program in 2016, we balanced these factors based on our estimate that there would be very little market penetration of ZEVs in the heavy-duty market in the MY 2021 to MY 2027 timeframe, during which the advanced technology credit multipliers would be in effect. Additionally, the primary technology packages in our technical assessment of the feasibility of the HD GHG Phase 2 standards did not include any ZEVs.

In our assessment conducted during the development of HD GHG Phase 2, we found only one manufacturer had certified HD BEVs through MY 2016, and we projected “limited adoption of all-electric vehicles into the market” for MYs 2021 through 2027. However, as discussed in Section IV, we are now in a transitional period where manufacturers are actively increasing their PHEV and BEV vehicle offerings and are being further supported through the IRA tax credits, and we expect this growth to continue through the remaining timeframe for the HD GHG Phase 2 program and into the time frame of the proposed program.

While we did anticipate some growth in electrification would occur due to the credit incentives in the HD GHG Phase 2 final rule when we finalized the rule, we did not expect the level of innovation since observed, or the IRA or BIL incentives. Based on this new information, we believe the existing advanced technology multiplier credit levels for MDVs are no longer appropriate for maintaining the balance between encouraging manufacturers to continue to invest in new advanced technologies over the long term and potential emissions increases in the short term. We believe that, if left as is, the MDV multiplier credits may allow for backsliding of emission reductions expected from ICE vehicles for some manufacturers in the near term ( i.e., the generation of excess credits which could delay the introduction of technology in the near or mid-term) as sales of advanced technology MDVs which can generate the incentive credit continue to increase. In light of the rapid increase in vehicle electrification in the MDV market, EPA proposes to remove the BEV, PHEV, and FCEV multipliers for MY 2027 (EPA is not proposing revisions or requesting comment in this proposed rulemaking on the Phase 2 multipliers for the vocational vehicle and tractor vehicle segments of the heavy-duty Phase 2 program). We also request comment on phasing out the multipliers over multiple model years by revising the multipliers to reduce their magnitude for model years prior to MY 2027, for example for MYs 2025–2026. We note that we did not rely on credits generated from credit multipliers in developing the proposed MDV GHG standards, nor did EPA assess the impacts of the Phase 2 multipliers on our feasibility assessment. We request comment, including data analysis, regarding the potential impact of Phase 2 MDV multipliers on our proposed standards in this action, and how EPA should consider such comments in the determining the continued appropriateness of the Phase 2 multipliers for MDVs.

4. Averaging, Banking, and Trading Provisions for GHG Standards

Averaging, banking, and trading (ABT) is an important compliance flexibility that has long been built into various highway engine and vehicle programs (and nonroad engine and equipment programs) to support emissions standards that, through the introduction and application of new technologies, result in reductions in air pollution. EPA's first mobile source program to feature averaging was issued in 1983 and included averaging for diesel light-duty vehicles to provide flexibility in meeting new PM standards. EPA introduced NO_X and PM averaging for highway heavy-duty vehicles in 1985. EPA introduced credit banking and trading in 1990 with new more stringent highway heavy-duty NO_X and PM standards to provide additional compliance flexibility for manufacturers. Since those early rules, EPA has included ABT in many programs across a wide range of mobile sources. For light-duty vehicles, EPA has included ABT in several criteria pollutant emissions standards rules including in the National Low Emissions Vehicle (NLEV) program, the Tier 2 standards, and the Tier 3 standards. ABT has also been a key feature of all GHG rules for both light-duty and heavy-duty vehicles.

ABT is important because it can help to address issues of technological feasibility and lead-time, as well as considerations of cost. In many cases, ABT resolves issues of lead-time or technical feasibility, enabling automakers to comply with standards that are more economically efficient and with less lead time. This provides important environmental benefits and at the same time it increases flexibility and reduces costs for the regulated industry. Furthermore, by encouraging automakers to exceed minimum requirements where possible, the ABT program encourages technological innovation, which makes further reductions in fleetwide emissions possible. The light-duty ABT program for GHG standards includes existing provisions initially established in the 2010 rule for how credits may be generated and used within the program. These provisions include credit carry-forward, credit carry-back (also called deficit carry-forward), credit transfers (within a manufacturer), and credit trading (across manufacturers). The MDV GHG program includes similar ABT provisions. EPA is explaining the ABT provisions of the GHG program for the public's convenience and information but is not proposing changes or reopening these provisions.

Credit carry-forward refers to banking (saving) credits for future use, after satisfying any needs to offset prior MY debits within a vehicle category (car fleet or truck fleet). Credit carry-back refers to using credits to offset any deficit in meeting the fleet average standards that had accrued in a prior MY. A manufacturer may have a deficit at the end of a MY (after averaging across its fleet using credit transfers between cars and trucks)—that is, a manufacturer's fleet average emissions level may fail to meet the manufacturer's required fleet average standard for the MY, for a limited number of model years, as provided in the regulations. The CAA does not specify or limit the duration of such credit provisions. In previous rules, EPA chose to generally adopt 5-year credit carry-forward and 3-year credit carry-back provisions as a reasonable approach that maintained consistency between EPA's GHG and NHTSA CAFE regulatory provisions. While some stakeholders had suggested that light-duty GHG credits should have an unlimited credit life, EPA did not adopt that suggestion for the light-duty GHG program because it would pose enforcement challenges and could lead to some manufacturers accumulating large banks of credits that could interfere with the program's goal to develop and transition to progressively more advanced emissions control technologies in the future.

Transferring credits in the GHG program refers to exchanging credits between the two averaging sets—passenger cars and light trucks—within a manufacturer. For example, credits accrued by overcompliance with a manufacturer's car fleet average standard can be used to offset debits accrued due to that manufacturer not meeting the truck fleet average standard in a given model year. MDVs are a separate averaging set and credits are not allowed to be transferred between vehicles meeting the light and medium-duty GHG standards due to the very different standards structure, vehicle testing differences ( e.g., MDVs are tested at an adjusted loaded vehicle weight of vehicle curb weight plus half payload whereas light-duty vehicles are tested at an estimated test weight of curb weight plus 300 pounds) and marketplace competitiveness issues. This prohibition includes traded credits such that, once traded, credits may not be transferred between the light and medium-duty fleets. Finally, accumulated credits may be traded to another manufacturer. Credit trading has occurred on a regular basis in EPA's light-duty vehicle program. Manufacturers acquiring credits may offset credit shortfalls and bank credits for use toward future compliance within the carry-forward constraints of the program.

The ABT provisions are an integral part of the vehicle GHG program, and the agency expects that manufacturers will continue to utilize these provisions into the future. EPA's annual Automotive Trends Report provides details on the use of these provisions in the GHG program. ABT allows EPA to consider standards more stringent than we would otherwise consider by giving manufacturers an important tool to resolve any potential lead time and cost issues. EPA is not proposing any revisions to the GHG program ABT provisions or reopening them.

5. Proposed Vehicle Air Conditioning System Related Provisions

EPA has included air conditioning (AC) system credits in its light-duty GHG program since the initial program adopted in the 2010 rule. Although the use of AC credits has been voluntary, EPA has consistently adjusted the level of the CO₂ standards downward, making them more stringent, to reflect the availability of the credits. Manufacturers opting not to use the AC credits would need to meet the standards through additional CO₂ reductions. EPA is proposing to revise the AC credits program for light-duty vehicles in two ways. First, for AC system efficiency credits, EPA is proposing to limit the eligibility for voluntary credits for tailpipe CO₂ emissions control to ICE vehicles starting in MY 2027 ( i.e., BEVs would not earn AC efficiency credits). Second, for AC refrigerant leakage control, EPA is proposing to remove the credit. EPA is also proposing to sunset the refrigerant-related provisions applicable to MDV standards. EPA requests comment on its proposed changes to the AC credit program.

i. Background on AC Credits in Current Programs

There are two mechanisms by which AC systems contribute to the emissions of GHGs: Through leakage of hydrofluorocarbon refrigerants into the atmosphere (sometimes called “direct emissions”) and through the consumption of fuel to provide mechanical power to the AC system (sometimes called “indirect emissions”). When EPA established the current light-duty refrigerant credits in the 2012 rule, the most common refrigerant was hydrofluorocarbon (HFC) 134a which has a global warming potential of 1430. The high global warming potential of HFC–134a, means that leakage of a gram of HFC134(a) would have 1430 times the global warming potential of a gram of CO₂ . Since the 2012 rule, manufacturers have reduced the impacts of refrigerant leakage significantly by using systems that incorporate leak-tight components, or, ultimately, by using a refrigerant with a lower global warming potential. Manufacturers have steadily increased their use of low GWP refrigerant HFO–1234yf which has a GWP of 4, much lower than the GWP of the HFC refrigerant it replaces. The AC system also contributes to increased tailpipe CO₂ emissions through the additional work required to operate the compressor, fans, and blowers. This additional power demand is ultimately met by using additional fuel, which is converted into CO₂ by the engine during combustion and exhausted through the tailpipe. These emissions can be reduced by increasing the overall efficiency of an AC system, thus reducing the additional load on the engine from AC operation, which in turn means a reduction in fuel consumption and a commensurate reduction in CO₂ emissions.

EPA has consistently adjusted the stringency of the light-duty CO₂ footprint curves to reflect the availability of AC credits by shifting the footprint curves downward. In the 2012 rule and again in subsequent rules, EPA increased the stringency of the footprint curves by a total of 19 g/mile for cars and 24 g/mile for trucks to reflect the availability and anticipated use of the relatively low-cost AC credit opportunities.

For MDVs, EPA adopted a somewhat different approach to address AC refrigerant emissions. In the Phase 1 rule, EPA adopted a refrigerant leakage standard rather than a voluntary credit program. This approach eliminated the need to adjust the CO₂ work factor-based standards to account for the availability of refrigerant-based credit, as EPA has done in setting the prior light-duty standards. EPA projected that manufacturers would meet the leakage standard either through the use of leak tight components or through the use of alternative refrigerants. In the Phase 2 rule, EPA revised the refrigerant leakage standard to be refrigerant neutral. The MDV program does not include AC efficiency related credits or requirements.

ii. Proposed Modifications to the AC Efficiency Credits

The current light-duty vehicle AC indirect emissions reduction credits in 40 CFR 86.1868–12, which EPA also commonly refers to as AC efficiency credits, are based on a technology menu with a testing component to confirm that the technologies provide emissions reductions when installed as a system on vehicles. The menu includes credits for improved system components and air recirculation settings designed to reduce the AC load on the IC engine. The AC efficiency credits are capped at 5.0 g/mile for passenger cars and 7.2 g/mile for light trucks. In addition, a limited amount of vehicle tailpipe testing ( i.e., the “AC17” test) is required for manufacturers claiming credits to verify anticipated emissions reductions are occurring. The credits have been effective in incentivizing AC efficiency improvements since the program's inception, and manufacturers' use of AC menu credits has steadily increased over time. In MY 2021, 17 of 20 manufacturers reported efficiency credits resulting in an average credit of 5.7 g/mile.

EPA is proposing to retain AC efficiency credits but, starting with MY 2027, limit eligibility to only vehicles equipped with IC engines. Thus, BEVs would no longer be eligible for these credits after MY 2026. The AC efficiency credits are based on emissions reductions from ICE vehicles. Currently, BEVs are generating credits even though the credits are based solely on improvements to ICE vehicles, and not representative of emissions reductions for BEVs. When EPA adopted this construct in the MY 2012 rule, BEV sales were relatively small, and the 0 g/mile accounting was temporary with upstream net emissions accounting part of the final standards. However, as discussed in Section III.B.7, EPA is proposing to continue the 0 g/mile treatment of PEV electric operation (by removing the MY 2027 date currently specified in the regulations for including upstream emissions in compliance calculations for BEVs). Another BEV related issue is that BEVs have generated g/mile AC credits even though they have been counted as 0 g/mile in the fleet average calculations. This accounting has contributed to manufacturers reporting BEV emissions as less than zero, which is not representative of actual vehicle emissions and can be a source of confusion. For example, in the latest Trends report, Tesla, which sells only BEVs, reported a fleet average performance value of negative 126 g/mile including 18.8 g/mile of AC credits. Initially, when BEV sales were very low, these issues and their impacts were small, and the AC efficiency credits in turn provided some amount of incentive for more efficient BEVs overall and resulting upstream emission reductions. However, EPA has reconsidered the appropriateness of applying AC efficiency credits to BEVs in light of the increasing level of BEVs anticipated in future model years and the proposal to indefinitely exclude upstream emissions from BEV compliance calculations. For all these reasons, EPA believes limiting eligibility for AC efficiency credits to only ICE vehicles in the longer term is appropriate. EPA notes that the stringency of the proposed standards have been adjusted to reflect the inclusion of AC credits only for ICE equipped vehicles, as discussed in Section III.B.2.

In the 2012 rule, as a condition for claiming credits, EPA required manufacturers to conduct a limited number of emissions tests to help confirm that projected emissions reductions based on the menu are occurring with actual vehicles. The test procedure used for testing is the “AC17” test and consists of the SC03 driving cycle (part of fuel economy label 5-cycle testing, where vehicles are tested under high temperature conditions), the fuel economy highway cycle, a preconditioning cycle, and a solar peak period (4-hour duration). The AC17 test is mandatory for MYs 2017 and later (with the exception that manufacturers are not required to test BEVs). Testing is at a limited “AC grouping” level, rather than the every model type level required for the CO₂ footprint standards. In MYs 2017–2019, AC17 test data was required to be reported to EPA but was not used to determine the credit levels for vehicles. Starting in MY 2020, the AC17 test results factor into “qualifying/adjusting” the level of credits through an A to B comparison with a baseline system. In cases where the test results do not support full menu credits, proportional credits may be generated based on the test results. Testing is limited in any given model year to no more than one vehicle from each vehicle platform that generates credits. Manufacturers with vehicles in a platform that are generating credits must choose a different vehicle model each year, starting with the highest sales volume vehicle, then the next highest the following year and so on until all models are tested or the platform undergoes a major redesign. EPA is not proposing to change the AC17 testing provisions from their current form for manufacturers claiming AC efficiency credits.

EPA notes that its proposed approaches for AC efficiency credits and off-cycle credits, discussed in detail in Section III.B.6, differ even though the types of emissions the credits are designed to address ( i.e., emissions not considered on the 2-cycle compliance test cycles) are similar. As discussed in Section III.B.6, while EPA is proposing to phase out the off-cycle credits entirely after MY 2030, EPA is not proposing to phase out AC efficiency credits for ICE vehicles or reopening them because the AC efficiency credits program is more robust as it includes a check of vehicle emissions performance through AC17 testing. EPA established the AC17 testing requirements as part of the 2012 rule to provide an assurance that the AC systems earning credits were providing anticipated emissions reductions. The off-cycle credits program includes no such mechanism to check performance. EPA is not reopening or proposing any changes to the existing AC17 testing provisions as part of this rule; therefore, the AC17 testing requirements of manufacturers earning AC efficiency credits would remain in effect under the MY 2027 and later program.

EPA's MDV work factor-based program does not include AC system efficiency provisions and EPA is not reopening or considering new provisions for MDVs in this proposed rule.

iii. Proposed Removal of AC Credits for Reduced Refrigerant Leakage

The current light-duty vehicle AC credits program in 40 CFR 86.1867–12 that was adopted in the 2012 rule also includes credits for low refrigerant leakage systems and/or the use of alternative low global warming potential (GWP) refrigerants rather than hydrofluorocarbons (HFCs). The potential available AC leakage credits are larger than the AC efficiency credits. The program caps refrigerant related credits for passenger cars and light trucks, respectively, at 13.8 and 17.2 g/mile when an alternative refrigerant is used and 6.3 and 7.8 g/mile in cases where an alternative refrigerant is not used. Although the credits program has been voluntary since its inception, it has been effective in helping to incentivize the use of low GWP refrigerants. Since EPA established the voluntary refrigerant-based credits, low GWP refrigerant HFO–1234yf has been successfully used by many manufacturers to claim the full refrigerant replacement credits. As of MY 2021, 95 percent of new vehicles used the low GWP refrigerant. EPA adopted a somewhat different approach for MDVs by including in the program a refrigerant leakage standard rather than a voluntary credit.

In December 2020, the American Innovation and Manufacturing (AIM) Act (42 U.S.C. 7675) was enacted. The AIM Act, among other things, authorizes EPA to phase down production and consumption of HFCs in specific sectors and subsectors, including their use in vehicle AC systems. The AIM Act has sent a strong signal to all vehicle manufacturers that there is no future for using high GWP refrigerants in new vehicles. In December 2022, in response to the AIM Act, EPA proposed to restrict the use of high GWP refrigerants such as HFCs in vehicle applications. The new restriction on refrigerant use, if finalized as proposed, would be effective in MY 2025 for light-duty vehicles and MY 2026 for MDVs, well ahead of the start of the new CO₂ vehicle standards EPA is proposing. Auto manufacturers have already successfully developed and employed HFO–1234–yf low GWP refrigerants across the large majority of the fleet and there is no reason at this time to believe that manufacturers would redesign those systems again under the AIM Act, in the absence of EPA vehicle-based credits, to develop and use systems equipped with a higher GWP refrigerant. In light of the proposed high GWP phase out and the fact that EPA has been directed by the AIM Act to do so, EPA believes sunsetting the voluntary refrigerant-related credits in MY 2027 in its vehicles GHG program is appropriate and reasonable. This would avoid duplicative programs established under two different statutes, simplify EPA's vehicles program, and reduce manufacturer reporting burden associated with claiming the voluntary credits. For all these reasons, EPA is also ending the MDV refrigerant leakage standard in MY 2027. EPA requests comment on its AC refrigerant-related proposals. While EPA does not believe continuing the light-duty and medium-duty vehicle refrigerants provisions in this program is necessary, EPA requests comments on whether there is any value in retaining its current provisions. EPA notes that for light-duty vehicles the footprint-based standards would need to be adjusted to be made more stringent to account for the availability and use of refrigerant credits if they are retained, consistent with previous light-duty vehicle GHG rules.

