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Notice2023-07184

California State Motor Vehicle and Engine Pollution Control Standards; Heavy-Duty Vehicle and Engine Emission Warranty and Maintenance Provisions; Advanced Clean Trucks; Zero Emission Airport Shuttle; Zero-Emission Power Train Certification; Waiver of Preemption; Notice of Decision

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Published

April 6, 2023

Issuing agencies

Environmental Protection Agency

Abstract

The Environmental Protection Agency (EPA) is granting the California Air Resources Board's (CARB's) requests for waivers of Clean Air Act (CAA) preemption for the following California regulations: the Heavy-Duty Vehicle and Engine Emission Warranty Regulations and Maintenance Provisions, the Advanced Clean Trucks Regulation, the Zero Emission Airport Shuttle Regulation, and the Zero-Emission Power Train Certification Regulation. EPA is issuing these decisions under the authority of CAA section 209.

Full Text

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[Federal Register Volume 88, Number 66 (Thursday, April 6, 2023)]
[Notices]
[Pages 20688-20726]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-07184]

[[Page 20687]]

Vol. 88

Thursday,

No. 66

April 6, 2023

Part III

Environmental Protection Agency

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California State Motor Vehicle and Engine Pollution Control Standards;
Heavy-Duty Vehicle and Engine Emission Warranty and Maintenance
Provisions; Advanced Clean Trucks; Zero Emission Airport Shuttle; Zero-
Emission Power Train Certification; Waiver of Preemption; Notice of
Decision; Notice

Federal Register / Vol. 88, No. 66 / Thursday, April 6, 2023 /
Notices

[[Page 20688]]

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2022-0330, EPA-HQ-OAR-2022-0331; FRL-9900-02-OAR]

California State Motor Vehicle and Engine Pollution Control
Standards; Heavy-Duty Vehicle and Engine Emission Warranty and
Maintenance Provisions; Advanced Clean Trucks; Zero Emission Airport
Shuttle; Zero-Emission Power Train Certification; Waiver of Preemption;
Notice of Decision

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of decision.

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SUMMARY: The Environmental Protection Agency (EPA) is granting the
California Air Resources Board's (CARB's) requests for waivers of Clean
Air Act (CAA) preemption for the following California regulations: the
Heavy-Duty Vehicle and Engine Emission Warranty Regulations and
Maintenance Provisions, the Advanced Clean Trucks Regulation, the Zero
Emission Airport Shuttle Regulation, and the Zero-Emission Power Train
Certification Regulation. EPA is issuing these decisions under the
authority of CAA section 209.

DATES: Petitions for review must be filed by June 5, 2023.

ADDRESSES: EPA has established dockets for these requests under Docket
ID EPA-HQ-OAR-2022-0330 and EPA-HQ-OAR-2022-0331. All documents relied
upon in making these decisions, including those submitted to EPA by
CARB, are contained in the public dockets. Publicly available docket
materials are available electronically through <a href="http://www.regulations.gov">www.regulations.gov</a>.
After opening the <a href="http://www.regulations.gov">www.regulations.gov</a> website, enter EPA-HQ-OAR-2022-
0330 or EPA-HQ-OAR-2022-0331 in the ``Enter Keyword or ID'' fill-in box
to view documents in the record. Although a part of the official
docket, Confidential Business Information (CBI) or other information
whose disclosure is restricted by statute is not included in the public
dockets. EPA's Office of Transportation and Air Quality (OTAQ)
maintains a web page that contains general information on its review of
California waiver and authorization requests. Included on that page are
links to prior waiver and authorization Federal Register notices, some
of which are cited in this notice; the page can be accessed at <a href="https://www.epa.gov/state-and-localtransportation/vehicle-emissionscalifornia-waivers-and-authorizations">https://www.epa.gov/state-and-localtransportation/vehicle-emissionscalifornia-waivers-and-authorizations</a>.

FOR FURTHER INFORMATION CONTACT: David Dickinson, Office of
Transportation and Air Quality, U.S. Environmental Protection Agency,
1200 Pennsylvania Ave NW. Telephone: (202) 343-9256. Email:
<a href="/cdn-cgi/l/email-protection#612508020a080f120e0f4f2500170805210411004f060e17"><span class="__cf_email__" data-cfemail="23674a40484a4d504c4d0d6742554a47634653420d444c55">[email&#160;protected]</span></a>; or Kayla Steinberg, Office of Transportation
and Air Quality, U.S. Environmental Protection Agency, 1200
Pennsylvania Ave. NW. Telephone: (202) 564-7658. Email:
<a href="/cdn-cgi/l/email-protection#075473626e6965627560294c667e6b664762776629606871"><span class="__cf_email__" data-cfemail="e6b592838f8884839481c8ad879f8a87a6839687c8818990">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
A. EPA's Consideration of CARB's Request
1. 2018 HD Warranty Amendments
2. ACT, ZEAS, and ZEP Certification Regulations
B. Principles Governing This Review
1. Scope of Preemption and Waiver Criteria Under the Clean Air
Act
2. Deference to California
3. Standard and Burden of Proof
III. Discussion
A. Evaluation of CARB's 2018 HD Warranty Amendments
B. First Waiver Criterion: are California's Protectiveness
Determinations arbitrary and capricious?
1. EPA's Historical Interpretation of Section 209(b)(1)(A)
2. CARB's Discussion of California's Protectiveness
Determinations in the Waiver Requests
a. 2018 HD Warranty Amendments
b. ACT, ZEAS, and ZEP Certification Regulations
3. Comments on California's Protectiveness Determinations
4. California's Protectiveness Determinations Are Not Arbitrary
and Capricious
5. Section 209(b)(1)(A) Conclusion
C. Second Waiver Criterion: does California need its standards
to meet compelling and extraordinary conditions?
1. EPA's Historical Interpretation of Section 209(b)(1)(B)
2. CARB's Discussion of California's Need for the Standards in
the Waiver Requests
a. 2018 HD Warranty Amendments
b. ACT, ZEAS, and ZEP Certification Regulations
3. Comments on Section 209(b)(1)(B)
4. California Needs Its Standards To Meet Compelling and
Extraordinary Conditions
5. Section 209(b)(1)(B) Conclusion
D. Third Waiver Criterion: are California's regulations
consistent with Section 202(a) of the Clean Air Act?
1. EPA's Historical Interpretation of Section 209(b)(1)(C)
2. CARB's Discussion of the Regulations' Consistency with
Section 202(a) in the Waiver Requests
a. 2018 HD Warranty Amendments
b. ACT, ZEAS, and ZEP Certification Regulations
3. Comments on Section 209(b)(1)(C)
4. California's Standards Are Consistent With Section 202(a)
Under EPA's Historical Approach
a. 2018 HD Warranty Amendments
b. ACT, ZEAS, and ZEP Certification Regulations
5. The Inapplicability of Section 202(a)(3)(C) to the Third
Prong
a. EPA's Historical Practice Is Supported by the Text, Context,
and Purpose of the Statute
b. Neither AMC v. Blum nor the 1994 MDV Waiver Dictate a
Contrary Interpretation
6. Section 209(b)(1)(C) Conclusion
E. Other Issues
1. Energy Policy and Conservation Act (EPCA)
2. Equal Sovereignty and Other Constitutional Issues
IV. Decision
A. Judicial Review
V. Statutory and Executive Order Reviews

