On May 7th, NHTSA and EPA jointly published in the Federal Register a Final Rule [RIN 2060-AP58 & RIN 2127-AK50] which contained requirements for a National Plan on Corporate Average Fuel Economy (CAFE) and Greenhouse Gas Emissions (GHG). This joint final rule is consistent with the National Fuel Efficiency Policy announced by President Obama last year on May 19th, 2009.
These new regulations apply to passenger cars, light-duty trucks and medium-duty vehicles covering model years 2012 through 2016. Both NHTSA and EPA say that this will allow manufacturers to build a single light-duty national fleet that satisfies all requirements under both programs. These final rules become effective on July 6th, which is sixty days after the publication date in the Federal Register. This National Regulatory Plan makes it possible for the regulation of two different Federal Agencies together with the state of California (and other states that accept the California program) to act in a unified fashion.
The NHTSA and EPA have jointly developed attribute based curves that each agency is using to describe its final regulations. These attribute based curves make use of the vehicle footprint as one of the inputs in the algorithm describing the requirements for a given model year. The footprint is described as "wheelbase" times "track width" to arrive at a given vehicle requirement for CAFE and for GHG emissions.
SUMMARY OF RULEMAKING:
Summary of the Fuel Economy Regulations
The table below indicates the new NHTSA CAFE regulations for 2012 through 2016. These CAFE requirements represent a 4.3 percent average annual rate of increase relative to the MY 2011 regulations.
| Average Required Fuel Economy (mpg) under Final CAFE Requirements | ||||||
| 2011 Base | 2012 | 2013 | 2014 | 2015 | 2016 | |
| Pass Cars | 30.4 | 33.3 | 34.2 | 34.9 | 36.2 | 37.8 |
| Lt Trucks | 24.4 | 25.4 | 26.0 | 26.6 | 27.5 | 34.1 |
| Combined | 27.6 | 29.7 | 30.5 | 31.3 | 32.6 | 34.1 |
Summary of the Greenhouse Gas Regulations:
The table below estimates the EPA CO2 regulations for 2012 through 2016 as follows:
| Fleet-Wide Compliance Levels under EPA CO2 Regulations (g/mi) | |||||
| 2012 | 2013 | 2014 | 2015 | 2016 | |
| Pass Cars | 263 | 256 | 247 | 236 | 225 |
| Lt Trucks | 346 | 337 | 326 | 312 | 298 |
| Combined | 295 | 286 | 276 | 263 | 250 |
RULEMAKING FLEXIBILITIES:
CO2 CAFE Credits
Under this NHTSA and the EPA final rule, the fleet average standards that apply to a manufacturer's car and truck fleets are based on the applicable footprint-based curves. At the end of each model year, when production of the model year is complete, a production-weighted fleet average will be calculated for each averaging set of cars and trucks. A manufacturer's car and/or truck fleet that achieves a fleet average CO2/CAFE level better than the standard"s requirements can generate credits. A manufacturer would have several options for using those credits, including credit carry-back, credit carry-forward, credit transfers and credit trading. Conversely, if the fleet average levels do not meet the standard, the fleet would incur debits or a shortfall.
Air-Conditioning Credits
A/C systems can contribute either directly or indirectly to GHG emissions. HFC refrigerants can leak from A/C systems generating direct GHG emissions. Or, A/C systems place additional loading on the engine generating additional CO2 tailpipe emissions. EPA is allowing manufacturers to generate credits by reducing either or both types of GHG emissions related to A/C systems.
Flexible-Fuel and Alternative Fuel Vehicle Credits
For the CAFE program, NHTSA will continue to allow the use of FFV credits for the purposes of compliance with the CAFE standards until the end of the EISA phase-out period.
For the GHG program, EPA will allow FFV credits, but only during the period from MYs 2012 to 2015. After that time period, the manufacturer will have to demonstrate that the alternative fuel is actually being used and also based on the vehicle's actual performance.
Temporary Lead-Time Allowance
EPA is allowing a temporary lead-time allowance for manufacturers that sell vehicles in the USA in MY 2009 and for which USA vehicle sales in the model year are below 400,000 vehicles. This allowance will be available only during the MY 2012 - 2015 phase-in years of the program. A manufacturer that satisfies the threshold criteria will be able to treat a limited number of vehicles as a separate averaging fleet, which will be subject to a less stringent GHG standard.
Additional Credit Opportunities
EPA is establishing additional opportunities for early credits in MYs 2009 - 2011 through over-compliance with a baseline standard set to be equivalent to the California standards. These credits can be generated in one of two ways:
- Over compliance with the fleet of vehicles sold in California and the states adopting the California program, or
- Over compliance with the fleet of vehicles sold in the 50 states.
EPA is also allowing early credits based on over-compliance with CAFE, but only for vehicles sold in states outside of both California and those states adopting the California program.
EPA is also providing additional temporary incentives to encourage the commercialization of advanced GHG/Fuel Economy control technologies, including electric vehicles, plug-in hybrid electric vehicles and fuel cell vehicles for MYs 2012 through 2016.
EPA is also providing an option for manufacturers to generate credits for employing new and innovative technologies that achieve GHG reductions that are not reflected on current test procedures, e.g. solar panels on hybrids, adaptive cruise control and active aerodynamics.
NHTSA and EPA estimate that the average cost increase for a model year 2016 vehicle will be less than $1000 over a similar 2011 model and that this cost should be recoverable within 3 years.
NHTSA and EPA do not anticipate significant noncompliance under this National Program. However, failure to meet the fleet average standards after credit opportunities are exhausted would result in the potential for penalties.