6. Off-Cycle Credits Program

i. Background on the Off-Cycle Credits Provisions

Starting with MY 2008, EPA started employing a “five-cycle” test methodology to measure fuel economy for purposes of new car window stickers (labels) to give consumers better information on the fuel economy they could more reasonably expect under real-world driving conditions. However, for GHG compliance, EPA continues to use the established “two-cycle” (city and highway test cycles, also known as the FTP and HFET) test methodology. As learned through development of the “five-cycle” methodology and prior rulemakings, there are technologies that provide real-world GHG emissions improvements, but whose improvements are not fully reflected on the “two-cycle” test. EPA established the off-cycle credit program in 40 CFR 86.1869–12 to provide an appropriate level of CO₂ credit for technologies that achieve CO₂ reductions but may not otherwise be chosen as a GHG control strategy, as their GHG benefits are not measured on the specified 2-cycle test. For example: High efficiency lighting is not measured on EPA's 2-cycle tests because lighting is not turned on as part of the test procedure, but it reduces CO₂ emissions by decreasing the electrical load on the alternator and engine. Both light-duty and medium-duty vehicles may generate off-cycle credits, but the program is much more limited in the medium-duty work factor-based program.

Under EPA's existing regulations, there are three pathways by which a manufacturer may accrue light-duty vehicle off-cycle technology credits. The first pathway is a predetermined list or “menu” of credit values for specific off-cycle technologies that was effective starting in MY 2014. This pathway allows manufacturers to use credit values established by EPA for a wide range of off-cycle technologies, with minimal or no data submittal or testing requirements. The menu includes a fleetwide cap on credits to address the uncertainty of a one-size-fits-all credit level for all vehicles and the limitations of the data and analysis used as the basis of the menu credits. The menu cap is 10 g/mile except for a temporary increased cap of 15 g/mile available only for MYs 2023–2026, adopted by EPA in the 2021 rule. The existing menu technologies and associated credits are summarized in Table 34 and Table 35.

A second pathway allows manufacturers of light-duty vehicles to use 5-cycle testing to demonstrate and justify off-cycle CO₂ credits. The additional emissions tests allow emission benefits to be demonstrated over some elements of real-world driving not captured by the GHG compliance tests, including high speeds, rapid accelerations, and cold temperatures. Under this pathway, manufacturers submit test data to EPA, and EPA determines whether there is sufficient technical basis to approve the off-cycle credits. The third pathway allows manufacturers to seek EPA approval, through a notice and comment process, to use an alternative methodology other than the menu or 5-cycle methodology for determining the off-cycle technology CO₂ credits. This option is only available if the benefit of the technology cannot be adequately demonstrated using the 5-cycle methodology. For MDVs, the manufacturers may use the public process or 5-cycle pathways for generating credits. There is no off-cycle credits menu for MDVs.

EPA designed the off-cycle program to provide an incentive for new and innovative technologies that reduce real world CO₂ emissions primarily outside of the 2-cycle test procedures ( i.e., off-cycle) such that most of the emissions reductions are not reflected or “captured” during certification testing. The program also provides flexibility to manufacturers since off-cycle credits may be used to meet their emissions reduction obligations. In past rules, EPA has not adjusted the standards levels to reflect the availability of off-cycle credits like we did in the case of AC credits. However, in the 2021 rule, we did include use of off-cycle credits by manufacturers in our cost analysis. Specifically, we assumed in our modeling for the 2021 rule that 10 g/mile of off-cycle credits would be used at an incremental cost of $42/grams/mile. The menu credit levels are based on estimated CO₂ reductions from ICE vehicles. However, the current program also allows BEVs to generate menu credits. Allowing vehicles with tailpipe values of 0 g/mile to generate off-cycle credits has resulted in emissions compliance values of less than 0 g/mile.

Since MY 2012, the program has successfully encouraged the introduction and use of a variety of off-cycle technologies, especially menu technologies under the light-duty program. The use of several menu technologies has steadily increased over time, including engine stop-start, active aerodynamics, high efficiency alternators, high efficiency lighting, and thermal controls that reduce AC energy demand. The program has allowed manufacturers to reduce emissions by applying off-cycle technologies, at lower overall costs, compared to the technologies that would have otherwise been used to provide reductions over the 2-cycle test, consistent with the intent of the program. Since 2012, the quantity of off-cycle credits generated by manufacturers steadily increased over time. In 2021, the industry averaged 8.7 g/mile of credits with more than 95 percent of those credits based on the menu. Seven manufacturers (BMW, Ford, GM, Honda, Jaguar Land Rover, Stellantis, and VW) claimed the maximum menu credit available of 10 g/mile, while Honda claimed the highest level of off-cycle credits overall at 10.6 g/mile. Several manufacturers used at least some off-cycle technologies on 80–100 percent of vehicles.

The program has had mixed results for 5-cycle and public process pathways. There have been few 5-cycle credit demonstrations, and the public process pathway has been challenging due to the complexity of demonstrating real-world emissions reductions for technologies not listed on the menu. The public process pathway was used successfully by several manufacturers for high efficiency alternators, resulting in EPA adding them to the off-cycle menu beginning in MY 2021. The program has resulted in a number of concepts for potential off-cycle technologies over the years, but few have been implemented, at least partly due to the difficulty in demonstrating the quantifiable real-world emissions reductions associated with using the technology. Many credits sought by manufacturers have been relatively small (less than 1 g/mile). Manufacturers have commented several times that the process takes too long, but the length of time is often associated with the need for additional data and information or issues regarding whether a technology is eligible for credits.

ii. Proposed Phase Out of Off-Cycle Credits

EPA is proposing to sunset the off-cycle program for both light and medium-duty vehicles as follows: (1) EPA proposes to phase out menu-based credits in the light-duty vehicle program by reducing the menu credit cap year-over-year until it is fully phased out in MY 2031. Specifically, EPA is proposing a declining menu cap starting with the 10 g/mile cap currently in place for MY 2027 and then phasing down to 8.0/6.0/3.0/0.0 g/mile over MYs 2028–2031 such that MY 2030 would be the last year manufacturers could generate credits; (2) EPA proposes to eliminate the 5-cycle and public process pathways starting in MY 2027; and (3) EPA proposes to limit eligibility for off-cycle credits to vehicles with tailpipe emissions greater than zero ( i.e., vehicles equipped with IC engines) starting in MY 2027. There are several factors that have led EPA to propose phasing out the off-cycle credits program in this manner, as discussed in this section.

EPA believes phasing out the off-cycle program is generally consistent with EPA's proposed standards and the direction the industry is headed in changing their vehicle mix away from ICE technologies toward vehicle electrification technologies. EPA originally created the off-cycle program both to provide flexibility to manufacturers and to encourage the development of new and innovative technologies that might not otherwise be used because their benefits were not captured on the 2-cycle test. EPA believes the off-cycle credits program has successfully served these purposes. However, the credits were based on estimated emissions improvements for ICE vehicle which at the time accounted for the vast majority of vehicles produced. Now with the industry focusing most RD resources on vehicle electrification technology development and increasing production, as discussed in Section I.A.2,^{456 457} off-cycle credits are not likely to be a key area of focus for manufacturers. In addition, EPA believes that it is not likely that manufacturers would invest resources on off-cycle technology in the future for their ICE vehicle fleet that is likely to become a smaller part of their overall vehicle mix over the next several years. For example, in MY 2021, credits per technology generated under the public process pathway were all well below 1 g/mile and there is little reason to expect the program to drive significant new innovation in the future. The public process pathway has been in place since the 2010 rule and manufacturers have had ample opportunity to consider potential off-cycle technologies. Also, manufacturers would be recouping any investment in off-cycle technologies, with relatively small emission reductions, over a decreasing number of vehicles as ICE vehicle production declines.

In addition, the off-cycle credits were initially small relative to the average fleet emissions and standards. For example, in the 2012 rule, EPA established menu credits of up to 10 g/mile, a relatively small value compared to a projected fleet-wide average compliance value of about 243 g/mile in MY 2016 phasing down to 163 g/mile in MY 2025. Across the MY 2016–2025 program, therefore, EPA projected menu credits would be about 4 percent to 6 percent of the standard. Now, EPA is proposing standards that would reduce fleet average emissions to about 82 g/mile and therefore off-cycle credits would become an outsized portion ( e.g., up to 12 percent) of the program if they were retained in their current form. One concern is that there is not currently a mechanism to check that off-cycle technologies provide emissions reductions in use commensurate with the level of the credits the menu provides. This is becoming more of a concern as vehicles become less polluting overall. The menu credits are based on MY 2008 vintage engine and vehicle baseline technologies (assessed during the 2012 rule) and therefore the credit levels are potentially becoming less representative of the emissions reductions provided by the off-cycle technologies as vehicle emissions are reduced. Some stakeholders have also become increasingly concerned that the emissions reductions reflected in the off-cycle credits may not be being achieved. Also, details such as the synergistic effects and overlap among off-cycle technologies take on more importance as the credits represent a larger portion of the emissions reductions. During the rulemaking to revise the MY 2023–2026 standards, EPA received comments that due to the potential for loss of GHG emissions reductions, the off-cycle program should be further constrained, or discontinued, or that a significantly more robust mechanism be implemented for verifying purported emissions reductions of off-cycle technologies. The potential for a loss of GHG emissions reductions could become further exacerbated as the standards become more stringent.

Initially, EPA addressed the uncertainty surrounding the precise emissions reductions from equipping vehicle models with off-cycle technologies by making the initial credit values conservative, but the values may no longer be conservative, and may even provide more credits than appropriate for later MY vehicles. Because off-cycle credits effectively displace two-cycle emissions reductions, EPA has long strived to ensure that off-cycle credits are based on real-world reductions and do not result in a loss of emissions reductions overall. EPA received comments in past rules that it should revise the program to better ensure real-world emissions reductions. However, EPA has learned through its experience with the program to date that such demonstrations can be exceedingly challenging. At this time, EPA has not identified a single robust methodology that can provide sufficient assurance across potential off-cycle technologies due to the wide variety of off-cycle real world conditions over which a potential technology may reduce emissions. EPA does not have a proposed methodology that would provide such assurance across a range of technologies. Finally, while the off-cycle program provides an incentive for off-cycle emissions reduction technologies, it does not include full accounting of off-cycle emissions. Vehicle equipment such as remote start and even roof racks added at the dealership may well increase off-cycle emissions. For all of these reasons, EPA believes the role of off-cycle credits should be de-emphasized in the future and in the longer term the credits should be phased out.

EPA is proposing to phase out menu credits over the MY 2028–2031 timeframe as a reasonable way to bring the program to an end. The cap would be reduced as shown in Table 36. EPA is proposing to end the program through a phase-out rather than simply ending the program entirely in MY 2027 to provide a transition period to help manufacturers who have made substantial use of the program in their product planning. Currently, the cap is applied to individual manufacturers by dividing the credits generated by a manufacturer's entire vehicle production to determine an average credit level for the model year. EPA proposes that starting in MY 2027, the denominator would include only eligible vehicles ( i.e., vehicles equipped with an IC engine) rather than all vehicles produced by the manufacturer. EPA requests comment on its approach for phasing out the off-cycle program, including the number of years over which the menu phase out would occur as well as the proposed menu credit caps in those years.

Also, as discussed in detail in Section III.B.8, EPA is proposing to revise the utility factor for PHEVs. While PHEVs would remain eligible for off-cycle credits under EPA's proposed eligibility criteria, EPA proposes, as a reasonable approach for addressing off-cycle credits for PHEVs, to scale the menu credit cap for PHEVs by the vehicle's assigned utility factor. For example, if a PHEV has a utility factor of 0.3, meaning the vehicle is estimated to operate as an ICE vehicle 70 percent of the vehicle's VMT, the PHEV would be eligible for 70 percent of the cap value. For example, if the cap is 10.0 g/mile in MY 2027, PHEVs would be eligible for off-cycle credits up to 7.0 g/mile. Therefore, manufacturers producing PHEVs would not be eligible for the full menu credit cap value shown in Table 36. EPA proposes that the menu credit cap for each manufacturer's eligible vehicles would be the production-weighted average of ICE vehicles counting at the full cap amount and PHEVs at their maximum credit allowance. EPA proposes that manufacturers would apply the utility factor to the total off-cycle credits generated by the PHEVs to properly account for the value of the off-cycle credit corresponding to expected engine operation. As is the case in the current program, individual vehicles could generate more credits than the fleetwide cap value but the fleet average credits per vehicle must remain at or below the applicable menu cap. EPA requests comments on this as well as other potential ways of addressing off-cycle credits for PHEVs.

There are two pathways for generating credits in addition to the menu. In cases where additional laboratory testing can demonstrate emission benefits, the “5-cycle” pathway allows manufacturers to use a broader array of emission tests (known as 5-cycle testing because the methodology uses five different testing procedures) to demonstrate and justify off-cycle CO₂ credits. The additional emission tests allow emission benefits to be demonstrated over elements of real-world driving not captured by the GHG compliance tests, including high speeds, rapid accelerations, interior air conditioning and heater usage and cold temperature operation. The third pathway for off-cycle technology performance credits allows manufacturers to seek EPA approval to use an alternative methodology for determining off-cycle technology CO₂ credits. This option is only available if the benefit of the technology cannot be adequately demonstrated using the 5-cycle methodology. The regulations require that EPA seek public comment on and publish each manufacturer's application for credits sought using this pathway. After reviewing the petitions submitted by manufacturers and the comments, EPA drafts and publishes decision documents that explain the impacts and applicability of the unique alternative method technologies via the Federal Register . The public process pathway is also available for MD vehicles.

Regarding the 5-cycle pathway, these credits have a more rigorous basis compared to credits generated under the other pathways because they are based on vehicle testing. However, the 5-cycle pathway has been used infrequently. In MY 2021, there were no credits generated using the 5-cycle pathway and historically only one manufacturer has used the pathway since MY 2012. MDV manufacturers also are not using the 5-cycle pathway. Given that the 5-cycle pathway is not being actively used and we are not aware of any OEM plans to make significant use of the 5-cycle pathway in the future, EPA believes phasing it out for both light-duty and medium-duty vehicles in MY 2027 is reasonable. EPA requests comment on this approach for 5-cycle based credits.

Since MY 2012, manufacturers have used the public process pathway more extensively than the 5-cycle pathway. In fact, several manufacturers successfully applied for high efficiency alternator credits through the public process which led EPA to add the technology to the menu as part of the 2020 rule. However, as of MY 2021, the public process pathway is resulting in relatively few credits. While there were nine manufacturers generating credits, the average per vehicle credit across all manufacturers was 0.2 g/mile. Manufacturers claiming credits averaged between 0.0–0.7 g/mile per vehicle. Thus, more than 95 percent of off-cycle credits in MY 2021 were based on the menu. For MDVs, manufacturers are not generating any credits under the public process pathway. In addition, there are significant resources involved both for the manufacturer in developing a methodology and submitting it to EPA and for EPA in evaluating the applications, including soliciting public comments. Given that the pathway is little used, is resulting in few credits, and can be resource-intensive for both manufacturers and EPA, EPA is proposing to eliminate this pathway in MY 2027 as well. EPA would eliminate the pathway for both LD and MDVs. EPA requests comment on its proposal to end the public process pathway in MY 2027.

Regarding EPA's proposal to limit off-cycle credit eligibility to vehicles equipped with ICE engine, the menu credits levels were based on potential emissions reductions from ICE vehicles and are not representative of emissions reductions for BEVs, especially in a program based solely on tailpipe emissions. Especially now that EPA is proposing to make the 0 g/mile treatment of BEV operation a permanent part of the program (see Section III.B.7), with no accounting for upstream emissions, EPA believes it is most appropriate to limit eligibility for off-cycle credits to vehicle with tailpipe emissions, discontinuing off-cycle credits for BEVs. While off-cycle technologies may provide some overall efficiency improvement for BEVs (with some potential upstream emissions benefit), off-cycle technologies do not impact BEV tailpipe emissions, since BEVs have no tailpipe emissions and therefore are not relevant for this program. This issue will only become more pronounced as the implementation of BEV technologies in the fleet increases. Therefore, EPA is proposing to end off-cycle credits for vehicles with no IC engine beginning in MY 2027.

EPA is proposing substantial revisions to the off-cycle credits program, including restricting eligibility and eliminating credit pathways starting in MY 2027 and phasing out the program entirely starting with MY 2031. EPA requests comment on these proposals. Commenters advocating for continuing the off-cycle program in some form are encouraged to consider EPA's concerns as described in this section and to provide data to the extent possible to support their comments. For example, to the extent commenters support keeping the off-cycle menu in some form, EPA would be especially interested in comments supported with data on how the level of the credits should be adjusted to better reflect emission reductions for future ICE vehicles.

7. Treatment of PEVs and FCEVs in the Fleet Average

In the 2012 rule, for MYs 2022–2025, EPA allowed manufacturers to use a 0 g/mi compliance value ( i.e., a value reflecting tailpipe emissions only) for the electric-only portion of operation of BEVs/PHEVs/FCEVs up to a per-company cumulative production cap. As originally envisioned in the 2012 rule, starting with MY 2022, the compliance value for BEVs, FCEVs, and the electric portion of PHEVs in excess of individual automaker cumulative production caps would be based on net upstream emissions accounting ( i.e., EPA would attribute a pro rata share of national CO₂ emissions from electricity generation to each mile driven under electric power minus a pro rata share of upstream emissions associated with from gasoline production). The 2012 rule would have required net upstream emissions accounting for all MY 2022 and later electrified vehicles. However, in the 2020 rule, prior to upstream accounting taking effect, EPA revised its regulations to extend the use of 0 g/mile compliance value through MY 2026 with no production cap, effectively continuing the practice of basing compliance only on tailpipe emissions for all vehicle and fuel types.