I. Executive Summary

Today, as Administrator of the EPA, I am granting two separate
requests for waivers of Clean Air Act (CAA) preemption regarding four
California Air Resources Board (CARB) regulations for heavy-duty
(``HD'') onroad vehicles and engines. CARB made these requests in two
separate letters to EPA in October 2021 and December 2021, as described
below. EPA is not taking action on CARB's January 2022 request
concerning CARB's Omnibus Low NO<INF>X</INF> regulation.\1\ EPA will
announce its decision regarding the Omnibus Low NO<INF>X</INF>
Regulation waiver request in the future, by separate notice in the
Federal Register.
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\1\ Omnibus Low NO<INF>X</INF> Waiver Request, Docket No. EPA-
HQ-OAR-2022-0332-0012; Omnibus Low NO<INF>X</INF> Waiver Support
Document, Docket No. EPA-HQ-OAR-2022-0332-0009.
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First, by letter dated October 22, 2021, CARB notified EPA that it
had finalized amendments to its emission standards and associated test
procedures for heavy-duty diesel vehicles and engines.\2\ These ``2018
HD Warranty Amendments,'' adopted by the CARB Board on June 28, 2018,
extend the emissions warranty periods for 2022 and subsequent model
year onroad heavy-duty diesel engines and for 2022 and subsequent model
year diesel vehicles with a gross vehicle weight rating exceeding
14,000 pounds powered by such engines.\3\ In its letter to the
Administrator, CARB requested that EPA determine the 2018 HD Warranty
Amendments to be within the

[[Page 20689]]

scope of a waiver the Administrator previously granted for California's
emission standards and associated test procedures for 2007 and
subsequent model year heavy-duty diesel vehicles and engines or,
alternatively, that EPA grant California a new waiver of preemption for
the amendments. By today's decision EPA finds that 2018 HD Warranty
Amendments meet the criteria for a new waiver under section 209(b) of
the Clean Air Act (CAA), 42 U.S.C. 7543(b).
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\2\ 2018 HD Warranty Amendments Waiver Request, Docket No. EPA-
HQ-OAR-2022-0330-0007; 2018 HD Warranty Amendments Waiver Support
Document, Docket No. EPA-HQ-OAR-2022-0330-0004.
\3\ The 2018 HD Warranty Amendments are comprised of amendments
to title 13, California Code of Regulations, sections 1956.8, 2035,
2036, and 2040.
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Second, CARB's December 20, 2021, letter to the Administrator
notified EPA that the CARB Board had finalized Advanced Clean Trucks
(ACT), Zero Emission Airport Shuttle Bus (ZEAS), and Zero Emission
Powertrain (ZEP) Certification Regulations.\4\ The ACT Regulation,
adopted by the CARB Board on January 26, 2021, requires that
manufacturers produce and sell increasing percentages of medium- and
heavy-duty zero-emission vehicles (ZEVs) and near zero-emission
vehicles (NZEVs) in California. These quantities of vehicles are based
on increasingly higher percentages of manufacturers' annual sales of
onroad heavy-duty vehicles, beginning in the 2024 model year. The ZEAS
Regulation, adopted by the CARB Board on June 27, 2019, establishes
steadily increasing zero-emission airport shuttle fleet composition
requirements for airport shuttle fleet owners who service the thirteen
largest California airports. The ZEP Certification Regulation, adopted
by the CARB Board on June 27, 2019, establishes certification
requirements and optional emission standards for 2021 and subsequent
model year medium- and heavy-duty ZEVs and the zero-emission
powertrains installed in such vehicles.\5\ CARB requested that EPA
grant a new waiver for each of these regulations. By today's decision
EPA finds that each of these three regulations meets the criteria for a
new waiver under section 209(b).
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\4\ ACT/ZEAS/ZEP Waiver Request, Docket No. EPA-HQ-OAR-2022-
0331-0004; ACT/ZEAS/ZEP Waiver Support Document, Docket No. EPA-HQ-
OAR-2022-0331-0003.
\5\ The ACT Regulation is at title 13, California Code of
Regulation, sections 1963, and 1963.1 through 1963.5. The ZEAS
Regulation is at title 17, California Code of Regulation, sections
95690.1, 95690.2, 95690.3, 95690.4, 95690.5, 95690.6, 95690.7, and
95690.8. The ZEP Certification Regulation is at title 13, California
Code of Regulation, sections section 1956.8 and title 17, section
95663.
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The legal framework for these decisions stems from the waiver
provision first adopted by Congress in 1967, and later amended in 1977
(and amended again, as explained below, in 1990 when preemption of
nonroad engine and vehicle emissions standards was addressed). In
sections 209(a) and 209(b) of the Clean Air Act, Congress established
that there would be only two programs for control of emissions from new
motor vehicles--EPA emission standards adopted under the Clean Air Act,
and California emission standards adopted under state law. Congress
accomplished this by preempting all State and local governments from
adopting or attempting to enforce emission standards for new motor
vehicles, while at the same time providing that California could
receive a waiver of preemption for its emission standards and
accompanying enforcement procedures. Other states can only adopt
standards that are identical to California's standards. This statutory
scheme struck an important balance that protected manufacturers from
multiple and different state emission standards, while preserving
California's pivotal role as a laboratory for innovation in the control
of emissions from new motor vehicles. Congress recognized that
California could serve as a pioneer and a laboratory for the nation in
setting new motor vehicle emission standards and the development of new
emission control technologies.
Further, Congress intentionally structured this waiver provision to
restrict and limit EPA's ability to deny a waiver. The provision was
designed to ensure California's broad discretion to determine the best
means to protect the health and welfare of its citizens. Section 209(b)
specifies that EPA must grant California a waiver if California
determines that its standards are, in the aggregate, at least as
protective of the public health and welfare as applicable Federal
standards. EPA may deny a waiver only if it makes at least one of three
findings specified under the Clean Air Act. The findings that permit
EPA to deny a waiver (also referred to as the three waiver prongs) are:
first, a finding that California's determination that its standards
are, in the aggregate, at least as protective as applicable Federal
standards is arbitrary and capricious (section 209(b)(1)(A), or the
first waiver prong); second, a finding that California has no need for
such standards to meet compelling and extraordinary conditions (section
209(b)(1)(B), or the second waiver prong); or third, a finding that
California's standards and accompanying enforcement procedures are
inconsistent with section 202(a) of the Clean Air Act (section
209(b)(1)(C), or the third waiver prong).
Therefore, EPA's role upon receiving a request for waiver of
preemption from California is narrow and limited to determining whether
it is appropriate to make any of the three findings specified by the
Clean Air Act. If the Agency cannot make at least one of the three
findings, then the waiver must be granted.\6\ The courts have
emphasized the narrowness of EPA's review. In MEMA II the Court of
Appeals for the District of Columbia Circuit stated that ``[S]ection
209(b) sets forth the only waiver standards with which California must
comply.'' \7\ EPA and the Court of Appeals for the District of Columbia
Circuit have consistently interpreted section 209(b) as placing the
burden on the opponents of a waiver to demonstrate that one of the
criteria for a denial has been met.\8\
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\6\ Motor and Equipment Manufacturers' Association v. EPA (MEMA
II), 142 F.3d 449, 462-63 (D.C. Cir. 1998).
\7\ Id. (``If EPA concludes that California's standards pass
this test, it is obligated to approve California's waiver
application.'').
\8\ Motor and Equipment Manufacturers' Association v. EPA (MEMA
I), 627 F.2d 1095, 1121 (D.C. Cir. 1979).
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If California acts to amend a previously waived standard or
accompanying enforcement procedure, the amendment may be considered
within the scope of a previously granted waiver provided that it does
not undermine California's determination that its standards in the
aggregate are as protective of public health and welfare as applicable
Federal standards, does not affect the regulation's consistency with
section 202(a) of the Clean Air Act, and raises no new issues affecting
EPA's previous waiver decisions.\9\
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\9\ 45 FR 54130 (Aug. 14, 1980); 46 FR 36742 (July 15, 1981); 75
FR 44948, 444951 (July 30, 2010).
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In 1990, Congress also established that there would be only two
programs for control of emissions from most nonroad vehicles and
engines--EPA emission standards adopted under the Clean Air Act, and
California emission standards adopted under state law.
In section 209(e)(1) of the Act, Congress preempted all states, or
political subdivisions thereof, from adopting or attempting to enforce
any standard or other requirement relating to the control of emissions
for certain types of new nonroad engines or vehicles.\10\ For all other
nonroad engines, states, with the exception of California, are
generally preempted from adopting and enforcing standards and

