The Environmental Protection Agency (EPA) Proposed New Rule to Revise 2023 and Later Model Year Light-Duty Vehicle Greenhouse Gas (GHG) Emissions Standards

The Environmental Protection Agency (EPA) issued proposed rulemaking in the August 10, 2021 Federal Register (F.R. Vol. 86 No. 16582); EPA 40 CFR Parts 86 and 600 (EPA-HQ-OAR-2021-0208; FRL 8469-02-OAR). On January 20, 2021, President Biden issued Executive Order 13990 "Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis"directing EPA to consider whether to propose suspending, revising, or rescinding the standards. "The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks"promulgated in April 2020 significantly weakened the standards established in 2012.

This EPA proposal is to revise the GHG standards to be more stringent than the SAFE rule standards for model years 2023 through 2026. EPA is also proposing to include several flexibilities to incentivise the production and sale of vehicles with zero and near-zero emissions technology. These actions are to reduce compliance costs and to address the lead time of the proposed standards.

The standards being revised would result in significant benefits for public health and welfare, primarily through substantial reductions in both GHG emissions and fuel consumption. The EPA indicated that associated fuel costs paid by drivers, and the benefits of the proposed standards would be far in excess of costs.

The EPA indicated that the list below is not intended to be exhaustive, but provides a guide regarding entities likely to be regulated by this action. Read carefully to determine if your activity will be affected. For clarification and additional questions, contact the person listed in "FOR FURTHER INFORMATION CONTACT".

Items for comment in this proposal include, but are not limited to:

Executive Summary

• Purpose and Legal Authority:

1. Near-Term Standards Through Model Year 2026
2. Why proposed standards are appropriate with California Clean Act (CAA)
3. Future Longer-Term Action to Further Reduce Emissions 2027 and Beyond

• Summary of Proposed Light-Vehicle Light-Duty Vehicle GHG Program:

1. Proposed Revised GHG Emissions Standards
2. Proposed Compliance Incentives and Flexibilities

• Analytical Support for the Proposed Revised Standards:

1. Summary of Analyses
2. History of Similar Analyses

• Summary of Costs and Benefits
• How EPA considered environmental justice
• Affordability and Equity
• Alternatives EPA considered:

1. Description of the Alternatives
2. Summary of Costs and Benefits of the Alternatives
3. Summary of the Proposal's Costs and Benefits Compared to Alternatives

EPA Proposal for MY 2023-2026 Light-Duty Vehicle GHG Standards

• Proposed Model Year 2023-2026 GHG Standards for Light-Duty Vehicles, Light-Duty Trucks, and Medium Duty Passenger Vehicles:

1. What fleet-wide emissions levels correspond to the CO2 standards
2. What are the proposed CO2 attribute-based standards
3. EPA's Statutory Authority Under the CAA
4. Averaging, Banking, and Trading Provisions for CO2
5. Certification, Compliance, and Enforcement
6. On-Board Diagnostics Program Updates
7. Stakeholder Engagement
8. How do EPA's proposed standards relate to NHTSA's CAFE proposal and to California's GHG program

• Additional Manufacturer Compliance Flexibilities:

1. Multiplier Incentives for Advanced Technology Vehicles
2. Advanced Technology Incentives for Full-Size Pickups
3. Off-Cycle Technology Credits
4. Air Conditioning System Credits
5. Natural Gas Vehicles Technical Correction

• What alternatives is EPA considering

Technical Assessment of the Proposed CO2 Standards

• What approach did EPA use in analyzing potential standards
• Projected Compliance Costs and Technology Penetrations:

1. GHG Targets and Compliance Levels
2. Projected Compliance Costs per Vehicle
3. Technology Penetration Rates

• Are the proposed standards feasible
• How did EPA consider the two alternatives in choosing the proposed program

How would this proposal reduce GHG emissions and associated effects

• Impact on GHG Emissions
• Climate Change Impacts from GHG Emissions
• Global Climate Impacts and Benefits Associated with the Proposal's GHG Emissions Reductions

How would the proposal impact non-GHG emissions and the associated effects

• Impact on Non-GHG Emissions
• Health and Environmental Effects Associated with Exposure to Non-GHG Pollutants Impacted by the Proposed Standards
• Air Quality Impacts of Non-GHG Pollutants

Basis for the Proposed GHG Standards Under CAA Section 202(a)

• Consideration of Technological Feasibility and Lead Time:

1. Technological Readiness of the Auto Industry in Meeting Revised GHG Standards
2. Opportunities Provided Through Credits and Incentives Provisions

• Consideration of Vehicle Costs of Compliance
• Consideration of Impacts on Consumers
• Consideration of Emissions of GHGs and Other Air Pollutants
• Consideration of Energy, Safety and Other Factors
• Balancing of Factors Under CAA 202(a)

What are the estimated cost, economic, and other impacts of this proposal

• Conceptual Framework for Evaluating Consumer Impacts
• Vehicle Sales Impacts
• Changes in Fuel Consumption
• Greenhouse Gas Emission Reduction Benefits
• Non-Greenhouse Gas Health Impacts
• Energy Security Impacts
• Impacts of Additional Driving
• Safety Considerations in Establishing GHG Standards
• Summary of Costs and Benefits
• Impacts on Consumers of Vehicle Costs and Fuel Savings
• Employment Impacts
• Environmental Justice:

1. GHG Impacts
2. Non-GHG Impacts

• Affordability and Equity Impacts

Statutory and Executive Order Reviews

• Executive Order 12866: "Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review"
• Paperwork Reduction Act
• Regulatory Flexibility Act
• Unfunded Mandates Reform Act
• Executive Order 13132: "Federalism"
• Executive Order 13175: "Consultation and Coordination With Indian Tribal Governments"
• Executive Order 13045: "Protection of Children From Environmental Health Risks and Safety Risks"
• Executive Order 13211: "Energy Effects"
• National Technology Transfer and Advancement Act
• Executive Order 12898:"Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations"

The EPA scheduled a public hearing prior to the comment due date of September 27, 2021.

The proposal is available on InterRegs.NET for our US Federal subscribers and is also available at www.selectregs.com.