EPA is proposing to make the current treatment of PEVs and FCEVs through MY 2026 permanent. EPA proposes to include only emissions measured directly from the vehicle in the vehicle GHG program for MYs 2027 and later (or until EPA changes the regulations through future rulemaking) consistent with the treatment of all other vehicles. Electric vehicle operation would therefore continue to be counted as 0 g/mile, based on tailpipe emissions only. Vehicles with no IC engine ( i.e., BEVs and FCEVs) would be counted as 0 g/mile in compliance calculations, while PHEVs would apply the 0 g/mile factor to electric-only vehicle operation (see also Section III.B.8 for EPA's proposed treatment of PHEVs). The program has now been in place for a decade, since MY 2012, with no upstream accounting and has functioned as intended, encouraging the continued development and introduction of electric vehicle technology. These emissions reduction technologies are now coming into the mainstream and can serve as the primary technologies upon which EPA can base more stringent standards. As a separate and independent reason for making the current treatment permanent, EPA originally proposed using upstream emissions in PEV compliance calculations at a time when there was little if any regulation of stationary sources for GHGs, and noted at the time this was a departure from its usual practice of relying on stationary source programs to address pollution risks from stationary sources. In the 2020 rule, EPA extended 0 g/mi in part because power sector emissions were declining and the trend was projected to continue and stated “EPA agrees that, at this time, manufacturers should not account for upstream utility emissions.” As noted elsewhere, power sector emissions are expected to decline further in the future. EPA continues to believe that it is appropriate for any vehicle which has zero tailpipe emissions to use 0 g/mi as its compliance value. This approach of looking only at tailpipe emissions and letting stationary source GHG emissions be addressed by separate stationary source programs is consistent with how every other light duty vehicle calculates its compliance value. If EPA deviated from this tailpipe emissions approach by including upstream accounting, it would appear appropriate to do so for all vehicles, including gasoline-fueled vehicles. EPA notes that while upstream emissions are not included in vehicle compliance determinations, which are based on direct vehicle emissions, upstream emissions impacts from fuel production at refineries and electricity generating units are considered in EPA's analysis of overall estimated emissions impacts and projected benefits.

EPA requests comments on its proposed treatment of electrified vehicles in manufacturer compliance calculations.

8. Proposed Approach for the PHEV Utility Factor

EPA is proposing to revise the light-duty vehicle PHEV Fleet Utility Factor curve used in CO₂ compliance calculation for PHEVs, beginning in MY 2027. The agency believes the current light-duty vehicle PHEV compliance methodology significantly underestimates PHEV CO₂ emissions. The mechanism that is used to apportion the benefit of a PHEV's electric operation for purposes of determining the PHEV's contribution towards the fleet average GHG requirements is the fleet utility factor (FUF). We have analyzed available data and compiled literature showing that the current utility factors are overestimating the operation of PHEVs on electricity, and therefore would underestimate the CO₂ g/mi compliance result. The current and proposed FUFs are shown in Figure 12.

The current FUFs were developed in SAE 2841 and are used to estimate the percentage of operation that is expected to be in charge depleting mode (vehicle operation that occurs while the battery charge is being depleted, sometimes referred to as electric range). The measurement of the charge depleting (CD) range is performed over the EPA city and highway test cycles, also called the 2-cycle tests. The tested cycle-specific charge depleting range is used as an input to the FUF curves (or lookup tables, as shown in Tables 1 and 2 in 40 CFR 600.116–12) to determine the specific city and highway FUFs. The resulting FUFs are used to calculate a composite CO₂ value for the city and highway CO₂ results, by weighting the charge depleting CO₂ by the FUF and weighting the charge sustaining (CS) CO₂ by one minus the FUF.

The FUFs developed in SAE J2841 rely on a few important assumptions and underlying data: (1) Trip data from the 2001 National Household Travel Survey, used to establish daily driving distance assumptions, and (2) the assumption that the vehicle is fully charged before each day's operation. These assumptions are important because they affect the shape of the utility factor curves, and therefore affect the weighting of CD (primarily electric operation) CO₂ and CS (primarily internal combustion engine operation) CO₂ in the compliance value calculation. SAE J2841 was developed more than ten years ago during the early introduction of light-duty PHEVs and at the time was a reasonable approach for weighting the CD and CS vehicle performance for a vehicle manufacturer's compliance calculation given the available information. The PHEV market has since grown and there is significantly more real-world data available to EPA on which to design an appropriate compliance program for PHEVs. The agency believes that the use of an FUF is still an appropriate and reasonable means of calculating the contribution of PHEVs to GHG emissions and compliance, but the real-world data available today clearly no longer supports the FUF established in SAE J2841 more than a decade ago.

Because the tailpipe CO₂ produced from PHEVs varies significantly between CD and CS operation, both the charge depleting range and the utility factor curves play an important role in determining the magnitude of CO₂ that is calculated for compliance. In charge depleting mode, EPA is proposing to maintain a zero gram per mile contribution when the internal combustion engine is not running. The significant difference is between, potentially, zero grams per mile in CD mode versus CO₂ grams per mile that are likely to be similar to a hybrid (non-plug-in) vehicle in CS mode. Charge depleting range for a PHEV is determined by performing single cycle city and highway charge depleting tests according to SAE Standard J1711, Recommended Practice for Measuring the Exhaust Emissions and Fuel Economy of Hybrid-Electric Vehicles, Including Plug-In Hybrid Vehicles. The charge depleting range is determined by arithmetically averaging the city and highway range values weighted 55 percent/45 percent, respectively as noted in 40 CFR 600.311–12(j)(4)(i).

i. FUF Comparisons With Real World Data

Recent literature and data have identified that the current utility factor curves may overestimate the fraction of driving that occurs in charge depleting operation. This literature also concludes that vehicles with lower charge depleting ranges have even greater discrepancy in CO₂ emissions.

EPA and ICCT have also evaluated recently available OBD data that has been collected through the California Bureau of Automotive Repair (BAR) and found that the data shows that, on average, there is more charge sustaining operation and more gasoline operation than is predicted by the current fleet utility factor curves. The BAR OBD data enable the evaluation of real-world PHEV distances travelled in various operational modes; these include charge-depleting engine-off distance, charge-sustaining engine-on distance, total distance traveled, odometer readings, total fuel consumed, and total grid energy inputs and outputs of the battery pack. These fields of data allow us to use the BAR OBD data to filter the data and calculate 5-cycle comparable real-world driving ratios of charge depleting distance to total distance and to then compare to the existing FUFs, using the 5-cycle range from the fuel economy and environment label.

In addition to the BAR OBD data, ICCT also evaluated a dataset from Fuelly.com. Fuelly.com is a website and smartphone application that allows users to self-report fuel consumption data. The curve that is fitted from the Fuelly.com data also yields lower utility factors than the SAE J2841 FUF curve, for the same charge depleting distance; however, the Fuelly curve is not as low as the BAR OBD curve.

A comparison of the results of EPA's data analysis as well as the ICCT analyses is shown in Figure 13. The FUF applied in the current regulations is labeled as “SAE J2841 FUF”. EPA's data analysis of the BAR OBD data is labeled as “Linear Regression Fit” and the two ICCT curves are labeled as “ICCT–BAR” and “ICCT–FUELLY”. ICCT created the ICCT–BAR and ICCT–Fuelly curves by adjusting the normalized distances in the UF equation for both the BAR OBD data and the Fuelly user-reported data, using sample-size weighted nonlinear least squares regression. As shown in Figure 13, the EPA “Linear Regression Fit”, where about 78 percent of the total data points are between 12- to 32-miles for the CD range, lies on top of the “ICCT–BAR” curve.

The BAR OBD data is a recent and relatively large dataset that includes the charge depleting distance (or electric operating distance) and total distance, which makes it a reasonable source for evaluating the real-world utility factors for recent PHEV usage. However, we recognize that the curve developed from this data is a departure from the SAE J2841 FUF curves, that the BAR OBD data has some limitations (see DRIA Chapter 3), and that the original SAE J2841 FUF methodology was also a reasonable approach at the time it was adopted. Therefore, we created the proposed curve by averaging the SAE J2841 FUF curve and the ICCT–BAR curve. The resulting proposed FUF curve lies almost on top of the ICCT–FUELLY curve. Some of the data suggest that a lower curve might more appropriately reflect current real-world usage, however, EPA recognizes that PHEV technology has the potential to provide significant GHG reductions and an overly low FUF curve could disincentivize manufacturers to apply this technology. In addition, anticipated longer all-electric range and greater all-electric performance, partially driven by CARB's ACC II program, as well as increased consumer technology familiarity and available infrastructure should result in performance more closely matching our proposed curve. EPA will continue to monitor real-world data as it becomes available.

We believe that it is important for PHEV compliance utility factors to accurately reflect the apportionment of charge depleting operation, for weighting the 2-cycle CO₂ test results; therefore, we are proposing to update the city and highway fleet utility factor curves with a new, single curve that is shown in Figure 12. We are proposing a single curve to better reflect real world performance where the underlying real-world data is not parsed into city and highway data. Since the fleet average calculations are based on a combined city and highway CO₂ value, a single FUF curve can be used for these calculations. EPA is requesting comment on whether the ICCT–BAR curve shown in Figure 13 is a more appropriate fleet utility factor curve instead of the FUF proposed curve, as shown in the same figure.

EPA has chosen the proposed FUF curve based on the best data available. Commentors may have other data sets from PHEV vehicles; EPA would welcome additional data on real-world PHEV operation, which we would consider and may use to update the utility factor in a future rulemaking. The type of data that would be most useful would have measured mileage in charge depleting range and measured total mileage for a large number of PHEV vehicles that are nationally representative and cover a broad range of PHEV models.

ii. Impact on Compliance

The proposed revisions to the PHEV FUF curve will increase CO₂ compliance values for PHEVs because the charge depleting test values will be weighted less heavily than they are currently in compliance calculations. Based on EPA's review of real-world utility factor data it appears the assumptions in SAE J2841 tend to overestimate the charge depleting operation of PHEVs. As such, the Agency is proposing to use the FUF determined from real world data. This change will result in a reduction to the FUF used to determine PHEV CO₂ compliance values. PHEVs that are designed with a large charge depleting range would still have a significantly lower compliance value than their hybrid counterparts would have.

iii. Consideration of CARB ACC II PHEV Provisions

CARB recently set minimum performance requirements for PHEVs in their ACC II program. These requirements include performance over the US06 test cycle and a minimum range and are meant to set qualifications for PHEV's to be included in a manufacturer's ZEV compliance. EPA is not proposing to adopt the range and US06 performance requirements or fleet penetration limits that are included in the CARB ACC II ZEV provisions. EPA agrees that the performance provisions required by CARB in ACC II are important real-world performance attributes and have the ability to provide greater environmental benefits as compared to PHEVs that are less capable. However, unlike the ACC II program, the GHG program in this proposal is performance-based and not a ZEV mandate. In that regard, EPA believes that it is appropriate to have a robust GHG compliance program for PHEVs that properly accounts for their GHG emissions independent of a PHEV's range or capability over the US06 test cycle.

9. Small Volume Manufacturer GHG Standards

i. Background

EPA's light-duty vehicle greenhouse gas (GHG) program for model years (MYs) 2012–2016 provided a conditional exemption for small volume manufacturers (SVMs) with annual U.S. sales of less than 5,000 vehicles due to unique feasibility issues faced by these SVMs. The exemption was conditioned on the manufacturer making a good faith effort to obtain credits from larger volume manufacturers. For the MY 2017–2025 light-duty vehicle GHG program ( i.e., the 2012 rule), EPA adopted specific regulations allowing SVMs to petition EPA for alternative standards, again recognizing that the primary program standards may not be feasible for SVMs and could drive these manufacturers from the U.S. market.

EPA acknowledged in the 2012 final rule that SVMs may face a greater challenge in meeting CO₂ standards compared to large manufacturers because they only produce a few vehicle models, mostly focused on high performance sports cars and luxury vehicles. SVMs have limited product lines across which to average emissions, and the few vehicles they produce often have very high vehicle CO₂ g/mile levels. EPA also noted that the total U.S. annual vehicle sales of SVMs are much less than 1 percent of total sales of all manufacturers and contribute minimally to total vehicular GHG emissions, and foregone GHG reductions from SVMs likewise are a small percentage of total industry-wide reductions. EPA adopted a regulatory pathway for SVMs to apply for alternative GHG emissions standards for MYs 2017 and later, based on information provided by each SVM on factors such as technical feasibility, cost, and lead time.

The regulations established in the 2012 rule outline eligibility criteria and a framework for establishing SVM alternative standards. Manufacturer average annual U.S. sales must remain below 5,000 vehicles to be eligible for SVM alternative standards. The regulations specify the requirements for supporting technical data and information that a manufacturer must submit to EPA as part of its application. SVMs may apply for alternative standards for up to five model years at a time. SVMs may use the averaging, banking, and trading provisions to meet the alternative standards, but may not trade credits to another manufacturer.

EPA received applications for SVM alternative standards for MYs 2017–2021 from four manufacturers: Aston Martin, Ferrari, Lotus and McLaren. The regulations require SVMs to submit information, including cost information, to EPA as part of their applications. Each SVM provided its technical basis for the requested standards including a discussion of technologies that could and could not be feasibly applied to their vehicles in the time frame of the standards. In 2019, EPA issued proposed determinations of SVM alternative standards, including background information and EPA's assessment of the proposed standards, and requested public comment. In 2020, EPA finalized the SVM alternative standard determinations as proposed, shown in Table 37.

ii. Proposed SVM Standards for MY 2022 and Later

EPA established the SVM alternative standards option in the 2012 rule when ICE technologies were the primary CO₂ control technologies and vehicle electrification technologies were in their relative infancy. The landscape has fundamentally changed with electrification technologies maturing to become significant control technologies in this proposal. Vehicle electrification technologies are currently being implemented across many vehicle types including both luxury and high-performance vehicles by larger manufacturers and EPA expects this trend to continue. EPA believes that meeting the CO₂ standards is becoming less a feasibility issue and more a lead time issue for SVMs. Also, the credit trading market has become more robust since we initially established the SVM unique standards provisions. Now that it has, we would expect SVMs to be able to seek credit purchases as a compliance strategy. As electrification technologies become more widespread and commonly used, EPA believes there is no reason SVMs cannot adopt similar technological approaches with enough lead time (or purchase credits from other OEMs).

Given this changed landscape for SVMs, EPA believes it is appropriate to transition away from unique SVM standards and bring SVMs into the primary program. As a reasonable way to transition SVMs into the primary program, EPA is proposing to phase in primary standards gradually over MYs 2025–2032 resulting in SVMs being “caught up” to the proposed primary program standards by MY 2032. Specifically, EPA proposes that SVM alternative standards established for MY 2021 would apply through MY 2024 to provide stability for SVMs so that SVMs have an opportunity to reduce their GHG emissions in future years. EPA proposes that starting in MY 2025, SVMs would meet primary program standards albeit with additional lead-time. As shown in Table 38, EPA proposes that SVMs would meet the primary program standards for MY 2023 in MY 2025, providing two years of additional lead time. EPA is also proposing a period of stability rather than year-over-year incremental reductions in the standards levels for SVMs. SVMs have fewer vehicle models over which to average, and EPA believes a staggered phase down in standards with a period of stability between the steps is reasonable. As shown in Table 38, EPA proposes that the two-year offset would then continue with a period of stability between step changes in the standards until SVMs are required to meet the proposed MY 2032 standards in MY 2032. EPA is not reopening the eligibility requirements for the proposed SVM standards currently in the regulations for SVM alternative standards and SVMs would need to remain eligible to use these proposed provisions.

This additional lead time approach is similar to the approach EPA used in the 2012 rule to provide additional lead time to intermediate volume manufacturers. As with the intermediate volume manufacturer temporary lead time flexibility, EPA believes that the proposed additional lead time for SVMs will be sufficient to ease the transition to more stringent standards in the early years of the proposed program that could otherwise present a difficult hurdle for them to overcome. The proposed alternative phase-in would provide necessary lead time for SVMs to better plan and implement the incorporation of CO₂ reducing technologies and/or provide time needed to seek and secure credits from other manufacturers to bring them into compliance with the primary standards.

Importantly, SVMs would continue to remain eligible to use the ABT 5-year credit carry-forward provisions, allowing SVMs to bank credits in these intermediate years to further help smooth the transition from one step change in the standards to the next. EPA is, however, proposing to prohibit any SVM opting to use the additional lead time allowance from trading credits generated under the additional lead time standards to another manufacturer. These proposed credit provisions are also currently in place as part of the current SVM alternative standards. EPA believes that credit banking along with the staggered phase down of the standards would help SVMs meet the standards, recognizing that they have limited product lines. As with the SVM alternative standards, SVMs would have the option of following the additional lead time pathway with credit trading restrictions or opt into the primary program with no such restrictions. Once opted into the primary program, however, manufacturers would no longer be eligible for the alternative standards.

EPA requests comment on the proposal to apply the primary program standards, including the proposed standards, to SVMs with the specified additional lead time through MY 2032 EPA requests comment on whether the phase-in appropriately provides additional lead time for SVMs, including whether SVMs should be brought into the primary program sooner than proposed.