[[Page 20690]]

other requirements relating to the control of emissions.\11\
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\10\ States are expressly preempted from adopting or attempting
to enforce any standard or other requirement relating to the control
of emissions from new nonroad engines which are used in construction
equipment or vehicles or used in farm equipment or vehicles, and
which are smaller than 175 horsepower. Such express preemption under
section 209(e)(1) of the Act also applies to new locomotives or new
engines used in locomotives. CAA section 209(e)(1), 42 U.S.C.
7543(e)(1)(A).
\11\ Section 209(e)(2)(A) requires the Administrator to
authorize California to adopt and enforce standards and other
requirements relating to the control of emissions from such vehicles
or engines under criteria similar to section 209(b) for new motor
vehicles and engines. Considering the nearly identical language in
both sections 209(b) and 209(e)(2)(A), EPA has reviewed California's
requests for authorization of nonroad vehicle or engine standards
under section 209(e)(2)(A) using the same principles that it has
historically applied in reviewing requests for waivers of preemption
for new motor vehicle or new motor vehicle engine standards under
section 209(b).This means that CARB's nonroad standards must be
consistent with the technological feasibility requirements of
section 202(a)(2). See 80 FR 76169, 76170 (Dec. 9, 2015). See Engine
Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1087 (D.C. Cir. 1996) (``. . . EPA
was within the bounds of permissible construction in analogizing
section 209(e) on nonroad sources to section 209(a) on motor
vehicles.''). This historical approach to nonroad authorizations is
not being revisited here.
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On June 13, 2022, EPA issued three notices of opportunity for
hearing and comment for the California regulations at issue here: the
first notice covered the Heavy-Duty Vehicle and Engine Emission
Warranty and Maintenance Provisions; the second notice covered the
Advanced Clean Trucks Regulation, the Zero Emission Airport Shuttle
Regulation, and the Zero-Emission Power Train Certification Regulation;
and the third notice covered the ``Omnibus'' Low NO<INF>X</INF>
Regulation.\12\ EPA is only taking action on the first two notices in
this decision.
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\12\ 87 FR 35760 (June 13, 2022); 87 FR 35765 (June 13, 2022);
and 87 FR 35768 (June 13, 2022).
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As part of EPA's public comment process for CARB's waiver requests,
we have received comments from several states and organizations
representing states, health and environmental organizations, industry,
and other stakeholders. The vast majority of comments EPA received
supported granting the waiver requests. Commenters generally supporting
the waiver requests included CARB,\13\ environmental and public health
organizations,\14\ state and local governments,\15\ states'
organizations,\16\ members of Congress,\17\ and some auto
manufacturers.\18\ Commenters generally opposing the waiver requests
included the Truck and Engine Manufacturers Association (EMA),\19\ the
National Automobile Dealers Association (NADA),\20\ the American Fuel &
Petrochemical Manufacturers (AFPM),\21\ the American Trucking
Associations (ATA),\22\ the Western States Petroleum Association,\23\
and the Texas Public Policy Foundation.\24\ EPA has considered all
comments including those submitted after the close of the comment
period. After an evaluation of the record and comments, I have
determined that the waiver opponents have not met their burden of proof
in order for EPA to deny either of the two CARB waiver requests under
any of the three waiver prongs set forth in section 209(b)(1). As such,
EPA is granting CARB's two waiver requests.\25\
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\13\ CARB Initial 2018 HD Warranty Amendments Comments, Docket
No. EPA-HQ-OAR-2022-0330-0063; CARB Initial ACT Comments, Docket No.
EPA-HQ-OAR-2022-0331-0127; CARB Supplemental Comments, Docket Nos.
EPA-HQ-OAR-2022-0330-0072, EPA-HQ-OAR-2022-0331-0133.
\14\ Environmental and Public Health Organizations, Docket Nos.
EPA-HQ-OAR-2022-0330-0066, EPA-HQ-OAR-2022-0331-0099; Health and
Medical Organizations, Docket No. EPA-HQ-OAR-2022-0331-0057.
\15\ See, e.g., State of California et al, Docket No. EPA-HQ-
OAR-2022-0331-0092 (including comments submitted on behalf of the
States of California, Colorado, Connecticut, Delaware, Hawaii,
Illinois, Maryland, Minnesota, New Jersey, New York, Oregon, Rhode
Island, Vermont, Washington, Wisconsin, the Commonwealth of
Massachusetts, the District of Columbia, and the City of New York);
New York State Department of Environmental Conservation (NYSDEC),
Docket Nos. EPA-HQ-OAR-2022-0330-0061, EPA-HQ-OAR-2022-0331-0103;
Maine Department of Environmental Protection (Maine), Docket Nos.
EPA-HQ-OAR-2022-0330-0034, EPA-HQ-OAR-2022-0331-0074; Colorado
Energy Office (Colorado), Docket No. EPA-HQ-OAR-2022-0331-0034;
Washington State Department of Ecology (Washington), Docket Nos.
EPA-HQ-OAR-2022-0330-0056, EPA-HQ-OAR-2022-0331-0079; South Coast
Air Quality Management District (SCAQMD), Docket No. EPA-HQ-OAR-
2022-0331-0075; San Joaquin Valley Unified Air Pollution Control
District (SJVUAPCD), Docket Nos. EPA-HQ-OAR-2022-0330-0055, EPA-HQ-
OAR-2022-0331-0106.
\16\ See, e.g., Northeast States for Coordinated Air Use
Management (NESCAUM), Docket Nos. EPA-HQ-OAR-2022-0330-0017, EPA-HQ-
OAR-2022-0330-0053, EPA-HQ-OAR-2022-0330-0074, EPA-HQ-OAR-2022-0331-
0104, EPA-HQ-OAR-2022-0331-0135, ; National Association of Clean Air
Agencies (NACAA), Docket Nos. EPA-HQ-OAR-2022-0330-0035, EPA-HQ-OAR-
2022-0330-0019, EPA-HQ-OAR-2022-0331-0067, EPA-HQ-OAR-2022-0331-
0029; Ozone Transport Commission (OTC), Docket Nos. EPA-HQ-OAR-2022-
0330-0062, EPA-HQ-OAR-2022-0330-0021, EPA-HQ-OAR-2022-0330-0075,
EPA-HQ-OAR-2022-0331-0105, EPA-HQ-OAR-2022-0331-0033, EPA-HQ-OAR-
2022-0331-0136.
\17\ Padilla et al, Docket Nos. EPA-HQ-OAR-2022-0330-0025, EPA-
HQ-OAR-2022-0331-0038.
\18\ Tesla, Docket No. EPA-HQ-OAR-2022-0330-0038, EPA-HQ-OAR-
2022-0331-0060; Rivian, Docket No. EPA-HQ-OAR-2022-0331-0066.
\19\ EMA Testimony, Docket Nos. EPA-HQ-OAR-2022-0330-0016, EPA-
HQ-OAR-2022-0331-0026; EMA Initial Comments, Docket Nos. EPA-HQ-OAR-
2022-0330-0032, EPA-HQ-OAR-2022-0331-0071; EMA Supplemental
Comments, Docket Nos. EPA-HQ-OAR-2022-0330-0071, EPA-HQ-OAR-2022-
0331-0132,
\20\ NADA, Docket Nos. EPA-HQ-OAR-2022-0330-0050, EPA-HQ-OAR-
2022-0331-0090.
\21\ AFPM, Docket No. EPA-HQ-OAR-2022-0331-0088.
\22\ ATA, Docket No. EPA-HQ-OAR-2022-0331-0091.
\23\ Western States Petroleum Association, Docket No. EPA-HQ-
OAR-2022-0331-0109.
\24\ Texas Public Policy Foundation, Docket No. EPA-HQ-OAR-2022-
0330-0036, EPA-HQ-OAR-2022-0331-0059.
\25\ In deciding to grant these waiver requests, EPA is relying
on its legal interpretation of the statute as explained in this
notice. In each case, EPA believes that its interpretation
constitutes the best interpretation of the statute, applying
traditional principles of statutory interpretation. Further, to the
extent there is any genuine ambiguity within the statute related to
these interpretations, EPA believes it has reasonably resolved such
ambiguity. See Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 866
(1984) (deference is owed to reasonable agency resolutions of
statutory ambiguity).
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II. Background

A. EPA's Consideration of CARB's Request

On June 13, 2022, EPA announced the opportunity for hearing and
comment on CARB's waiver requests in three Federal Register notices (FR
Notices).\26\ EPA held one public hearing on June 29 and June 30, 2022,
covering all three FR Notices.\27\ As noted above, EPA's decision here
pertains only to the 2018 HD Warranty Amendments, the ACT Regulation,
the ZEAS Regulation, and the ZEP Certification Regulation. EPA has
considered all comments submitted pertaining to these regulations,
including those submitted after the close of the comment period.\28\
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\26\ 87 FR 35760 (June 13, 2022); 87 FR 35765 (June 13, 2022);
and 87 FR 35768 (June 13, 2022).
\27\ A transcript for each day of the hearing (June 29th and
30th, 2022) can be found in each docket. June 29th Hearing
Transcript, Docket Nos. EPA-HQ-OAR-2022-0330-0028 and EPA-HQ-OAR-
2022-0331-0045, June 30th Hearing Transcript, Docket Nos. EPA-HQ-
OAR-2022-0330-0029 and EPA-HQ-OAR-2022-0331-0044.
\28\ EMA Supplemental Comments, Docket Nos. EPA-HQ-OAR-2022-
0330-0071, EPA-HQ-OAR-2022-0331-0132; CARB Supplemental Comments,
Docket Nos. EPA-HQ-OAR-2022-0330-0072, EPA-HQ-OAR-2022-0331-0133;
Mass Comment Campaign sponsored by Union of Concerned Scientists,
Docket Nos. EPA-HQ-OAR-2022-0330-0073, EPA-HQ-OAR-2022-0331-0134;
NESCAUM, Docket Nos. EPA-HQ-OAR-2022-0330-0074, EPA-HQ-OAR-2022-
0331-0135; OTC, Docket Nos. EPA-HQ-OAR-2022-0330-0075, EPA-HQ-OAR-
2022-0331-0136; Mid-Atlantic/Northeast Visibility Union (MANEVU),
Docket Nos. EPA-HQ-OAR-2022-0330-0076, EPA-HQ-OAR-2022-0330-0077,
EPA-HQ-OAR-2022-0331-0138, EPA-HQ-OAR-2022-0331-0137.
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1. 2018 HD Warranty Amendments
EPA's June 2022 FR Notice on CARB's waiver request regarding the
2018 HD Warranty Amendments asked for comment on several matters. Since
CARB had submitted a within-the-scope request, EPA first invited
comment on whether those amendments meet the criteria for EPA to
confirm that they are