C. Proposed Criteria and Toxic Pollutant Emissions Standards for Model Years 2027–2032

EPA is proposing changes to criteria pollutant emissions standards for both light-duty vehicles and medium duty vehicles (MDV). Light-duty vehicles include LDV, LDT, and MDPV. NMOG+NO_X changes for light-duty vehicles include a fleet average that declines from 2027–2032 in the early compliance program (or steps down in 2030 for GVWR 6,000 pounds in the default program), the elimination of higher certification bins, a requirement for the same fleet average emissions standard to be met across four test cycles (25 °C FTP, HFET, US06, SC03), a change from fleet average NMHC standards to one fleet average NMOG+NO_X standard in the −7 °C FTP test, and three NMOG+NO_X provisions similar to requirements defined by the CARB Advanced Clean Cars II program. NMOG+NO_X changes for MDV include a fleet average that declines from 2027–2032 in the early compliance program (or steps down in 2030 in the default program), the elimination of higher certification bins, a requirement for the same fleet average emissions standard to be met across four test cycles (25 °C FTP, HFET, US06, SC03), and a new fleet average NMOG+NO_X standard in the −7 °C FTP. EPA is proposing a requirement for spark ignition and compression ignition MDV with GCWR above 22,000 pounds to comply with engine-dynamometer-based criteria pollutant emissions standards under the heavy-duty engine program instead of the chassis-dynamometer-based criteria pollutant emissions standards.

EPA is proposing to continue light-duty vehicle and MDV fleet average FTP NMOG+NO_X standards that include both ICE-based and zero emission vehicles in a manufacturer's compliance calculation. Performance-based standards that include both ICE and zero emission vehicles are consistent with the existing NMOG+NO_X program as well as the GHG program. EPA has considered the availability of battery electric vehicles as a compliance strategy in determining the appropriate fleet average standards. Given the cost-effectiveness of BEVs for compliance with both criteria pollutant and GHG standards, EPA anticipates that most (if not all) automakers will include BEVs in their compliance strategies. However, the standards continue to be a performance-based fleet average standard with multiple paths to compliance, depending on choices manufacturers make about deployment of a variety of emissions control technologies for ICE as well as electrification and credit trading.

EPA is proposing a PM standard of 0.5 mg/mi for light-duty vehicles and MDV that must be met across three test cycles (−7 °C FTP, 25 °C FTP, US06), a requirement for PM certification tests at the test group level, and a requirement that every in-use vehicle program (IUVP) test vehicle is tested for PM. The 0.5 mg/mi standard is a per-vehicle cap, not a fleet average.

EPA is proposing CO and formaldehyde (HCHO) emissions requirement changes for light-duty vehicles and MDVs including transitioning to emissions caps (as opposed to bin-specific standards) for all emissions standards, a requirement that CO emissions caps be met across four test cycles (25 °C FTP, HFET, US06, SC03), and a CO emissions cap for the −7 °C FTP that is the same for all light-duty vehicles and MDVs.

EPA is proposing a refueling standards change to require incomplete MDVs to have the same on-board refueling vapor recovery standards as complete MDVs. EPA is also proposing eliminating commanded enrichment as an AECD for power and component protection.

The proposal allows light-duty vehicle 25 °C FTP NMOG+NO_X credits and −7 °C FTP NMHC credits (converting to NMOG+NO_X credits) to be carried into the new program. It only allows MDV 25 °C FTP NMOG+NO_X credits to be carried into the new program if a manufacturer selects the early compliance pathway. New credits may be generated, banked and traded within the new program to provide manufacturers with flexibilities in developing compliance strategies.

1. Phase-in of Criteria Pollutant Standards

The proposed phase-in for criteria pollutant standards, including NMOG+NO_X, PM, CO, HCHO, CARB ACC II NMOG+NO_X provisions, and elimination of enrichment, is described in this section. Proposed refueling standards for incomplete vehicles begin with model year 2030 and are not part of the early phase-in scenario for the other pollutant standards. Table 39 shows eight phase-in scenarios that manufacturers may choose from. Manufacturers may comply with phase-in scenarios based on model year (MY) sales or MY U.S. directed production volume.

Under the default compliance scenario shown in the bottom matrix in Table 39, 40 percent of vehicles with gross vehicle weight rating (GVWR) at or below 6,000 pounds must comply in MY 2027, 80 percent in MY 2028, and 100 percent in MY 2029 and after. For the heavier vehicle classes, 100 percent of vehicles must comply starting in MY 2030 in a single step under the default compliance pathway, which provides a full four years of lead time as required by CAA section 202(a)(3)(C). Under this default compliance scenario, chassis cert vehicles between 8501 and 14,000 pounds GVWR may not carry forward Tier 3 NMOG+NO_X credits (as allowed by the early phase-in schedule), and engine cert vehicles between 8501 and 14,000 pounds GVWR may not use HD phase 2 work factor based GHG standards after 2027 (as allowed by the early phase-in schedule). Details are provided in Sections III.B.3, III.C.5, and III.C.9.

The top matrix in Table 39 describes the phase-in scenario where a manufacturer chooses an early phase-in schedule for all vehicle classes. In this scenario 40 percent of the vehicles of each class (each column) comply in MY 2027, 80 percent comply in MY 2028, and 100 percent comply starting in MY 2029 and after. If a manufacturer chooses this phase-in scenario, phase-in percentages for vehicles at or below 8500 pounds GVWR are calculated as one group. Chassis cert vehicles between 8501 and 14,000 pounds GVWR may carry forward Tier 3 NMOG+NO_X credits, and engine cert vehicles between 8501 and 14,000 pounds GVWR may use the HD phase 2 work factor based GHG standards from MY 2026 without a capped GCWR input from MY 2027 to MY 2029. Then in MY 2030 chassis cert vehicles between 8501 and 14,000 pounds GVWR must switch to new work factor based GHG standards with the capped work factor equation.

The six phase-in scenarios between default and early show other options that manufacturers may select from. Any scenario that follows an early phase-in schedule for vehicles at or below 8500 pounds GVWR, results in phase-in percentages being calculated as one group. Any scenario that follows an early phase-in schedule for chassis cert vehicles between 8501 and 14,000 pounds GVWR may carry forward Tier 3 NMOG+NO_X credits. And any scenario that follows an early phase-in schedule for engine cert vehicles between 8501 and 14,000 pounds GVWR may use the HD phase 2 work factor based GHG standards from MY 2026 without a capped GCWR input from MY 2027 to MY 2029.

Vehicles that are not part of the phase-in percentages are considered interim vehicles, which must continue to demonstrate compliance with all Tier 3 regulations with the exception that all vehicles (interim and those that are part of the phase-in percentages) contribute to the NMOG+NO_X fleet average standards shown in Table 40 and Table 41.

EPA requests comment on increasing or decreasing the proposed phase-in percentages shown in Table 39.

2. Proposed NMOG+NO_X Standards

EPA is proposing new NMOG+NO_X standards for MY 2027 and later. The standards are structured to take into account the increased electrification of new light-duty vehicles and MDVs that is projected to occur over the next decade.

The current Tier 3 fleet average NMOG+NO_X emissions standards were fully phased-in for Class 2b and Class 3 (MDV within this proposal) in MY 2022 at 178 and 247 mg/mi, respectively. Tier 3 standards for light-duty vehicles, including LDT3 and LDT4 above 6,000 pounds GVWR and medium-duty passenger vehicles (MDPVs), will be fully phased into the Tier 3 30 mg/mi fleet average NMOG+NO_X standard in MY 2025. Tier 3 standards include a Bin 0 which allows PEV's to be averaged with conventional ICE-based vehicles. In the absence of our proposed NMOG+NO_X standards, as sales of PEVs continue to increase, there would be an opportunity for the ICE portion of light-duty vehicles and MDVs to reduce emission control system content ( i.e., system costs) and comply with less stringent NMOG+NO_X standard bins under Tier 3. If this were to occur, it would have the effect of increasing NMOG+NO_X emissions from the ICE portion of the light-duty vehicle and MDV fleet and delay the overall fleet emission reductions of NMOG+NO_X that would have occurred from increased penetration of PEVs into the light-duty vehicle and MDV fleets.

The structure of the proposed NMOG+NO_X standards has been designed to cap the NMOG+NO_X contribution of ICE vehicles at approximately Tier 3 levels for light-duty vehicles and at approximately 100 mg/mi NMOG+NO_X for MDV. The feasibility of ICE MDV meeting 100 mg/mi NMOG+NO_X by 2027 is discussed in further detail within Chapter 3.2.1.3 of the DRIA. EPA projects the year-over-year reductions in MY 2027 and later light-duty vehicle and MDV NMOG+NO_X standards from an average of 30 mg/mi and 100 mg/mi, respectively, thus would occur primarily from increased year-over-year electrification of new vehicle sales and the resulting averaging of zero emission vehicles with ICE vehicles within the fleet average light-duty vehicle and MDV NMOG+NO_X standards.

The CAA requires 4 years of lead time and 3 years of standards stability for heavy-duty vehicles. There are three categories of vehicles that are currently regulated as light-duty vehicles but are defined within the CAA as heavy-duty vehicles for purposes of lead time and standards stability: The heavy-light-duty truck categories (LDT3 and LDT4) and MDPV. Furthermore, MDVs are also defined as heavy-duty vehicles under the CAA. EPA is proposing several alternative pathways for these three categories of vehicles for compliance with the proposed NMOG+NO_X standards. The Agency's early compliance NMOG+NO_X program would apply to all LDV, LDT, MDPV, and MDV vehicles beginning in 2027 in order to coincide with the timing of increased electrification of these vehicles. However, mandatory regulations beginning in 2027 would not provide 4 years of lead time as required for vehicles defined as heavy-duty under the CAA. To address this issue, we are proposing two schedules for compliance with NMOG+NO_X standards for LDT3, LDT4, MDPV, and MDV. The eight alternatives describe the breadth of compliance scenarios. The two schedules referenced here include one for early compliance and one for later compliance for each reg class.

The early compliance pathway shown in Table 40 has LDT3, LDT4 and MDPV meeting identical and gradually declining fleet average NMOG+NO_X emissions standards to those for LDV, LDT1 and LDT2 as described in Section III.C.2.iii; and includes separate gradually declining fleet average NMOG+NO_X emissions standards for MDV at or below 22,000 pounds GCWR as described in Section III.C.2.iv. This pathway for earlier compliance with NMOG+NO_X emissions standards for LDT3, LDT4, MDPV, and MDV includes additional flexibilities. We request comment on the addition of a temporary “bin 200” (200 mg/mi NMOG+ NO_X) that would apply solely to MY 2027 and MY 2028 Class 3 MDV for manufacturers opting into early compliance for MDV.

The second, and default, schedule to NMOG+NO_X compliance shown in Table 41 has LDV, LDT1, and LDT2 meeting a gradually declining fleet average NMOG+NO_X standards from 2027 through 2032. Vehicles in the LDT3, LDT4, and MDPV categories would continue to meet Tier 3 standards through the end of MY 2029 and then would proceed to meeting a 12 mg/mi NMOG+NO_X standard in a single step in MY 2030 in order to comply with CAA provisions for 4 years of lead time and 3 years of standards stability. Similarly, MDVs would continue to meet Tier 3 standards through the end of MY 2029 and then MDVs at or below 22,000 pounds GCWR would proceed to meeting a 60 mg/mi NMOG+NO_X standard in a single step in 2030 in order to comply with CAA provisions for 4 years of lead time and 3 years of standards stability.

We are also proposing a similar choice between early compliance and default compliance pathways for MDVs with high GCWR, which are defined as being above 22,000 pounds. Under the early compliance pathway, high GCWR MDVs would comply with MY 2027 and later heavy-duty engine criteria pollutant emissions standards beginning with MY 2027 (Section III.C.5). Manufacturers with high GCWR MDVs choosing the early compliance pathway would have additional flexibilities with respect to GHG compliance. They could delay entry into the MDV GHG work factor-based fleet average standards until the beginning of MY 2030 (see Section III.B.3).

Under the default compliance path, high GCWR MDVs would continue to comply with Tier 3 standards until the end of MY 2029 and then would comply with MY 2027 and later heavy-duty engine criteria pollutant emissions standards beginning with MY 2030 in order to comply with CAA provisions for 4 years of lead time. Under this default compliance path, high GCWR MDVs would comply with fleet average MDV GHG emissions beginning with MY 2027 (see Section III.B.3).

i. NMOG+NO_X Bin Structure for Light-Duty Vehicles and MDVs

The bin structure being proposed for light-duty vehicles and MDVs is shown in Table 42. The upper two bins (Bin 160 and Bin 125) are only available to MDV at or below 22,000 pounds GCWR.

For light-duty vehicles, the proposed bin structure removes the two highest Tier 3 bins (Bin 160 and Bin 125) and adds several new bins (Bin 60, Bin 40, Bin 10). For MDV, the proposed bin structure moves away from separate bins for Class 2b and Class 3 vehicles, adopting light-duty vehicle bins with higher bins only available to MDV.

ii. Smog Scores for the Fuel Economy and Environment Label

This proposed rule includes new Tier 4 bins that do not directly align with the existing smog scores used on the Fuel Economy and Environment Label (see 40 CFR 600.311–12(g)). We are therefore seeking comment on fitting the new Tier 4 bins into the existing MY 2025 Tier 3 smog score structure for the Tier 4 phase-in period (MY 2027–2029), and we are also seeking comment on a new Tier 4 smog score structure for MY 2030 and later. For both ratings structures, it is important to avoid having any bin assigned to a higher score in a newer model year than it was assigned in an older model year (no “backsliding” for smog score ratings).

For MY 2027–2029, EPA is seeking comment on how the new Tier 4 bins and California LEV IV categories should fit into the existing Tier 3 bin structure for smog scores. For example, EPA seeks comment on what smog score should apply to the new Tier 4, bin 10 and new California LEV IV category of SULEV 15. The current MY 2025 Tier 3 rating system in Table 1 of 40 CFR 600.311–12(g) has a smog score of 10 for bin 0 and a score of 7 for bin 20, suggesting that a smog score of 8 might be appropriate for SULEV 15 and a smog score of 9 might be appropriate for bin 10; however we may also consider assigning bin 10 and SULEV 15 to the same rating, either 8 or 9. In addition, EPA is seeking comment on the smog scores that should apply to Tier 4 bin 60/LEV IV ULEV 60, Tier 4 bin 40/LEV 40, and SULEV 25. We seek comment on assigning bin 60/ULEV 60 a score of 4, sharing a rating with bin 70 ULEV 70; assigning bin 40/ULEV 40 a rating of 5, sharing a rating with bin 50; and assigning SULEV 25 a rating of 6, sharing a rating with bin 30. These assignments would allow the MY 2025 Tier 3 ratings to remain in place, while placing the new Tier 4 bins and LEV IV categories in logical locations.

For MY 2030 and later, we seek comment on maintaining the smog rating bin assignments from MY 2027–2029 for bin 40/ULEV 40 and lower bins. Since there is no longer a need for Tier 3 bin 160 or bin 125 after MY 2029, we seek comment on assigning a smog score of 2 to bin 70/ULEV 70, a score of 3 to bin 60/ULEV 60, and a score of 4 to bin 50/ULEV 50. This approach allows bin 40 through bin 70 to each correspond to a single smog score.

We welcome comment on this approach and after consideration of comment may adopt final smog scores that are higher or lower.

iii. NMOG+NO_X Standards and Test Cycles for Light-Duty Vehicles

EPA is proposing increasingly stringent light-duty vehicle NMOG+NO_X standards (Table 43) for the sales weighted average inclusive of all LDV, LDT and MDPV (e.g. ICE vehicles, BEVs, PHEVs, fuel cell, vehicles, etc.). The proposed phase-in of the standards by vehicle category is described in Section III.C.1.

EPA recognizes that vehicles will differ with respect to their levels of NMOG+NO_X emissions control depending on degree of electrification, choice of fuel, ICE technology, and other differences. The proposed fleet average standards are feasible in light of anticipated technology penetration rates commensurate with the GHG technology implementation during this same time period and increasing electrification of light-duty vehicles.

The declining fleet average standards over the FTP cycle ensure that NMOG+NO_X continues to decrease over time for the light-duty fleet. The elimination of the two highest bins (Table 42) caps the maximum NMOG+NO_X emissions from an individual new vehicle model. EPA anticipates that electrified technology, including BEVs, will play a significant role within the compliance strategies for meeting the fleet average NMOG+NO_X standards for each manufacturer. However, EPA anticipates that manufacturers may use multiple technology solutions to comply with fleet average NMOG+NO_X standards. For example, a manufacturer may choose to offset any ICE increases with increased BEV sales, or could alternatively improve engine and exhaust aftertreatment designs to reduce emissions for ICE vehicles while planning for a more conservative percentage of BEV sales as part of their compliance with the declining fleet average NMOG+NO_X standards reflected in Table 43.

Since technologies are available to further reduce NMOG+NO_X emissions relative to the current fleet, and since more than 20 percent of MY 2021 Bin 30 vehicle certifications already show an FTP certification value under 15mg/mi NMOG+NO_X, achieving reduced NMOG+NO_X emissions through improved ICE technologies is feasible and reasonable. Regardless of the compliance strategy chosen, overall, the fleet will become significantly cleaner.

EPA is proposing that the same bin-specific numerical standards be applied across four test cycles: 25 °C FTP, HFET, US06 and SC03. This means that a manufacturer certifying a vehicle to comply with Bin 30 NMOG+NO_X standards would be required to meet the Bin 30 emissions standards for all four test cycles. Meeting the same NMOG+NO_X standards across four cycles is an increase in stringency from Tier 3, which had one standard for the higher of FTP and HFET, and a less stringent composite based standard for the SFTP (weighted average of 0.35*FTP + 0.28*US06 + 0.37*SC03).