[[Page 20691]]

within the scope of prior waivers. Specifically, we requested comment
on whether California's 2018 HD Warranty Amendments: (1) Undermine
California's previous determination that its standards, in the
aggregate, are at least as protective of public health and welfare as
comparable Federal standards, (2) affect the consistency of
California's requirements with section 202(a) of the Act, and (3) raise
any other ``new issue'' affecting EPA's previous waiver or
authorization determinations.\29\
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\29\ 87 FR at 35762.
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EPA also solicited comment on whether it should grant a new waiver
for the 2018 HD Warranty Amendments in the event that EPA cannot
confirm that some or all of those amendments were within the scope of
previous waivers. We therefore asked commenters to consider the three
prongs for the denial of a waiver request under section 209(b)(1) of
the CAA: whether (A) California's determination that its motor vehicle
emission standards are, in the aggregate, at least as protective of
public health and welfare as applicable Federal standards is arbitrary
and capricious, (B) California does not need such standards to meet
compelling and extraordinary conditions, and (C) California's standards
and accompanying enforcement procedures are inconsistent with section
202(a) of the Clean Air Act.\30\
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\30\ Id.
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Regarding section 209(b)(1)'s second prong, EPA must grant a waiver
request unless the Agency finds that California ``does not need such
State standards to meet compelling and extraordinary conditions.'' EPA
has interpreted the phrase ``need[s] such State standards to meet
compelling and extraordinary conditions'' to mean that California needs
a separate motor vehicle program as a whole in order to address
compelling and extraordinary conditions in California (also known as
the ``traditional'' interpretation). EPA noted its intention to use the
traditional interpretation and sought comment on whether California
needs the 2018 HD Warranty Amendments under section 209(b)(1)(B).\31\
---------------------------------------------------------------------------

\31\ Id. at 35762-63.
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With regard to section 209(b)(1)'s third prong, EPA has
historically considered consistency with section 202(a) to require that
California's standards are technologically feasible within the lead
time provided, giving due consideration to costs, and that California
and applicable Federal test procedures are consistent. EPA requested
comment on what provisions from section 202(a) apply to California due
to the reference to section 202(a) in section 209(b)(1)(C). EPA invited
comment on how such provisions, to the extent they may apply to
California's standards or enforcement procedures, should be considered
in the context of EPA's evaluation of CARB's waiver request under the
third prong.\32\
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\32\ Id.
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2. ACT, ZEAS, and ZEP Certification Regulations
EPA's June 2022 FR Notice on CARB's waiver request regarding the
Advanced Clean Truck Regulation (ACT), the Zero Emission Airport
Shuttle (ZEAS) Regulation, and the Zero-Emission Power Train (ZEP)
Certification Regulation asked for comment on several matters. We
requested comment on all aspects of a full waiver analysis applicable
to each of the three regulations. Therefore, we asked commenters to
consider the three waiver prongs under section 209(b)(1) of the CAA.
EPA also noted its intention to use the traditional interpretation of
section 209(b)(1)(B) and sought comment on whether California needs the
ACT, ZEAS, and ZEP Certification Regulations, as well what provisions
under section 202(a) should apply (and how such provisions should be
evaluated) under section 209(b)(1)(C), which requires consistency with
section 202(a).\33\
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\33\ 87 FR 35768, 35770 (June 13, 2022).
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B. Principles Governing this Review

The CAA has been a paradigmatic example of cooperative federalism,
under which ``States and the Federal Government [are] partners in the
struggle against air pollution.'' \34\ In Title II, Congress authorized
EPA to promulgate emission standards for mobile sources and generally
preempted states from adopting their own standards.\35\ At the same
time, Congress created an important exception for the State of
California.
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\34\ General Motors Corp. v. United States, 496 U.S. 530, 532
(1990).
\35\ ``The regulatory difference [between Titles I and II] is
explained in part by the difficulty of subjecting motor vehicles,
which readily move across state boundaries, to control by individual
states.'' Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1079 (D.C. Cir.
1996). Congress also asserted federal control in this area to avoid
``the specter of an anarchic patchwork of federal and state
regulatory programs'' nationwide. See MEMA I, 627 F.2d 1095, 1109
(D.C. Cir. 1979).
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1. Scope of Preemption and Waiver Criteria Under the Clean Air Act
The legal framework that governs today's decisions stems from the
waiver provision first adopted by Congress in 1967 and its subsequent
amendments.\36\ In title II of the CAA, Congress established only two
programs for control of emissions from new motor vehicles--EPA emission
standards adopted under the CAA and California emission standards
adopted under its state law.\37\ Congress accomplished this by
preempting all state and local governments from adopting or enforcing
emission standards for new motor vehicles, while at the same time
providing that California could receive a waiver of preemption for its
emission standards and enforcement procedures in keeping with its prior
experience regulating motor vehicles, its role as a laboratory for
innovation in emission reduction technologies for vehicles, and its
serious air quality problems. This framework struck an important
balance that protected manufacturers from multiple and different state
emission standards and preserved a pivotal role for California in the
advancement of control of emissions from new motor vehicles.
Recognizing both the harsh reality of California's air pollution and
California's ability to serve as a pioneer and a laboratory for the
nation in setting new motor vehicle emission standards and developing
control technology, Congress intentionally structured this waiver
provision to restrict and limit EPA's ability to deny a waiver to
ensure that California had broad discretion in selecting the best means
to protect the health and welfare of its citizens.\38\
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\36\ Central Valley Chrysler-Jeep, Inc. v. Goldstene, 529 F.
Supp. 2d 1151, 1174 (``The waiver provision of the Clean Air Act
recognizes that California has exercised its police power to
regulate pollution emissions from motor vehicles since before March
30, 1966; a date that predates . . . the Clean Air Act.'').
\37\ Motor vehicles are ``either `federal cars' designed to meet
the EPA's standards or `California cars' designed to meet
California's standards.'' Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075,
1079-80, 1088 (D.C. Cir. 1996) (``Rather than being faced with 51
different standards, as they had feared, or with only one, as they
had sought, manufacturers must cope with two regulatory
standards.'').
\38\ See, e.g., S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967)
(The waiver of preemption is for California's ``unique problems and
pioneering efforts.''); 113 Cong. Rec. 30950, 32478 (``[T]he State
will act as a testing agent for various types of controls and the
country as a whole will be the beneficiary of this research.'')
(Statement of Sen. Murphy); MEMA I, 627 F.2d 1095, 1111 (D.C. Cir.
1979).
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Accordingly, section 209(a) preempts states or political
subdivisions from adopting or attempting to enforce any standard
relating to the control of emissions from new motor vehicles or new
motor vehicle engines.\39\ Under the