Present-day engine, transmission, and exhaust aftertreatment control technologies allow closed-loop air-to-fuel (A/F) ratio control and good exhaust catalyst performance throughout the US06 and SC03 cycles. As a result, higher emissions standards over these cycles are no longer necessary. Approximately 60 percent of the test group/vehicle model certifications from MY 2021 have higher NMOG+NO_X emissions over the FTP cycle as compared to the US06 cycle, supporting the conclusion that a single standard is feasible and appropriate.

EPA is proposing to replace the existing −7 °C FTP NMHC fleet average standard of 300 mg/mi for passenger cars and LDT1, and 500 mg/mi fleet average standard for LDT2 through LDT4 and MDPV, with a single NMOG+NO_X fleet average standard of 300 mg/mi for LDV, LDT1 through 4 and MDPVs to harmonize with the combined NMOG+NO_X approach adopted in Tier 3 for all other cycles ( i.e., 25 °C FTP, HFET, US06, and SC03 cycles). EPA emissions testing at −7 °C FTP showed that a 300 mg/mi standard is feasible with a large compliance margin for NMOG+NO_X . See DRIA for additional certification data to support the proposed fleet average NMOG+NO_X standard of 300 mg/mi. EPA did not include EVs in the assessment of the proposed fleet average standard and therefore EVs and other zero emission vehicles are not included and not averaged into the fleet average −7 °C FTP NMOG+NO_X standards.

Since −7 °C FTP and 25 °C FTP are both cold soak tests that include TWC operation during light-off and at operating temperature, it is appropriate to apply the same Tier 3 useful life to both standards.

EPA requests comment on whether a 400 mg/mi cap should replace the proposed 300 mg/mi fleet average for the −7 °C FTP NMOG+NO_X standard. Additional discussion on the feasibility of the proposed standards can be found in DRIA Chapter 3.2.

The proposed standards apply equally at high altitude, rather than including compliance relief provisions from Tier 3 for certification at high altitude. Modern engine management systems can use idle speed, engine spark timing, valve timing, and other controls to offset the effect of lower air density on exhaust catalyst performance at high altitudes.

iv. NMOG+NO_X Standards and Test Cycles for MDV at or Below 22,000 lb GCWR

The proposed MDV (medium duty vehicles, 8,501 to 14,000 pounds GVWR) NMOG+NO_X standards for vehicles at or below 22,000 pounds GCWR are shown in Table 44. Certification data show that for MY 2022–2023, 75 percent of sales-weighted Class 2b/3 gasoline vehicle certifications were below 120 mg/mi in FTP and US06 tests. Diesel-powered MDVs designed for high towing capability ( i.e., GCWR above 22,000 pounds) were higher (75 percent were below 180 mg/mi) but they are not being used to inform the proposed MDV standard because the Agency is proposing the requirement that MDVs (diesel and gasoline) with GCWR (gross combined weight rating) above 22,000 pounds comply with criteria pollutant emissions standards under the HD engine program, as described in Section I.A.1, MDVs at or below 22,000 pounds GCWR have comparable emissions performance to LDVs and LDTs. The year-over-year fleet average FTP standards for MDV at or below 22,000 pounds GCWR and the rationale for the manufacturer's choice of early compliance and default compliance pathways is described in Section III.C.1. For further discussion of MDV NMOG+NO_X feasibility, please refer to Chapter 3.2 of the DRIA.

The proposed MDV NMOG+NO_X standards are based on applying existing light-duty vehicle technologies, including electrification, to MDV. As with the light-duty vehicle categories, EPA anticipates that there will be multiple compliance pathways, such as increased electrification of vans together with achieving 100 mg/mile NMOG+NO_X for ICE-power MDV. Present-day MDV engine and aftertreatment technology allows fast catalyst light-off after cold-start followed by closed-loop A/F control and excellent exhaust catalyst emission control on MDV, even at the adjusted loaded vehicle weight, ALVW [(curb + GVWR)/2] test weight, which is higher than loaded vehicle weight, LVW (curb + 300 pounds) used for testing light-duty vehicles. The proposed MDV standards begin to take effect in 2030, consistent with the CAA section 202(a)(3)(C) lead time requirement for these vehicles.

If a manufacturer has a fleet mix with relatively high sales of MDV BEV, that would ease compliance with MDV NMOG+NO_X fleet average standards for MDV ICE-powered vehicles. If the manufacturer has a fleet mix with relatively low BEV sales, then improvements in NMOG+NO_X emissions control for ICE-powered vehicles would be required to meet the fleet average standards. Improvements to NMOG+NO_X emissions from ICE-powered vehicles are feasible with available engine, aftertreatment, and sensor technology, and has been shown within an analysis of MY 2022–2023 MDV certification data (see DRIA Chapter 3.2). Fleet average NMOG+NO_X will continue to decline to well below the final Tier 3 NMOG+NO_X standards of 178 mg/mi and 247 mg/mi for Class 2b and 3 vehicles, respectively.

The proposed standards require the same MDV numerical standards be met across all four test cycles, the 25 °C FTP, HFET, US06 and SC03, consistent with the proposed approach for light-duty vehicles described in Section III.C.1.ii. This would mean that a manufacturer certifying a vehicle to bin 60 would be required to meet the bin 60 emissions standards for all four cycles.

Meeting the same NMOG+NO_X standard across four cycles is an increase in stringency from Tier 3, which had one standard over the FTP and less stringent bin standards for the HD–SFTP (weighted average of 0.35×FTP + 0.28×HDSIM + 0.37×SC03, where HDSIM is the driving schedule specified in 40 CFR 86.1816–18(b)(1)(ii)). Current MDV control technologies allow closed-loop A/F control and high exhaust catalyst emissions conversion throughout the US06 and SC03 cycles, so compliance with higher numerical emissions standards over these cycles is no longer needed. Manufacturer submitted certification data and EPA testing show that Tier 3 MDV typically have similar NMOG+NO_X emissions in US06 and 25 °C FTP cycles, and NMOG+NO_X from the SC03 is typically much lower. Testing of a 2022 F250 7.3L at EPA showed average NMOG+NO_X emissions of 56 mg/mi in the 25 °C FTP and 48 mg/mi in the US06. Manufacturer-submitted certifications show that MY 2021+2022 gasoline 2b/3 trucks achieved, on average, 69/87 mg/mi in the FTP, and 75/NA mg/mi in the US06, and 18/25 mg/mi in the SC03.

Several Tier 3 provisions would end with the elimination of the HD–SFTP and the combining of bins for Class 2b and class 3 vehicles. First, Class 2b vehicles with power-to-weight ratios at or below 0.024 hp/pound could no longer replace the full US06 component of the SFTP with the second of three sampling bags from the US06. Second, class 3 vehicles would no longer use the LA–92 cycle in the HD–SFTP calculation but would rather have to meet the NMOG+NO_X standard in each of four test cycles (25 °C FTP, HFET, US06 and SC03). Third, the SC03 could no longer be replaced with the FTP in the SFTP calculation.

The proposed standards do not include relief provisions for MDV certification at high altitude. Modern engine systems can use idle speed, engine spark timing, valve timing, and other controls to offset the effect of lower air density on catalyst light-off at high altitudes.

EPA is also proposing a new −7 °C FTP NMOG+NO_X fleet average standard of 300 mg/mi for gasoline and diesel MDV. EPA testing has demonstrated the feasibility of a single fleet average −7 °C FTP NMOG+NO_X standard of 300 mg/mi across light-duty vehicles and MDV. EPA did not include EV's in the assessment of the proposed fleet average standard and therefore EVs and other zero emission vehicles are not included and not averaged into the fleet average −7 °C FTP NMOG+NO_X standards.

Since −7 °C FTP and 25 °C FTP are both cold soak tests that include TWC operation during light-off and at operating temperature, it is appropriate to apply the same Tier 3 useful life to both standards.

EPA requests comment on whether a 400 mg/mi cap should replace the proposed 300 mg/mi fleet average for the −7 °C FTP NMOG+NO_X standard. Additional discussion on the feasibility of the proposed standards can be found in DRIA 3.2.

3. Revised PM Standard

i. PM Standard and Test Cycles for Light-Duty Vehicles and MDV

EPA is proposing several changes to the current Tier 3 p.m. requirements. These changes include a more stringent standard for the 25 °C FTP and US06 test cycles, and addition of a cold PM standard for the existing Cold Test (−7 °C FTP). The same numerical standard of 0.5 mg/mi and the same certification test cycles are being proposed for both light-duty vehicles (LDV, LDT, and MDPV) and MDV (Class 2b and 3 vehicles) at or below 22,000 pounds GCWR, as shown in Table 46 for light-duty vehicles and Table 47 for MDV. Comparisons to current Tier 3 p.m. standards are provided for reference. The same Tier 3 defined useful life standard applies to all three test cycles.

EPA believes that these standards are appropriate and feasible to reduce PM emissions over the broadest range of vehicle operating and environmental conditions. The current Tier 3 p.m. standards capture only a portion of vehicle operation. EPA has observed that PM emissions increase dramatically during cold cold-starts and during high engine power driving not captured by on-cycle tests. While several vehicles in the current fleet demonstrate emissions performance that could comply with the proposed standards at 25 °C, the −7 °C PM standard will most likely lead to the adoption of Gasoline Particulate Filters (GPF) as the most practical and cost-effective means to control PM emissions. GPF is a mature and cost-effective technology that operates under all vehicle operating conditions. Current GPF technology ( e.g., MY 2022 GPFs) has high filtration efficiency, even during and immediately after GPF regenerations, when the GPF cannot rely on soot loading to improve filtration. GPFs are being widely used in Europe and China and vehicle manufacturers are already building GPF-equipped vehicles in the United States for sale in other countries.

In support of the proposed PM standards, EPA has conducted robust and detailed GPF testing to characterize GPF performance. During this testing EPA not only measured the change in PM and polyaromatic hydrocarbon (PAH) emissions, with and without the GPF installed, but also assessed impacts on GHG emissions and vehicle performance. In summary, EPA noted that with a properly sized GPF, no measurable impact on GHG emissions and only slight impact on vehicle performance should occur, while PM emissions are typically reduced by over 95 percent and filter-collected PAH emissions are typically reduced by over 99 percent. A review of GPF technology, analyses of its benefits, challenges and costs, and demonstration of the feasibility of the proposed PM standard are discussed in Chapter 3.2 of the DRIA.

ii. Phase-In for Light-Duty Vehicles and MDV at or Below 22,000 lb GCWR

The proposed phase-in for the PM standard is the same as for other criteria emissions, as described in Section III.C.1. EPA requests comment on accelerating the phase-in for PM relative to other criteria emissions requirements of this rule (NMOG+NO_X, CO, HCHO, NMOG+NO_X previsions aligned with the CARB ACC II program, certifying high GCWR MDV under the HD engine program for criteria pollutants, evaporative emissions, and elimination of enrichment) because GPFs are a mature technology that has been in mass production since 2017 in Europe, since 2020 in China, and since 2023 in India, and because several manufacturers assemble vehicles equipped with GPF in the U.S. for export to other markets. An accelerated phase-in could also be supported by increased availability of BEVs. EPA requests comment on accelerating PM phase-in to 50% or 80% in MY 2027 and 100% in MY 2028 for vehicles with GVWR≤14,000 pounds under the early compliance pathway, and for vehicles with GVWR≤6000 pounds under the default compliance pathway.

iii. Feasibility of the PM Standard and Selection of Test Cycles

The PM standards that EPA is proposing would require vehicle manufacturers to produce vehicles that emit PM at GPF-equipped levels (GPF-level PM). The proposed rule does not require that GPF hardware be used on vehicles, but rather reflects EPA's judgement that it is feasible and appropriate to achieve the proposed PM standards considering the availability of this technology. It is expected that GPF technology will be the most practical and cost-effective pathway for meeting the standard, especially in −7 °C FTP and US06 test cycles.

To establish what level of PM standards are appropriate for this proposal, EPA conducted a test program that considered multiple vehicle types and powertrain technologies as well as GPF technology. Much like many other aspects of aftertreatment technology and emissions controls, GPFs have gone through considerable development since their initial introduction and as a result have provided significantly improved effectiveness with each successive iteration. EPA evaluated available technology with respect to the emissions benefits observed over the regulated cycles, including two generations of GPF technology.

The PM test program included five chassis dynamometer test cells at EPA, Environment and Climate Change Canada (ECCC), and FEV North America Inc., and five test vehicles (2011 F150, 2019 F150, 2021 F150 HEV, 2021 Corolla, 2022 F250) tested in stock and GPF configurations. These test vehicles include a passenger car, three Class 2a trucks, and one Class 2b truck. The two generations of GPFs include series production MY 2019 and series production MY 2022 models, catalyzed and bare substrates, and close-coupled and underfloor GPF installations. Results from the test program are summarized in Figure 14. The study demonstrates that Tier 3 light-duty vehicles and MDV equipped with GPFs that are currently in series production in Europe and China ( i.e., MY 2022 GPF) can easily meet the proposed standard of 0.5 mg/mi in all three test cycles with a large compliance margin.

In Figure 14, tests without GPFs are shown in black, tests with MY 2019 GPFs are shown in gray, and tests performed with MY 2022 GPFs are shown in stripes. The top of each bar represents the highest measurement set mean of one vehicle in one laboratory and the bottom of each bar represents the lowest measurement set mean. The tops of the black bars are off scale in this figure, but their values are indicated with numbers above the bars.

The striped bars include PM measurements from two vehicles: A 2021 F150 HEV (Class 2a vehicle) retrofit with a MY 2022 bare GPF in the underfloor location, and a 2022 F250 7.3L (Class 2b vehicle) retrofit with two MY 2022 bare GPFs, one for each engine bank, in the underfloor location.

Results show that only the GPF-equipped vehicles could meet the 0.5 mg/mi proposed standard in the −7 °C FTP test. The MY 2019 GPFs failed to meet the proposed standard in the US06 because passive GPF regeneration occurred as a result of high exhaust gas temperatures (GPF inlet gas temperature greater than 600 °C). GPF regeneration oxidizes stored soot and reduces GPF filtration efficiency during and immediately after the regeneration. Vehicles equipped with MY 2022 GPFs met the 0.5 mg/mi standard in all three test cycles with a compliance margin of 100 percent or more. The MY 2022 GPFs showed high filtration efficiencies generally over 95 percent, even in the US06 cycle because they did not rely on stored soot for high filtration efficiency. The mean of test sets with MY 2022 GPF are over 95 percent lower than the mean of non-GPF test sets in each of the three test cycles.

The data show that MY 2022 GPFs are capable of emissions performance commensurate with EPA's goal of requiring GPF-level emissions over the broadest range of vehicle operating and environmental conditions. The results support the conclusion that a 0.5 mg/mi PM standard over the −7 °C FTP, 25 °C FTP, and US06 test cycles is feasible and appropriate.

The −7 °C FTP test cycle is crucial to the proposed PM standard because it differentiates vehicles with GPF-level PM from vehicles with Tier 3 levels of PM, and because −7 °C is an important real-world temperature that addresses uncontrolled cold PM emissions in Tier 3.

The US06 cycle is similarly crucial to the proposed PM standard because it induces passive GPF regeneration across vehicle-GPF combinations ( i.e., light-duty vehicles and MDV, naturally aspirated and turbocharged engines, close-coupled and underfloor GPF installations, bare and catalyzed GPFs), and GPF regeneration is an important mode of operation with respect to emissions. GPF regeneration does not occur in the −7 °C FTP, 25 °C FTP, and LA–92 across vehicle and exhaust system combinations. Including a certification test in which passive GPF regeneration occurs is important because it ensures low tailpipe PM during and immediately after GPF regenerations, which occur during high load operation, including road grades, towing, and driving at higher speeds.

Older GPF technology does not exhibit high PM filtration during and immediately after GPF regeneration. Older GPF technology can have filtration efficiency as low as 50 percent, as opposed to generally more than 95 percent demonstrated by the MY 2022 GPFs shown in Figure 14. Without the US06 test cycle, manufacturers could employ old GPF technology that has poor PM control during high load operation. Average US06 p.m. from the MY 2019 GPFs is 15 times higher than average US06 p.m. from the MY 2022 GPFs from the data shown in Figure 14.

MDVs are certified at higher test weights and road load coefficients than light-duty vehicles, but measurements show that series production MY 2022 GPF technology enables meeting the proposed 0.5 mg/mi standard equally well on MDV as light-duty vehicles, with compliance margins of over 100 percent. Measurements comparing PM from a Class 2b vehicle with a current technology GPF (MDV MY 2022 F250 with a MY 2022 GPF), to a Class 2a vehicle with a current technology GPF (LDV MY 2021 F150 HEV with a MY 2022 GPF) are shown in Figure 15. Additional testing supports the same conclusion for Class 3 vehicles.

As was the case for light-duty vehicles, the −7 °C FTP cycle is crucial because it differentiates Tier 3 levels of PM from GPF-level PM and because −7 °C is an important real-world temperature that addresses uncontrolled cold PM emissions in Tier 3. Furthermore, as was the case for light-duty vehicles, the US06 cycle is crucial to the proposed PM standard for MDV because the US06 induces passive GPF regeneration across different vehicle-GPF combinations and GPF regeneration is an important mode of operation with respect to emissions. The LA–92, which was used instead of the US06 cycle on Class 3 vehicles in Tier 3, does not induce GPF regeneration, and for this reason the US06 cycle is required for all light-duty vehicles and MDV in the proposed standard.

GPF inlet gas temperatures measured on the MY 2022 F250 7.3L during sampled US06, sampled hot LA–92, and −7 °C FTP operation, are shown in Figure 16. Fast soot oxidation begins in a GPF around 600 °C. The US06 is the only cycle where GPF inlet gas temperature of the MY 2022 F250 exceeded 600 °C and it exceeded it for a significant amount of time (265 seconds), resulting in passive GPF regeneration. Peak inlet gas temperature was 674 °C in the US06. In contrast, GPF inlet gas temperature never exceeded 600 °C in the LA–92 and only exceeded 500 °C for a limited period of time. Peak GPF inlet gas temperature in the LA–92 (566 °C) was closer to the −7 °C FTP (493 °C) than the US06 (674 °C).

In this vehicle configuration, GPF regeneration does not occur in LA–92, 25 °C FTP, or −7 °C FTP cycles to a significant degree, which makes those cycles unable to force PM emissions control commensurate with MY 2022 GPF technology. Additional tests performed with the MY 2022 F250 with MY 2022 GPFs using test weight and road load coefficients from a MY 2022 F350 Class 3 vehicle show that even with the higher test weight and road load, the GPFs did not undergo substantial regeneration in the LA–92 cycle. Without requiring the US06 as a certification cycle for MDV, the GPF may not undergo GPF regeneration and high PM filtration, which new GPF technology offers, would not be ensured during high load operation, including trailer towing, road grades, or high speeds, for which these vehicles are designed.

Under the proposed standards, Class 2b vehicles with power-to-weight ratios at or below 0.024 hp/pound could no longer replace the full US06 component of the SFTP with the second of three phases of the US06 for their PM certification. If a test vehicle is unable to follow the trace, it must perform maximum effort to follow the trace, and that would not result in a voided test. This procedure mimics how vehicles with low power-to-weight tend to be driven in the real world.

Also, Class 3 vehicles would not use the LA–92 for PM certification, as they did in Tier 3. Instead, Class 3 vehicles would have to meet the 0.5 mg/mi PM standard across the same three test cycles as light-duty vehicles and other MDV: −7 °C FTP, 25 °C FTP, and US06.

GPF technology is both mature and cost effective. It has been used in series production on all new pure gasoline direct injection (GDI) vehicle models in Europe since 2017 (WLTC and RDE test cycles) and on all pure GDI vehicles in Europe since first registration of 2019 (WLTC and RDE test cycles) to meet Europe's emissions standards. All gasoline vehicles in China have had to meet similar standards in the WLTC since 2020, and in the WLTC and RDE starting in 2023. All pure GDI vehicles in India also have to meet similar GPF-forcing standards starting in 2023. GPFs like the MY 2022 GPFs described by Figure 14 and Figure 15 are being used in series production by U.S., European, and Asian manufacturers, and several manufacturers currently assemble vehicles equipped with GPF in the U.S. for export to other markets.

Further details and discussion of test vehicles, GPFs, test procedures, and results are provided in the DRIA 3.2.

iv. PM Measurement Considerations

Current test procedures, as outlined in 40 CFR part 1066, allow robust gravimetric PM measurements well below the proposed PM standard of 0.5 mg/mi. Repeat measurements in EPA laboratories, at different levels of PM below 0.5 mg/mi, are shown in Figure 17. The size of the error bars relative to the measurement averages at and below 0.5 mg/mi demonstrates that the measurement methodology is sufficiently precise to support a 0.5 mg/mi standard. Other than selecting test settings appropriate for quantifying low PM, no test procedure changes are needed. Good engineering judgment should be used with respect to dilution factor, filter media selection, filter flow rate, using a single filter for all phases of a test cycle, filter static charge removal, robotic weighing, and minimizing contamination during filter handling. EPA is not reopening the test procedures, nor does the agency believe that test procedure changes are required, to measure PM for the proposed PM standards. Further discussion of selecting test settings is discussed in the DRIA.

v. Pre-Production Certification

EPA is proposing that PM emissions be certified over −7 °C FTP, 25 °C FTP, and US06 cycles with at least one Emissions Data Vehicle (EDV) per test group in model years 2027, 2028, and 2029+ for light-duty vehicles and MDV compliant with the new 0.5 mg/mi standard in the early compliance program. In the default program, PM emissions would be certified with at least one EDV per test group in model years 2027, 2028, and 2029+ for light-duty vehicles compliant with the new standard, and with at least one EDV per test group in 2030+ for MDV compliant with the new standard. See 40 CFR 86.1829–15. This level of certification testing matches the requirement to certify gaseous criteria emissions at the test group level and ensures that the significantly lower PM emissions standard of 0.5 mg/mi is being met across a wide range of ICE technologies. The requirement to certify PM emissions at the test group level is an increase in testing requirements relative to Tier 3, where PM emissions could be certified at the durability group level. The increase in testing requirement is tempered by the phase-in of the PM standard described in Table 39, and since BEVs do not require testing.

EPA solicits comment on whether pre-production PM certification should go back to testing at the durability group level in 2030 for light-duty vehicles and in 2031 for MDV after PM control technologies have been demonstrated across a range of ICE technologies. If PM certification were to go back to testing at the durability level in 2030/2031, manufacturers would still have to attest that the 0.5 mg/mi standard is being met by all test groups.

EPA is proposing to update the instructions to select a worst-case test vehicle from each test group by considering −7 °C FTP testing with all the other criteria standards. This contrasts with the current approach, in which manufacturers select worst-case test vehicles separate from −7 °C FTP testing and then select a test vehicle for −7 °C FTP testing from those test vehicles included in the same durability group. The current approach is appropriate for measuring CO and NMHC for −7 °C FTP testing. However, the concern for PM emissions with −7 °C FTP testing are on par with concern for the other standards already considered for selecting a worst-case test vehicle to represent the test group. EPA requests comments on different approaches for selecting test vehicles to most effectively apply test resources to ensure compliance with the range of emission standards.

vi. In-Use Compliance Testing

In addition to pre-production certification, the proposed PM standard requires in-use compliance testing as part of the in-use vehicle program (IUVP). The proposed PM standard requires that PM from each in-use test vehicle be tested using 25 °C FTP and US06 cycles and meet the 0.5 mg/mi PM standard. In-use vehicles are also required to comply with the −7 °C FTP standard, but manufacturers are not required to test using this cycle to reduce testing burden. EPA may test in-use vehicles using −7 °C FTP, 25 °C FTP, and US06 cycles to ensure compliance. Given the certification test demonstration for meeting the −7 °C FTP PM standard, along with expected IUVP testing over 25 °C FTP and US06 cycles and the potential for EPA testing, we find that there is not enough justification to require the additional test burden associated with IUVP testing for PM emissions over the −7 °C FTP cycle.

vii. OBD Monitoring

Since GPF technology is expected to be an important enabler for meeting the proposed PM standard, OBD monitoring of the GPF system is necessary. If a vehicle uses a GPF, the OBD system must detect GPF-related malfunctions, store trouble codes related to detected malfunctions, and alert operators appropriately.

It is expected that the OBD system detect system tampering and major malfunctions using, for example, using a pressure sensor. The same pressure sensor that senses GPF soot overloading may be used to detect system tampering and major malfunctions. It is expected that if a pressure sensor is used for OBD functions, it should detect a GPF pressure drop greater than zero and less than an expected maximum as a function of engine operating point. Further OBD discussion is provided in Section III.G.

viii. GPF Cost

A GPF cost model is described in DRIA Chapter 3.2 and GPF cost is included in the OMEGA model. The model anticipates the direct manufacturing cost (DMC) for a bare downstream GPF ranges from $51 dollars for a 1.0-liter engine using a relatively low GPF volume to engine displacement ratio, up to $166 dollars for a 7.0 liter engine using a relatively high GPF volume to engine displacement ratio.

4. Revised CO and Formaldehyde (HCHO) Standards

i. CO and HCHO Standards for Light-Duty Vehicles

EPA is proposing CO and formaldehyde (HCHO) emissions caps for light-duty vehicles shown in Table 48. The proposed value of the CO emissions cap for the 25 °C FTP, HFET, US06, SC03 test cycles, 1.7 g/mi, is the same as the Tier 3 bin-specific standards for Bin 50 and Bin 70, but it must be met across four cycles instead of the Tier 3 cycles of 25 °C FTP and a separate standard for the SFTP.

The proposed value of the HCHO emissions cap, 4 mg/mi, is the same as the Tier 3 bin-specific standards for Bin 20 through Bin 160. The HCHO cap only applies to the 25 °C FTP, as in Tier 3.

The proposed CO emissions cap for the −7 °C FTP is 10.0 g/mi. This differs from the current standards in that the same cap applies to all light-duty vehicles. The current CO cap is 10.0 g/mi for LDV and LDT1, and 12.5 g/mi for LDT2, LDT3, LDT4, and MDPV.

ii. CO and HCHO Standards for MDV at or Below 22,000 lb GCWR

EPA is proposing CO and formaldehyde (HCHO) emissions caps for MDV at or below 22,000 pounds GCWR shown in Table 49. The proposed value of the CO emissions cap for the 25 °C FTP, HFET, US06, SC03 test cycles, 3.2 g/mi, is the same as the Tier 3 bin-specific standard for Bin 20 through Bin 160, but it must be met across four cycles instead of the Tier 3 cycles of 25 °C FTP and a separate standard for the SFTP.

The proposed value of the HCHO emissions cap, 6 mg/mi, is the same as the Tier 3 bin-specific standards for Bin 20 through Bin 160. The HCHO cap only applies to the 25 °C FTP, as in Tier 3.

The proposed CO emissions cap for the −7 °C FTP is 10.0 g/mi.

Present-day MDV gasoline engine aftertreatment technology allows fast catalyst light-off followed by closed-loop A/F control and excellent emissions conversion on Class 2b and 3 vehicles, even at the ALVW [(curb + GVW)/2] test weight, which is higher than light-duty vehicle test weight of LVW (curb + 300 pounds). Testing of a 2022 F250 7.3L in the −7 °C FTP at EPA showed average CO emissions of 2.7 g/mi CO, demonstrating that a 10.0 g/mi standard is feasible for MDV.

5. Requirements To Certify MDV With High GCWR Under the HD Engine Program for Criteria Emissions

The Agency is proposing mandatory engine certification for compliance with criteria pollutant emissions standards for MDVs above 22,000 pounds GCWR. The proposed standards would include both spark ignition and compression ignition (diesel) engines, complete and incomplete vehicles, and require compliance with all of the same engine certification criteria pollutant requirements and standards as for 2027 and later engines installed in Class 4 and higher HD vehicles, including NMHC, CO, NO_X and PM standards, useful life, warranty and in-use requirements that were finalized in December 2022. Complete MDVs would still require chassis dynamometer testing for demonstrating compliance with GHG standards as described in Section III.B.3 and would be included within the fleet average MDV GHG emissions standards along with the other MDVs at or below 22,000 GCWR. Manufacturers could certify incomplete MDVs to GHG standards under 40 CFR 86.1819 or 40 CFR part 1037. Note that existing regulations (40 CFR 1037.150(l)) allow a comparable dual testing methodology, which utilizes engine dynamometer certification for demonstration of compliance with criteria pollutant emissions standards while maintaining chassis dynamometer certification for demonstration of compliance with GHG emissions standards under 40 CFR 86.1819. One manufacturer has been using this provision to certify all gasoline vehicles over 14,000-pound GVWR and the corresponding engines since MY 2016. Proposed requirements are summarized in Table 50.

The purpose of this proposed change is to ensure that criteria pollutant emissions are controlled under the sustained high load conditions that many of these vehicles encounter, particularly during heavy towing operation. Some Class 2b and Class 3 trucks have towing capability exceeding that of Class 4 and Class 5 trucks. Some diesel Class 3 emissions families have GCWR in excess of 40,000 pounds. The agency considers trucks above 22,000 pounds GCWR to be predominantly work vehicles that will reasonably encounter significant towing and/or other highly loaded use during normal operation. Many of these vehicles currently do not have exhaust aftertreatment sized for effective emissions control under sustained high loads. Current chassis dynamometer test cycles used for demonstrating compliance do not include such sustained high load operation. Manufacturers have also indicated to the agency that there is a trade-off between sustained high load exhaust aftertreatment performance and cold-start light off performance over the FTP cycle. It is more appropriate that trucks above 22,000 pounds GCWR be tested as heavy-duty engines due capabilities and predominant use that are much more closely aligned with Class 4 and above heavy-duty applications than with light-duty vehicles and light-duty trucks.

Based on an analysis of the MY 2022 and MY 2023 emissions certification data, most MDV complete and incomplete diesel pickup trucks would be required to switch to engine dynamometer certification; MY 2022 vans would not be required to use engine dynamometer certification; and only a small number of gasoline pickup trucks would be required to switch to engine certification.

As described in Section III.C.1, under the CAA trucks over 6,000 pounds GVWR are allowed 4 years of lead time before they are required to begin implementation of new criteria pollutant emission standards. The agency is providing an earlier implementation pathway beginning in 2027 in order for manufacturers to better plan for program changes over a larger time window and to encourage earlier emissions reductions. Because of this earlier opportunity for manufacturers and the potential for the agency to realize earlier emission reductions, we are providing additional flexibilities.

Manufacturers who choose to optionally implement this engine certification requirement for all their trucks above 22,000 pounds GCWR beginning in 2027 model year will be allowed an additional GHG compliance flexibility. If manufacturers choose to certify their vehicles to these proposed standards in 2027 MY, they will be allowed to continue to use the HD GHG Phase 2 based final 2026 work factor-based target GHG standards, without a capped GCWR input for the work factor-based target standard. This allowance would continue through 2029 MY, after which vehicle manufacturers would be required to switch to the new work factor standards and the capped GCWR work factor equation input proposed in Section III.B.3 in 2030. This will provide an opportunity for manufacturers to balance the implementation of new GHG program plans for these much higher GCWR vehicles while also achieving important criteria pollutant emission reductions earlier in the program. The agency seeks comments on additional flexibilities that achieve the same or similar emission reductions.

The default compliance pathway for MDV would be compliance with 2027 and later HD engine emissions standards beginning in 2030. Under the default compliance pathway, GHG compliance flexibilities to extend compliance with the heavy-duty Phase 2 GHG standards beyond the 2026 model year do not apply and manufacturers would need to meet the proposed MDV GHG standards described in Section III.B.3 beginning with the 2027 model year.

The Agency seeks comment on several alternatives for high GCWR MDV criteria pollutant emissions standards: (1) MDV above 22,000 pounds GCWR would comply with the MDV chassis dynamometer standards proposed in Section III.C with the introduction of additional engine-dynamometer-based standards over the Supplemental Emissions Test as finalized within the Heavy-duty 2027 and later standards; (2) MDV above 22,000 pounds GCWR would comply with the MDV chassis dynamometer standards proposed in Section III.C with additional in-use testing and standards comparable to those used within the California ACC II; (3) Introduction of other test procedures for demonstration of effective criteria pollutant emissions control under the sustained high-load conditions encountered during operation above 22,000 pounds GCWR.

6. Refueling Standards for Incomplete Spark-Ignition Vehicles

The agency is proposing to require that incomplete medium duty vehicles meet the same on-board refueling vapor recovery (ORVR) standards as complete vehicles. Incomplete vehicles have not been required to comply with the ORVR requirements to date because of the potential complexity of their fuel systems, primarily the filler neck and fuel tank. Unlike complete vehicles, which have permanent fuel system designs that are fully integrated into the vehicle structure at time of original construction by manufacturers, it was previously believed that incomplete vehicles may need to change or modify some of fuel system components during their finishing assembly. For this reason, it was previously determined that ORVR might introduce complexity for the upfitters that is unnecessarily burdensome.

Since then, the agency has newly assessed both current ORVR equipped vehicles and their incomplete versions. Based on our updated assessment, the agency believes that the fuel system designs are almost identical with only the ORVR components removed for the incomplete version. The complete and incomplete vehicles appear to share the same fuel tanks, lines, and filler tubes. The original thought that extensive differences between the original manufacturer's designs and the upfitter modifications to the fuel system would be required have not been observed. Therefore, the agency believes that all incomplete vehicles can comply with the same ORVR standards as complete vehicles with the addition of the same ORVR components on the incomplete vehicles as the complete version of the vehicle possesses.

The current practice of manufacturers of the original incomplete vehicles is to specify to the upfitter that modifications of the fuel system are not allowed by the upfitter. This is because the incomplete vehicle manufacturers are responsible for all current evaporative requirements (2-day, 3-day, running loss, spitback, etc.) and almost any modification could compromise compliance with those program standards. There is also an aspect of compliance with crash and safety requirements that prevent upfitters from making changes to the fuel system components. For these reasons, with rare exception, the fuel system design and installation is completed by the original vehicle manufacturer. The exception that the agency observed is that some incomplete vehicles do not have the filler tube permanently mounted to a body structure until the upfitter adds the finishing body hardware ( i.e., flatbed, box). In these cases, the upfitter is limited to only attaching the filler tube to their added structure but must maintain the original manufacturer designs that are certified to meet existing EPA evaporative emission standards.

Net emission impacts are expected to be small in the context of the entire inventory and were not estimated for the NPRM, but the VOC and air toxics reductions will be important in locations where these vehicles are commonly refueled.

i. Summary of Medium Duty Vehicle Refueling Emission Standards and Test Procedures

Compliance with evaporative and refueling emission standards is demonstrated at the vehicle level. The vehicle manufacturers produce MD spark-ignition (SI) complete vehicles and, in some instances, sell incomplete vehicles to secondary manufacturers. As noted in the following sections, we are proposing refueling emission standards for incomplete vehicles 8501 to 14,000 pounds GVWR. These proposed standards would apply over a useful life of 15 years or 150,000 miles, whichever occurs first, consistent with existing evaporative emission standards for these vehicles and for complete versions. No changes to evaporative and refueling emission standards for complete vehicles are being proposed by this rulemaking.

ii. Current Refueling Emission Standard and Test Procedures

Spark-ignition medium duty vehicles generally operate with volatile liquid fuel (such as gasoline or ethanol) or gaseous fuel (such as natural gas or LPG) that have the potential to release high levels of evaporative and refueling HC emissions. As a result, EPA has issued evaporative emission standards that apply to vehicles operated on these fuels. Refueling emissions are evaporative emissions that result when the pumped liquid fuel displaces the vapor in the vehicle tank. Without refueling emission controls, most of those vapors are released into the ambient air. The HC emissions emitted are a function of temperature and the Reid Vapor Pressure (RVP). The emissions control technology which collects and stores the vapor generated during refueling events is the Onboard Refueling Vapor Recovery (ORVR) system.