[[Page 20692]]

terms of section 209(b)(1), after notice and opportunity for public
hearing, EPA must waive the application of section 209(a) to California
unless the Administrator finds that at least one of three criteria to
deny a waiver in section 209(b)(1)(A)-(C) has been met.\40\ EPA may
thus deny a waiver, in the context of the Agency's adjudicatory review,
only if it makes at least one of these three factual findings
(associated with the three waiver criteria) based on evidence in the
record, including arguments that opponents of the waiver have provided.
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\39\ 42 U.S.C. 7543(a)-(a) Prohibition No State or any political
subdivision thereof shall adopt or attempt to enforce any standard
relating to the control of emissions from new motor vehicles or new
motor vehicle engines subject to this part. No State shall require
certification, inspection, or any other approval relating to the
control of emissions from any new motor vehicle or new motor vehicle
engine as condition precedent to the initial retail sale, titling
(if any), or registration of such motor vehicle, motor vehicle
engine, or equipment.
\40\ 42 U.S.C. 7543(b)(1): (1) The Administrator shall, after
notice and opportunity for public hearing, waive application of this
section to any State which has adopted standards (other than
crankcase emission standards) for the control of emissions from new
motor vehicles or new motor vehicle engines prior to March 30, 1966,
if the State determines that the State standards will be, in the
aggregate, at least as protective of public health and welfare as
applicable Federal standards. No such waiver shall be granted if the
Administrator finds that--(A) the determination of the State is
arbitrary and capricious, (B) such State does not need such State
standards to meet compelling and extraordinary conditions, or (C)
such State standards and accompanying enforcement procedures are not
consistent with section 7521(a) of this title.
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The 1970 CAA Amendments strengthened EPA's authority to regulate
vehicular ``emission[s] of any air pollutant,'' while reaffirming the
corresponding breadth of California's ability to regulate those
emissions (by amending CAA section 202 and recodifying the waiver
provision as section 209(b), respectively).\41\ Congress also
established the National Ambient Air Quality Standards (NAAQS) program,
under which EPA issues air quality criteria and sets ambient air
quality standards for so-called ``criteria'' pollutants, and states
with regions that have levels of pollutants greater than those Federal
standards must submit state implementation plans, or SIPs, indicating
how they plan to attain the NAAQS. These attainment SIPs are often
multi-year, comprehensive plans.
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\41\ In the 1970 Amendments, section 202(a) was divided into
section 202(a)(1) and section 202(a)(2). Section 202(a)(1) included
the directive for the Administrator to ``prescribe standards
applicable to emissions of any air pollutant . . . which in his
judgement cause, or contribute to, air pollution which may
reasonably be anticipated to endanger publish health or welfare.''
The previous lead time requirement in section 202(a) was moved to
section 202(a)(2) and included the directive that any regulation
prescribed under 202(a)(1) ``shall 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.'' The
1970 CAA did not change the cross reference to section 202(a) in
section 209(b)(1)(C). See CARB Initial ACT/ZEAS/ZEP Comments at 11-
12. As described below, the 1977 Amendments did not change the cross
reference to section 202(a) in section 209(b)(1)(C) but did expand
the flexibility afforded to California under section 209(b). The
1977 Amendments also added section 202(a)(3) directing EPA to set
heavy-duty vehicle emission standards for certain emissions for the
1983 model year and later. (Congress having identified a need for
standards in 1970 ``had become impatient with the EPA's failure to
promulgate a particulate standard'' for heavy duty vehicles.'' NRDC,
655 F.2d at 325 (citing S. Rep. No.127, 95th Cong., 1st Sess. 67
(1977), reprinted in 3 Legislative History 1441)).
---------------------------------------------------------------------------

With the CAA Amendments of 1977, Congress allowed California to
consider the protectiveness of its standards ``in the aggregate,''
rather than requiring each California standard to be as or more
stringent than its Federal counterpart, to enable stronger standards
for a specific pollutant where a weaker standard for a second pollutant
was necessary due to interactions between control technologies.\42\
Congress also approved EPA's interpretation of the waiver provision as
providing appropriate deference to California's policy goals and
consistent with Congress's intent ``to permit California to proceed
with its own regulatory program'' for new motor vehicle emissions.\43\
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\42\ 42 U.S.C. 7543(b)(1). In further amendments to the Act in
1977, section 209 (formerly section 208) was amended to require the
U.S. Environmental Protection Agency (EPA) to consider California's
standards as a whole, so that California could seek a waiver from
preemption if its standards ``in the aggregate'' protected public
health at least as well as Federal standards. See Clean Air Act
Amendments of 1977, Pub. L. 95-95, section 207, 91 Stat. 685. See
also Motor Vehicle Mfrs. Ass'n of U.S., Inc. v. New York State Dep't
of Env't Conservation, 17 F.3d 521, 525 (2d Cir. 1994).
\43\ H.R. Rep. No. 95-294, at 301 (1977).
---------------------------------------------------------------------------

In addition, the 1977 Amendments demonstrated the significance of
California's standards to the Nation as a whole with Congress' adoption
of a new section 177. Section 177 permits other states addressing their
own air pollution problems to adopt and enforce California new motor
vehicle standards ``for which a waiver has been granted'' if certain
criteria are met.\44\
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\44\ This provision was intended to continue the balance,
carefully drawn in 1967, between states' need to meet increasingly
stringent federal air pollution limits and the burden of compliance
on auto-manufacturers. See, e.g., H.R. Rep. No. 294, 95th Cong., 1st
Sess. 309-10 (1977) (``[S]ection 221 of the bill broadens State
authority, so that a State other than California . . . is authorized
to adopt and enforce new motor vehicle emission standards which are
identical to California's standards. Here again, however, strict
limits are applied . . . . This new State authority should not place
an undue burden on vehicle manufacturers . . . .''); Motor Vehicle
Mfrs. Ass'n v. NYS Dep't of Env't Conservation, 17 F.3d 521, 527 (2d
Cir. 1994) (``Many states, including New York, are in danger of not
meeting increasingly stringent federal air pollution limits . . . .
It was in an effort to assist those states struggling to meet
federal pollution standards that Congress, as noted earlier,
directed in 1977 that other states could promulgate regulations
requiring vehicles sold in their state to be in compliance with
California's emission standards or to `piggyback' onto California's
preemption exemption. This opt-in authority, set forth in section
177 of the Act, 42 U.S.C. 7507, is carefully circumscribed to avoid
placing an undue burden on the automobile manufacturing industry.'')
---------------------------------------------------------------------------