Light-duty vehicles and chassis-certified complete medium-duty vehicles that are 14,000 pounds GVWR and under have been meeting evaporative and refueling requirements for many years. ORVR requirements for light-duty vehicles started phasing in as part of EPA's National Low Emission Vehicle (NLEV) and Clean Fuel Vehicle (CFV) programs in 1998. In EPA's Tier 2 vehicle program, all complete vehicles with a GVWR of 8,501 to 14,000 pounds were required to phase-in ORVR requirements between 2004 and 2006 model years. In the Tier 3 rulemaking, all complete vehicles were required to meet a more-stringent standard of 0.20 grams of HC per gallon of gasoline dispensed by MY 2022 (see 40 CFR 86.1813–17(b)). The recent 2027 heavy duty final rule added refueling standards for incomplete heavy-duty vehicles over 14,000 pounds GVWR. This left incomplete medium duty SI engine powered vehicles 8,501 to 14,000 pounds GVWR as the only SI vehicles not required to meet refueling standards.

While the agency does not believe manufacturers of the very limited volumes of incomplete LD vehicles ( i.e., mainly some LD pick-ups for commercial customers who upfit application specific boxes and flatbeds) are currently “removing” any ORVR related hardware already required for the complete vehicle version like what has been observed in the MDV applications, and this proposal focuses on the known incomplete vehicles without ORVR in MDVs, the agency seeks comment on whether to extend this ORVR requirement to all incomplete LDVs and MDVs to prevent any future removal of ORVR from LDVs.

iii. Proposed ORVR HC Standard

We are proposing a refueling emission standard of 0.20 grams HC per gallon of dispensed fuel for incomplete vehicles 8,501 to 14,000 pounds GVWR (0.15 grams for gaseous-fueled vehicles), which is the same as the existing refueling standards for complete vehicles. We note that these proposed refueling emission standards would apply to all liquid-fueled and gaseous-fueled spark-ignition medium-duty vehicles, including gasoline and ethanol blends. We believe it is feasible for manufacturers to achieve these standards by adopting the technology in use on complete vehicles.

We are proposing to apply the refueling standards for new incomplete vehicles starting with model year 2030. This meets the statutory obligation to allow four years of lead time for new emissions standards for criteria pollutants for heavy-duty vehicles. This schedule also complements the alternative phase-in provisions adopted in our final rule setting these same standards for vehicles above 14,000 pounds GVWR (88 FR 4296, January 24, 2023). Those alternative phase-in provisions allowed for manufacturers to phase in certification of all their incomplete medium-duty and heavy-duty vehicles to the new standards from 2027 through 2030. This proposed rule provides a complete set of options for manufacturers. Specifically, manufacturers may certify incomplete heavy-duty vehicles above 14,000 pounds GVWR to the refueling standards in 2027 and incomplete medium-duty vehicles to the refueling standards in 2030. The second option is to meet the phase-in for the combined set of vehicles for 2027 through 2030.

We request comment on our proposed standards.

iv. Impact on Secondary Manufacturers

For incomplete vehicles 8,501 to 14,000 pounds GVWR, the chassis manufacturer performs the evaporative emissions testing and obtains the vehicle certificate from EPA. When the chassis manufacturer sells the incomplete vehicle to a secondary vehicle manufacturer, the chassis manufacturer provides specific instructions to the secondary manufacturer indicating what they must do to maintain the certified configuration, how to properly install components, and what, if any, modifications may be performed. For the evaporative emission system, a chassis manufacturer may require specific tube lengths and locations of certain hardware, and modifications to the fuel tank, fuel lines, evaporative canister, filler tube, gas cap and any other certified hardware would likely be limited.

We anticipate that the addition of any ORVR hardware and all ORVR-related aspects of the certified configuration would continue to be managed and controlled by the chassis manufacturer that holds the vehicle certificate. The engineering associated with all aspects of the fuel system design, which would include the ORVR system, is closely tied to the engine design, and the chassis manufacturer is the most qualified party to ensure its performance and compliance with applicable standards. Example fuel system changes the OEM may implement include larger canisters bracketed to the chassis frame close to the fuel tanks. Additional valves may be necessary to route the vapors to the canister(s) during refueling. Most other evaporative and fuel lines would remain in the same locations to meet existing evaporative requirements. There may be slightly different filler neck tube designs (smaller fuel transfer tube) as well as some additional tubes and valves to allow proper fuel nozzle turn-off (click off) at the pump, but this is not expected to include relocating the filler neck. Based on the comments received during the 2027 HD rule making that established refueling requirements for incomplete vehicles over 14,000 GVWR, we believe these changes would not adversely impact the secondary manufacturers finishing the vehicles.

The instructions provided by the chassis manufacturer to the secondary manufacturer to meet our proposed refueling standards should include new guidelines to maintain the certified ORVR configuration. We do not expect the new ORVR system to require significant changes to the vehicle build process, since chassis manufacturers would have a business incentive to ensure that the ORVR system integrates smoothly in a wide range of commercial vehicle bodies. Accordingly, we do not expect that addition of the ORVR hardware would result in any appreciable change in the secondary manufacturer's obligations or require secondary builders to perform significant modifications to their products.

v. Feasibility Analysis for the Proposed Refueling Emission Standards

This section describes the effectiveness and projected costs of the emissions technologies that we analyzed for our proposed refueling standards. Feasibility of the proposed refueling standard of 0.20 grams of HC per gallon is based on the widespread adoption of ORVR systems used in the light-duty and complete medium-duty vehicle sectors. As described in this section, we believe manufacturers can effectively use the same technologies already implemented in the complete medium-duty versions of the same vehicles to meet the proposed standard.

vi. Summary of Refueling Emission Technologies Considered

This section summarizes the specific technologies we considered as the basis for our analysis of the proposed refueling emission standards. The technologies presented in this section are described in greater detail in the DRIA.

Instead of releasing HC vapors into the ambient air, ORVR systems capture HC emissions during refueling events when liquid fuel displaces HC vapors present in the vehicle fuel tank as the tank is filled. These systems recover the HC vapors and store them for later purging from the system and use as fuel to operate the engine. An ORVR system consists of four main components that are incorporated into the existing fuel system: Filler pipe and seal, flow control valve, carbon canister, and purge system.

The filler pipe is the section of line from the fuel tank to where fuel enters the fuel system from the fuel nozzle. The filler pipe is typically sized to handle the maximum fill rate of liquid fuel allowed by law and integrates either a mechanical or liquid seal to prevent fuel vapors from exiting through the filler pipe to the atmosphere. The flow control valve senses that the fuel tank is getting filled and triggers a unique low-restriction flow path to the canister. The carbon canister is a container of activated charcoal designed to effectively capture and store fuel vapors. Carbon canisters are already a part of MD SI fuel systems to control evaporative emissions. Fuel systems with ORVR would require additional capacity, by increasing either the canister volume or the effectiveness of the carbon material. The purge system is an electro-mechanical valve used to redirect fuel vapors from the fuel tank and canister to the running engine where they are burned in the combustion chamber.

The fuel systems on 8,501 to 14,000 pounds GVWR incomplete heavy-duty vehicles are similar, if not identical to those on complete medium-duty vehicles that are currently subject to refueling standards. These incomplete vehicles may have slightly larger fuel tanks than most certified (complete) medium-duty vehicles and in some applications may have dual fuel tanks. These differences may necessitate greater ORVR system storage capacity and possibly some unique accommodations for dual tanks ( e.g., separate fuel filler locations), as commented by ORVR suppliers in response to the similar program in the HD 2027 ANPR.

vii. Projected Refueling Emission Technology Packages

The ORVR emission controls we projected in our feasibility analysis build upon four components currently installed on complete medium-duty vehicles 8,501 to 14,000 pounds GVWR to meet the Tier 3 evaporative emission standards: The carbon canister, flow control valves, filler pipe and seal, and the purge system. For our feasibility analysis, we assumed a 35-gallon fuel tank to represent an average tank size of medium-duty gasoline fueled vehicles 8,501 to 14,000 pounds GVWR. A summary of the projected technology updates and costs are presented in this section. See the DRIA for additional details.

In order to capture the vapor volume of fuel tanks during refueling, we project manufacturers would increase canister vapor or “working” capacity of their liquid-sealed canisters by 15 to 40 percent depending on the individual vehicle systems. If a manufacturer chooses to increase the canister volume using conventional carbon, we project a canister meeting Tier 3 evaporative emission requirements with approximately 2.5 liters of conventional carbon would need up to an additional 1 liters of carbon to capture refueling emissions from a 35-gallon fuel tank. A change in canister volume to accommodate additional carbon would result in increased costs for retooling and additional canister plastic, as well as design considerations to fit the larger canister on the vehicle. Alternatively, a manufacturer could choose to use the same size fuel tank and canister currently used to meet refueling requirements for complete medium duty vehicles to avoid the re-tooling costs. Another approach, based on discussions with canister and carbon manufacturers, could be for manufacturers to use a higher adsorption carbon and modify compartmentalization within the existing shell to increase the canister working capacity. We do not have data to estimate the performance or cost of higher adsorption carbon and so did not include this additional approach in our analysis.

The projected increase in canister volumes assumes manufacturers would use a liquid seal in the filler pipe, which is less effective than a mechanical seal. For a manufacturer that replaces their liquid seal with a mechanical seal, we assumed an approximate 20 percent reduction in the necessary canister volume. Despite the greater effectiveness of a mechanical seal, manufacturers in the past have not preferred this approach because it introduces another wearable part that can deteriorate, introduces safety concerns, and may require replacement during the useful life of the vehicle. To meet the proposed ORVR standards, manufacturers may choose the mechanical seal design to avoid retooling charges. We included this potential compliance approach in our cost analysis. We assumed a cost of $10.00 per seal for a manufacturer to convert from a liquid seal to a mechanical seal. We also analyzed costs based on the use of liquid seals, and we assumed zero cost in our analysis for manufacturers to maintain their current liquid seal approach for filler pipes already used in the complete medium-duty applications.

In order to manage the large volume of vapors during refueling, manufacturers' ORVR updates would include flow control valves integrated into the roll-over/vapor lines. We assumed manufacturers would, on average, install one flow control valve per vehicle that would cost $6.50 per valve. And lastly, we project manufacturers may need to update their purge strategy to account for the additional fuel vapors from refueling. Manufacturers may add hardware and optimize calibrations to ensure adequate purge in the time allotted over the preconditioning drive cycle of the demonstration test.

Table 51 presents the ORVR system specifications and assumptions used in our cost analysis, including key characteristics of the baseline incomplete vehicle's evaporative emission control system. Currently manufacturers may size the canisters of their Tier 3 evaporative emission control systems based on the diurnal 3-day test and the Bleed Emission Test Procedure (BETP). During the diurnal test, the canister is loaded with hydrocarbons over two or three days, allowing the hydrocarbons to load a conventional carbon canister (1,500 GWC, gasoline working capacity) at a 70 g/L effectiveness. In contrast, a refueling event takes place over a few minutes, and the ORVR directs the vapor from the gas tank onto the carbon in the canister at a canister loading effectiveness of 50 g/L. For our analysis, we added a design safety margin of 10 percent extra carbon to our ORVR systems. While less overall vapor mass may be vented into the canister from the fuel tank during a refueling event compared to the three-day diurnal test period, a higher amount of carbon is needed to contain the faster rate of vapor loaded at a lower efficiency during a refueling event. These factors were used to calculate the canister volumes for the two filler neck options in our cost analysis.

The ORVR components described in this section represent technologies that we think most manufacturers would choose to adopt to meet our proposed refueling requirements. It is possible that manufacturers may choose a different approach, or that unique fuel system characteristics may require additional hardware modifications not described here, but we do not have reason to believe costs would be significantly higher than presented in the following section. We request comment, including data, on our assumptions related to the increased canister working capacity demands, the appropriateness of our average fuel tank size, the technology costs for the specific ORVR components considered and any additional information that can improve our cost projections in the final rule analysis.

viii. Summary of Costs To Meet Proposed Refueling Emission Standards

Table 52 shows cost estimations for the different approaches evaluated. In calculating the overall cost of our proposed program, we used $19, the average of both approaches, to represent the cost for manufacturers to adopt the additional canister capacity and hardware to meet our proposed refueling emission standards for incomplete medium duty vehicles. See Section V of this preamble for a summary of our overall program cost and Chapter 3 of the DRIA for more details.

Incomplete vehicles may include dual fuel tanks, which may require some unique accommodations to adopt ORVR systems. A dual fuel tank chassis configuration would need separate canisters and separate filler pipes and seals for each fuel tank. Depending on the design, a dual fuel tank chassis configuration may require a separate purge valve for each fuel tank. We assume manufacturers would install one additional purge valve for dual fuel tank applications that also incorporate independent canisters for the second fuel tank/canister configuration and manufacturers adopting a mechanical seal in their filler pipe would install an anti-spitback valve for each filler pipe. See the DRIA for a summary of the design considerations for these fuel tank configurations. We did not include an estimate of the population or impact of dual fuel tank vehicles in our cost analysis of our proposed refueling emission standards because we believe that is a very rare option found on only one manufacturer's MY 2022 incomplete pickup model.

ix. Summary of Additional Program Considerations

We are requesting comment regarding the cost, feasibility, and appropriateness of our proposed refueling emission standard for incomplete light-duty trucks. While we do not believe that any significant volume of incomplete LD vehicles is produced, we request comment on extending this proposal to all incomplete vehicles. The proposed standard is based on the current refueling standard that applies to complete light-duty and medium-duty gasoline-fueled vehicles. We are proposing that compliance with these standards may be demonstrated under an existing regulatory provision allowing them to group incomplete vehicles with completes if they share identical evaporative emission hardware and meet other engineering and temperature profile requirements impacting evaporative emissions and durability.

EPA has identified a potential issue with Non-Integrated Refueling Canister Only Systems (NIRCOS) designed fuel vapor handling designs. During refueling events, because the sealed system may be under pressure and the pressure must be released before the fuel cap is removed, these NIRCOS systems initially release any tank vapors into the canister prior to the cap removal and the refueling event. These initial pressurized fuel vapors are not allowed to be simply vented through the gas cap and are therefore appropriately released into and absorbed by the carbon canister. However, the identified issue relates to the ORVR test procedure which does not account for this extra fuel vapor loading prior to the refueling event. The testing procedure for ORVR certification starts with a fully purged canister with no vapor loading from the release of the pressurized vapors prior to the cap removal that would likely occur in actual operation in the real world.

To address this limited issue, instead of a challenging change to the established ORVR test procedure, the agency is seeking comment for the need for an engineering requirement related to the canister working capacity that would provide an increase in the capacity in order to properly capture this initial pressurized vapor load and still have the needed capacity to handle the vapors generated during the refueling event. The agency requests comment on the need to address this limited issue.

EPA requests comment on the proposed evaporative emissions standards.

7. NMOG+NO_X Provisions Aligned With CARB ACC II Program

EPA proposes the adoption of three NMOG+NO_X provisions for light-duty vehicles (LDV, LDT, MDPV) aligned with the CARB ACC II program. Each provision addresses frequently encountered vehicle operating conditions that are not currently captured in EPA test procedures and produce significant criteria pollutant emissions. The operating conditions include high power cold starts in plug-in hybrid vehicles, early drive-away ( i.e., drive-away times shorter than in the FTP), and mid-temperature engine starts. EPA believes that the rationale and technical assessment performed by CARB applies not only for vehicles sold in California but for products sold across the country. EPA would require vehicle manufacturers to attest to meeting the three specific CARB ACC II program standards using CARB-defined test procedures. The proposed phase-in for the three CARB ACC II program provisions is the same as for other criteria emissions standards and is described in Section III.C.1.

i. PHEV High Power Cold Starts

The first provision addresses NMOG+NO_X emissions from PHEV high power cold starts (HPCS), which is when a driver demands more torque than the battery and electric motor can supply, and the ICE is started and immediately produces high torque while also working to light off the catalyst. NMOG+NO_X exhaust emissions for this provision are measured over the Cold Start US06 Charge-Depleting Emission Test, as described in, “California Test Procedures for 2026 and Subsequent Model Year Zero-Emission Vehicles and Plug-in Hybrid Electric Vehicles, in the Passenger Car, Light-Duty Truck and Medium-Duty Vehicle Classes.”

EPA's proposed bin-specific standards are shown in Table 53. The bins are slightly different than the ACC II bins. Specifically, EPA is not proposing Bin 125, Bin 25 or Bin 15, as found in CARB ACC II, and is instead proposing Bin 10. EPA is proposing Step 1 of this provision to start with MY 2027, one year later than CARB, and for Step 2 of the provision to start in MY 2029, which is the same as CARB.

For Step 1, PHEVs with Cold Start US06 all-electric range of at least 10 miles are exempt from the standard. For Step 2, PHEVs with Cold Start US06 all-electric range of at least 40 miles are exempt from the standard. CARB testing identified several existing PHEVs that started on the US06 and met the standard by a small margin.