Any state with qualifying SIP provisions may exercise this option
and become a ``section 177 State,'' without first seeking the approval
from EPA.\45\ Thus, the 1977 Amendments further recognize California's
important role in mobile source air pollution control, both by making
it easier for California to obtain waivers (by allowing the State's
protectiveness determination to be made ``in the aggregate'') and by
expanding the opportunity (via section 177) for other states to adopt
California's standards.
---------------------------------------------------------------------------

\45\ CAA section 177, 42 U.S.C. 7507.
---------------------------------------------------------------------------

Given the text, legislative history, and judicial precedent, EPA
has consistently interpreted section 209(b) as requiring EPA to grant a
waiver unless EPA or opponents of a waiver can demonstrate that one of
the criteria for a denial has been met.\46\ In this context, since
inception, EPA has recognized its limited discretion in reviewing
California waiver requests. Therefore, EPA's role upon receiving a
request for waiver of preemption from California has consistently been
limited and remains only to be to determine whether it is appropriate
to make any of the three factual findings specified by the CAA. If the
Agency cannot make at least one of the three findings, then the waiver
must be granted. The three waiver criteria are properly seen as
criteria for a denial. This reversal of the normal statutory structure
embodies and is consistent with the congressional intent of providing
deference to California to maintain and further develop its own new
motor vehicle emission program.
---------------------------------------------------------------------------

\46\ MEMA I, 627 F.2d at 1120-21 (``The language of the statute
and its legislative history indicate that California's regulations,
and California's determination that they comply with the statute,
when presented to the Administrator are presumed to satisfy the
waiver requirements and that the burden of proving otherwise is on
whoever attacks them.''); MEMA II, 142 F.3d 449, 462 (D.C. Cir.
1998) (``[S]ection 209(b) sets forth the only waiver standards with
which California must comply. . . . If EPA concludes that
California's standards pass this test, it is obligated to approve
California's waiver application.'').
---------------------------------------------------------------------------

Additionally, in previous waiver decisions, EPA has noted that
section 209(b)(1) specifies particular and limited grounds for
rejecting a waiver and has therefore limited its review to

[[Page 20693]]

those grounds.\47\ EPA has also noted that the structure Congress
established for reviewing California's standards is deliberately
narrow, which further supports this approach. This has led EPA to
reject arguments that are not specified in the statute as grounds for
denying a waiver:
---------------------------------------------------------------------------

\47\ See, e.g., 78 FR 2112 (January 9, 2013); 87 FR 14332 (March
14, 2022) (SAFE 1 Reconsideration Decision).

The law makes it clear that the waiver requests cannot be denied
unless the specific findings designated in the statute can properly
be made. The issue of whether a proposed California requirement is
likely to result in only marginal improvement in air quality not
commensurate with its cost or is otherwise an arguably unwise
exercise of regulatory power is not legally pertinent to my decision
under section 209, so long as the California requirement is
consistent with section 202(a) and is more stringent than applicable
Federal requirements in the sense that it may result in some further
reduction in air pollution in California. Thus, my consideration of
all the evidence submitted concerning a waiver decision is
circumscribed by its relevance to those questions that I may
consider under section 209(b).\48\
---------------------------------------------------------------------------

\48\ 78 FR at 2115 (footnote omitted).

EPA's evaluation of accompanying enforcement procedures that are
identified in section 209(b)(1)(C) is done by assessing the first and
third waivers prongs at 209(b)(1)(A) and 209(b)(1)(C).\49\
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\49\ 87 FR 35760, 35762-63 (June 13, 2022).
---------------------------------------------------------------------------

2. Deference to California
EPA has also consistently noted that the text, structure, and
history of the California waiver provision clearly indicate both
congressional intent and appropriate EPA practice of leaving decisions
on ``ambiguous and controversial matters of public policy'' to
California's judgment.\50\ In waiver decisions, EPA has thus recognized
that congressional intent in limiting review of California waiver
requests to the section 209(b)(1) criteria was to ensure that the
Federal government did not second-guess the wisdom of state policy.\51\
In an early waiver decision EPA highlighted this deference:
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\50\ 40 FR 23102, 23103-04 (May 28, 1975); see also LEV I, 58 FR
4166 (January 13, 1993), Decision Document at 64.
\51\ Ford Motor Co. v. Environmental Protection Agency (Ford
Motor), 606 F.2d 1293, 1302 (D.C. Cir. 1979) (``The Administrator is
charged with undertaking a single review in which he applies the
deferential standards set forth in Section 209(b) to California and
either grants or denies a waiver without exploring the consequences
of nationwide use of the California standards or otherwise stepping
beyond the responsibilities delineated by Congress.'').

It is worth noting . . . I would feel constrained to approve a
California approach to the problem which I might also feel unable to
adopt at the federal level in my own capacity as a regulator. The
whole approach of the Clean Air Act is to force the development of
new types of emission control technology where that is needed by
compelling the industry to ``catch up'' to some degree with newly
promulgated standards. Such an approach . . . may be attended with
costs, in the shape of reduced product offering, or price or fuel
economy penalties, and by risks that a wider number of vehicle
classes may not be able to complete their development work in time.
Since a balancing of these risks and costs against the potential
benefits from reduced emissions is a central policy decision for any
regulatory agency under the statutory scheme outlined above, I
believe I am required to give very substantial deference to
California's judgments on this score.\52\
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\52\ 40 FR 23102, 23103-04 (May 28, 1975); LEV I, 58 FR 4166
(January 13, 1993), Decision Document at 64.