EPA requests comment on Step 2 of the PHEV HPCS standard, specifically whether the Step 2 standard should (1) be finalized as proposed, (2) have a start date later than MY 2029, (3) have an alternative stringency, either for all light-duty vehicles or just for LDT3 and LDT4, or (4) should be removed, leaving Step 1 to apply indefinitely. EPA encourages commenters to provide underlying data to support their comments, particularly addressing any technical challenges regarding the lead time or feasibility of the Step 2 standard. EPA will consider the comments along with any additional available data in assessing the Step 2 standards for the final rule.

ii. Early Driveaway

EPA is proposing NMOG+NO_X emissions standards that address emissions from earlier gear engagement and drive-away described by the CARB ACC II program. In a regular 25 °C FTP, gear engagement happens at 15 seconds and driveaway happens at 20 seconds, but studies have shown many drivers begin driving earlier than this. Vehicle manufacturers have historically designed their aftertreatment systems and controls to meet emissions standards based on the timing of the FTP drive away. However, given the existing field data regarding the propensity of drivers to drive off sooner than the delay represented in the FTP and that vehicle manufacturers have demonstrated that they are able to address and reduce the emissions associated with this event, EPA feels it is appropriate to require vehicle manufacturers to meet this ACC II requirement.

EPA believes that CARB has properly captured early driveaway vehicle operation in the test procedures developed for ACC II. The bin-specific standards are shown in Table 54, which are congruent with those of the ACC II program. The bins are slightly different than the ACC II bins. Specifically, EPA is not proposing Bin 125, Bin 25 or Bin 15, as found in ACC II, and is instead proposing Bin 10.

Vehicles are exempt from the ACC II early driveaway bin standards if the vehicle prevents engine starting during the first 20 seconds of a cold-start FTP test interval and the vehicle does not use technology ( e.g., electrically heated catalyst) that would cause the engine or emission controls to be preconditioned such that NMOG+NO_X emissions would be higher during the first 505 seconds of the early driveaway emission test compared to the NMOG+NO_X emissions during the first 505 seconds of the standard FTP emission test.

iii. Intermediate Soak Mid-Temperature Starts

EPA also proposes to adopt a third provision defined by the CARB ACC II program that addresses NMOG+NO_X emissions from intermediate soak mid-temperature starts. Current EPA test procedures capture emissions from vehicle cold start and vehicle hot start. However, many vehicles in actual operation experience starts after an intermediate time ( i.e., soak times between 10 minutes and 12 hours). Vehicle manufacturers are not currently required to control the emissions associated with these mid-temperature starts to the same degree that they manage cold and hot starts.

Tier 3 vehicles achieve low start emissions when soak times are short because the engine and aftertreatment are still hot from prior operation. Start emissions after long soak periods are addressed by the 12+ hour soak of the 25 °C FTP, which requires vehicle calibrations to quickly heat the catalyst and sensors from an engine at ambient temperature. The mid-temperature intermediate soak provision addresses emissions from intermediate soak times where the engine and aftertreatment have cooled but may still be warmer than ambient temperature.

Vehicle manufacturers have demonstrated that they are able to address and reduce the emissions associated with this type of event, and EPA feels it is appropriate to require vehicle manufacturers to meet this requirement. EPA believes that CARB has properly captured the vehicle operation in the test procedures they developed for ACC II.

The bin-specific proposed standards shown in Table 55, are congruent with those of the ACC II program. The bins are slightly different than the ACC II bins. Specifically, EPA is not proposing Bin 125, Bin 25, or Bin 15, as found in ACC II, and is instead proposing Bin 10.

Manufacturers would need to submit data at each of the three standards: 9–11 minutes for the 10-minute requirement, 39–41 minutes for the 40-minute requirement, and 5–7 hours for the 3–12 hour requirement, and attest to meeting the standards at other soak times by linearly interpolating between 10 minutes and 40 minutes, and between 40 minutes and 12 hours. The proposed intermediate soak mid-temperature standards are shown in Table 55.

EPA recognized that requiring compliance to an emissions standard represented by a curve requires more testing effort than requiring compliance to a point standard and thus requests comment on whether to simplify the compliance requirements of this provision, in light of benefits and costs.

8. Elimination of Commanded Enrichment for Power or Component Protection

EPA is proposing to eliminate the allowance of the use of commanded enrichment as an AECD on SI engines used in light-duty vehicles and MDV for either power or component protection during normal operation and use. Normal operation is defined at 40 CFR 86.1803–01 to include vehicle speeds and grades of public roads, and vehicle loading and towing within manufacturer recommendations, even if the operation occurs infrequently. Commanded enrichment includes lean best torque enrichment.

Brief rich excursions are allowed during (1) engine start, (2) lambda dithering or slight lambda biasing to achieve optimal three-way catalyst (TWC) conversion efficiency of criteria emissions, (3) catalyst re-wetting after deceleration fuel cut off (DFCO), (4) brief lambda excursions during engine transients, (5) intrusive OBD monitoring of aftertreatment, evaporative canister purge valve, etc., and (6) in vehicle “limp-home” operation where the malfunction indicator light (MIL, commonly known as the “check engine light”) or other warning systems are triggered.

Most current vehicles incorporate AECDs that utilize enrichment ( i.e., commanding air/fuel ratio less than the stoichiometric air/fuel ratio) for the purpose of protecting components in the exhaust system from thermal damage during normal operation and use. Some vehicles incorporate similar strategies for the purpose of increasing the power output of the engine. Such strategies significantly reduce the effectiveness of the aftertreatment system.

Technologies exist that can prevent thermal damage of engine and/or exhaust system components without the use of enrichment during normal operation and use (see DRIA Chapter 3 for technology discussion). Modern vehicles have sufficient power without the use of enrichment. The use of enrichment only has the potential to incrementally increase power but significantly reduces the effectiveness of the catalytic aftertreatment system, resulting in a ten-fold or greater increase of CO and HC emissions.

EPA requests comment on the proposed prohibition of commanded enrichment as an AECD, including analyses of benefits and costs, and additional exceptions where brief rich operation should be allowed.

9. Averaging, Banking, and Trading Provisions

Section III.B.4 describes averaging, banking, and trading (ABT) credit provisions included in the proposed GHG program and the basis for providing them. ABT provisions are also included in the proposed criteria pollutant program for NMOG+NO_X standards. ABT has a long history for both light duty and heavy duty vehicles and EPA is not reopening or soliciting comment on the basic structure of the ABT program for criteria pollutants or GHG.

As introduced in Sections III.C.1 and III.C.2, EPA is proposing to allow light-duty vehicle (LDV, LDT, MDPV) 25 °C FTP NMOG+NO_X credits to be transferred into the proposed program up to the end of the Tier 3 five-year credit life. Light-duty vehicle −7 °C FTP NMHC credits may also be transferred into the proposed program on a 1:1 basis for −7 °C FTP NMOG+NO_X credits up to the end of the five-year credit life. EPA is proposing to consider −7 °C FTP NMHC credits to be equal in value and freely exchangeable with the credits corresponding to the proposed −7 °C FTP NMOG+NO_X standards.

EPA proposes that MDV (Class 2b and 3 vehicles) 25 °C FTP NMOG+NO_X credits may only be transferred into the proposed program if a manufacturer selects the early compliance schedule for MDV. If so, these MDV credits may be transferred into the program up to the end of the Tier 3 five-year credit life. There were no −7 °C FTP NMHC or NMOG+NO_X standards for MDV in Tier 3 so there are no MDV −7 °C FTP credits to transfer.

New credits may be generated, banked, and traded within the new program to provide manufacturers with flexibilities in developing compliance strategies.

D. Proposed Modifications to the Medium-Duty Passenger Vehicle Definition

In EPA's 2000 Tier 2 criteria pollutant rule, EPA established a new medium-duty passenger vehicle (MDPV) regulatory classification to bring passenger vehicles over 8,500 pounds GVWR into the Tier 2 program. EPA created the MDPV classification under the Tier 2 program because the agency determined that a portion of the MDV fleet was predominantly being utilized as passenger vehicles instead of being used for “work,” for example, to transport goods or pull trailers. These larger vehicles were driven in the same way as passenger vehicles, despite the fact their weight threshold put them in the HD category, and from an emissions control standpoint we found it was feasible for these vehicles to meet the same set of emissions standards as other passenger vehicles. The MDPV definition was focused primarily on the largest SUVs and passenger vans above 8,500 pounds GVWR. These vehicles would have otherwise remained subject to less stringent heavy-duty vehicle standards. When EPA established its GHG standards in 2010, EPA included MDPVs in the light-duty vehicle GHG program as well. Essentially, MDPVs are heavy-duty vehicles that are included in light-duty vehicle programs.

As we did in the Tier 2 rule, we are once again cognizant of potential market changes that could move passenger vehicles out of the LD regulatory class, and we have examined changes to the MDPV definition to avoid this situation. For example, the new GM Hummer pickup and SUVs are over 10,000 pounds GVWR due to battery weight but do not have significant work capabilities ( e.g., towing and hauling), as measured by the work factor, relative to other vehicles in the MDV category. EPA is proposing two modifications to the MDPV definition starting in MY 2027 to address passenger vehicles that could potentially fall outside the current definition. First, EPA is proposing to include in the MDPV definition any passenger vehicles at or below 14,000 pounds GVWR with a work factor at or below 5,000 pounds except for pickups with an open bed interior length of eight feet or larger which would continue to be excluded from the MDPV category. This modification would address new BEVs that are primarily passenger vehicles but fall above the current 10,000 pound MDPV threshold primarily due to battery pack weight increasing the vehicle's GVWR. EPA believes these vehicles should be in the light-duty vehicle program because they are passenger vehicles and would likely displace the purchase of other passenger vehicles rather than a heavy-duty vehicle due to their relatively low utility. In selecting the proposed 5,000-pound work factor cut point, EPA reviewed current vehicle offerings and does not believe this threshold would pull into the MDPV category a significant number of work vans or trucks. EPA requests comment on this approach for addressing heavy passenger vehicles as well as other approaches that might more effectively capture these types of new vehicles.

Currently, the MDPV category generally includes pickups below 10,000 pounds GVWR with an open cargo bed length of less than six feet (72.0 inches). The second proposed MDPV definition modification is to include in the MDPV category any pickups with a GVWR below 9,900 pounds and an interior bed length less than eight feet regardless of whether the vehicle work factor is above 5,000 pounds. Pickups at or above 9,900 pounds up to 14,000 pounds GVWR with a work factor above 5,000 pounds would be included as MDPVs only if their interior bed length is less than six feet.

Currently, there is a clear distinction between pickups in the light-duty vehicle category and those in the medium-duty category. Light-duty pickups are those pickups with a GVWR at or below 8,500 pounds and they currently generally have a GVWR below 8,000 pounds. MD pickups are those pickups that are at or above 8,501 pounds and all such vehicles currently have a GVWR above 9,900 pounds. The proposed changes to the MDPV definition are intended to account for any new pickup offerings that would fall into the GVWR “space” at or above 8,501 pounds but below 9,900 pounds. EPA is not aware of any current or planned products that would be covered by this proposed modification. However, EPA is concerned that differences between the light-duty and medium-duty pickups could become blurred if manufacturers were to offer somewhat more capable pickups with GVWR just above 8,500 pounds. Manufacturers could in essence move their light-duty pickups up into the medium-duty category through relatively minor vehicle modifications. EPA believes it is appropriate to address this possibility given that the light-duty vehicle footprint standards, as proposed, would be more stringent compared to the proposed work factor-based standards for MDVs and could provide an unintended incentive for manufacturers to take such an approach. EPA requests comment on this proposed change in the MDPV category.

Table 56 summarizes the MDPV proposal in terms of what vehicles would not be covered as MDPVs under EPA's proposed changes to the qualifying criteria.

Finally, EPA is also clarifying that MDPVs will include only vehicles with seating behind the driver's seat such that vehicles like cargo vans and regular cab pickups with no rear seating would remain in the MDV category and subject to work factor-based standards regardless of the proposed changes to the MDPV definition. Also, pickups with 8-foot beds would continue to be excluded from the MDPV category under all circumstances. Prior to MY 2027, EPA proposes that a manufacturer may optionally place vehicles that are brought into the MDPV category by the proposed MDPV definition revisions into the light-duty vehicles program rather than the MDV program. Due to lead time concerns, EPA is proposing that the changes would be mandatory starting in MY 2027. In addition, for the proposed Tier 4 criteria pollutant standards discussed in Section III.C, manufacturers opting for the Tier 4 full lead time optional standards would not be required to include vehicles meeting the revised MDPV definition in their Tier 4 fleet calculations until their fleet is fully covered by the Tier 4 standards to ensure the program would be compliant with applicable CAA lead time requirements. In the meantime, manufacturers would continue to certify those vehicles to the Tier 3 standards for heavy-duty vehicles in 40 CFR 86.1816–18. EPA requests comment on its proposed revisions to the MDPV category including timing of implementation.

Historically, consumers without the need for the additional utility offered by medium-duty pickups have sound reasons for buying the light-duty versions. Medium-duty versions compared to their light-duty counterparts tend to be higher priced, less fuel efficient, less maneuverable, and may also have a harsher ride when unloaded due to heavier suspensions. However, EPA recognizes that there is the possibility that the pickup market could shift from light-duty versions to medium-duty versions of pickups due to consumer preference changes, but also due to manufacturer changes to vehicle designs and pricing and marketing strategies. At this time, EPA is not proposing to fundamentally change its program to pull a large portion of medium-duty pickups into the light-duty program to address this possibility due to the potential disruption such an approach would have both for the vehicle industry and for consumers needing highly capable work vehicles. EPA plans to monitor vehicle market trends over the next several years to identify any new trends that could potentially lead to the loss of emissions reductions, and if so, to explore appropriate ways to address such a situation. EPA is requesting comment on the potential likelihood of this type of market shift from the light- to the medium-duty sector, and potential ways to address the issue if needed in a future rulemaking.

EPA performed a study to assess the GHG increases of a medium duty pickup compared to a similar sized light-duty pickup when they are operated similarly as primarily unloaded vehicles transporting just the operator and also if they are lightly loaded with 1/2 the payload capacity. This comparison reflects the issue that medium-duty pickups have certain heavier duty design aspects (frames, axles, brakes, transmissions, etc.) intended for trailer towing work that negatively impact GHG emissions when they are only operated with lighter loads similar to the expected operation from a light-duty pickup.

Figure 18 summarizes the chassis test data for the F150 and the F250, each tested in its original configuration and alternative configuration (as a 2b for the F150, and as a 2a for the F250). The F250 with the 7.3L engine, tested at curb+300 pounds. ETW, emitted 172 g/mi more than the F150. Similarly, the F250 emitted 170 g/mi more than the F150 with both tested at ALVW.

The GHG emission difference observed in the data indicates that light to medium load operation results in much higher CO₂ emissions in the medium-duty pickup under similar passenger or payload conditions. The medium-duty pickup is designed primarily for regular towing and therefore may have higher emissions under other operating conditions compared to light-duty pickups designed more for transportation of passengers or cargo in the bed.

E. What alternatives did EPA consider?

EPA is seeking comment on three alternatives to its proposed light-duty GHG standards. Alternative 1 is more stringent than the proposal across the MY 2027–2032 time period, and Alternative 2 is less stringent. The proposal as well as Alternatives 1 and 2 all have a similar proportional ramp rates of year over year stringency, which includes a higher rate of stringency increase in the earlier years (MYs 2027–2029) than in the later years. Alternative 3 achieves the same stringency as the proposed standards in MY 2032 but provides for a more consistent rate of stringency increase for MY 2027–2031.

In selecting the stringencies for the alternatives, EPA assessed a range available technologies (including the costs and pace of deployment) along with the resulting emissions reductions associated with each alternative. Each of the stringency alternatives are supported by a set of feasible technologies. The Alternative 1 projected fleet-wide CO₂ targets are 10 g/mi lower on average than the proposed targets; Alternative 2 projected fleet-wide CO₂ targets averaged 10 g/mi higher than the proposed targets. While the 20 g/mi range of stringency options may appear fairly narrow, for the MY 2032 standards the alternatives capture a range of 12 percent higher and lower than the proposed standards in the final year. Our goal in selecting the alternatives was to identify a range of stringencies that we believe are appropriate to consider for the final standards because they represent a range of standards that are anticipated to be feasible and are highly protective of human health and the environment.

While the proposed standards, Alternative 1 and Alternative 2 are all characterized by larger increases in stringency between in the earlier years than in the later years, Alternative 3 was constructed with the goal of evaluating roughly equal reductions in absolute g/mi targets over the duration of the program while achieving the same overall targets as the proposed standards by MY 2032. This has the effect of less stringent year-over-year increases in the early years of the program.

As noted elsewhere in this preamble, EPA may choose to update its modeling for the final rulemaking, e.g., by updating inputs for costs to reflect newly available information or to incorporate PHEV technology as outlined in the DRIA while considering information and views provided by stakeholders in public comments. Thus, we recognize that our cost estimates and assessments of feasibility may change, and EPA is soliciting comment on all of the model year standards of Alternatives 1, 2, and 3, and standards generally represented by the range across those alternatives. EPA anticipates that the appropriate choice of final standards within this range will reflect the Administrator's judgments about the uncertainties in EPA's analyses as well as consideration of public comment and updated information where available. However, EPA proposes to find that standards substantially more stringent than Alternative 1 would not be appropriate because of uncertainties concerning the cost and feasibility of such standards. EPA proposes to find that standards substantially less stringent than Alternative 2 would not be appropriate because they would forgo feasible emissions reductions that would improve the protection of public health and welfare.

Table 57 and Table 58 give the details for the car and truck curves for Alternative 1, and Table 59 and Table 60 give details for Alternative 2. Table 61 and Table 62 provide details for Alternative 3 for cars and trucks.