This view is further supported by the House Committee Report
accompanying the 1977 amendments to the Clean Air Act. The Report
explained that, although Congress had the opportunity to restrict the
waiver provision, it instead elected to expand California's flexibility
to adopt a complete program of motor vehicle emission controls.
According to the Report, the 1977 Amendments were intended to ratify
and strengthen the California waiver provision and to affirm the
underlying intent of that provision, i.e., to afford California the
broadest possible discretion in selecting the best means to protect the
health of its citizens and the public welfare.\53\
---------------------------------------------------------------------------

\53\ H.R. Rep. No 294, 95 Cong., 1st Sess. 301-02 (1977) (cited
in MEMA I, 627 F.2d at 1110).
---------------------------------------------------------------------------

3. Standard and Burden of Proof
In Motor and Equipment Manufacturers' Association v. EPA, 627 F.2d
1095 (D.C. Cir. 1979) (MEMA I), the U.S. Court of Appeals for the
District of Columbia stated, with regard to the standard and burden of
proof, that the Administrator's role in a section 209 proceeding is to:

[C]onsider all evidence that passes the threshold test of
materiality and . . . thereafter assess such material evidence
against a standard of proof to determine whether the parties
favoring a denial of the waiver have shown that the factual
circumstances exist in which Congress intended a denial of the
waiver.\54\
---------------------------------------------------------------------------

\54\ MEMA I, 627 F.2d at 1122.

The court in MEMA I considered the standards of proof under section
209 for the two findings necessary to grant a waiver for an
``accompanying enforcement procedure'' (as opposed to the standards
themselves): (1) Protectiveness in the aggregate and (2) consistency
with CAA section 202(a) findings. The court instructed that ``the
standard of proof must take account of the nature of the risk of error
involved in any given decision, and it therefore varies with the
finding involved. We need not decide how this standard operates in
every waiver decision.'' \55\
---------------------------------------------------------------------------

\55\ Id.
---------------------------------------------------------------------------

With respect to California's protectiveness determination, the
court upheld the Administrator's position that to deny a waiver there
must be clear and compelling evidence to show that the proposed
procedures undermine the protectiveness of California's standards.\56\
The court noted that this standard of proof also accords with the
congressional intent to provide California with the broadest possible
discretion in setting regulations it finds protective of the public
health and welfare.\57\
---------------------------------------------------------------------------

\56\ Id.
\57\ Id.
---------------------------------------------------------------------------

With respect to the consistency finding, the court did not
articulate a standard of proof applicable to all proceedings but found
that the opponents of the waiver were unable to meet their burden of
proof even if the standard were a mere preponderance of the evidence.
Although MEMA I did not explicitly consider the standards of proof
under section 209 concerning a waiver request for ``standards,'' as
compared to accompanying enforcement procedures, there is nothing in
the opinion to suggest that the court's analysis would not apply with
equal force to such determinations. EPA's past waiver decisions have
consistently made clear that: ``[E]ven in the two areas concededly
reserved for Federal judgment by this legislation--the existence of
compelling and extraordinary conditions and whether the standards are
technologically feasible--Congress intended that the standard of EPA
review of the State decision to be a narrow one.'' \58\
---------------------------------------------------------------------------

\58\ See, e.g., 40 FR 21102-03 (May 28, 1975).
---------------------------------------------------------------------------

Although EPA evaluates whether there are compelling and
extraordinary conditions in California, the Agency nevertheless accords
deference to California on its choices for how best to address such
conditions in light of the extensive legislative history of section
209(b). As noted earlier, the burden of proof in a waiver proceeding is
on EPA and the opponents of the waiver. This is clear from the
statutory language stating that EPA ``shall . . . waive'' preemption
unless one of three statutory factors is met. This reading was upheld
by the D.C. Circuit in MEMA I, which concluded that this obligation
rests

[[Page 20694]]

firmly with opponents of the waiver in a section 209 proceeding by
---------------------------------------------------------------------------
holding that:

The language of the statute and its legislative history indicate
that California's regulations, and California's determinations that
they must comply with the statute, when presented to the
Administrator are presumed to satisfy the waiver requirements and
that the burden of proving otherwise is on whoever attacks them.
California must present its regulations and findings at the hearing
and thereafter the parties opposing the waiver request bear the
burden of persuading the Administrator that the waiver request
should be denied.\59\
---------------------------------------------------------------------------

\59\ MEMA I, 627 F.2d at 1121.

The Administrator's burden, on the other hand, is to make a
reasonable evaluation of the information in the record in coming to the
waiver decision. As the court in MEMA I stated, ``Here, too, if the
Administrator ignores evidence demonstrating that the waiver should not
be granted, or if he seeks to overcome that evidence with unsupported
assumptions of his own, he runs the risk of having his waiver decision
set aside as `arbitrary and capricious.'' \60\ Therefore, the
Administrator's burden is to act ``reasonably.'' \61\
---------------------------------------------------------------------------

\60\ Id. at 1126.
\61\ Id.
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III. Discussion

This section evaluates each of the two waiver requests and sets
forth EPA's rationale for granting each separate request.\62\ First, we
identify the specific rubric by which we adjudicate each waiver
request. Because the 2018 HD Warranty Amendments constitute
``accompanying enforcement procedures,'' as opposed to new standards,
EPA evaluates this request under the more limited rubric for
accompanying enforcement procedures, as detailed in section III.A
below. However, even if EPA were to treat the 2018 HD Warranty
Amendments as new onroad standards and evaluate them under the full
waiver criteria applicable to such standards, the opponents of the
waiver have failed to meet their burden of proof.
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\62\ EPA intends our grant of the waiver for each of the four
California regulations at issue (i.e., 2018 HD Warranty Amendments,
ACT, ZEAS, and ZEP Certification Regulations,) to be severable. Were
a reviewing court to set aside our waiver action regarding any
particular regulation, or portion of any particular regulation, EPA
intends for the actions on the remaining regulations and the
remaining portion of the affected regulation to remain in effect.
---------------------------------------------------------------------------

We next turn to the three waiver criteria, which we evaluate in
turn in sections III.B-D. For each waiver criterion, we set forth EPA's
general approach to evaluating the criterion, summarize the position of
CARB and the commenters for each of the waiver requests, discuss EPA's
analysis of the criterion, and finally present our conclusion.\63\ Many
of the waiver opponents' arguments centered on the third waiver prong
and, in particular, on an argument that, notwithstanding EPA's
conclusion that the California standards and accompanying enforcement
procedures are feasible within the lead time given under the
regulations, EPA must require California standards to include four
years' lead time required for certain Federal heavy-duty vehicle
standards set out in section 202(a)(3)(C). We address this argument in
detail in section III.D.5. In every case, we conclude that the
opponents of the waiver have failed to meet their burden of proof.
---------------------------------------------------------------------------

\63\ Although EPA issued separate Federal Notices that solicited
comments on each waiver request, EPA is electing to grant waivers
for all the regulations included in the two requests in this single
document in which it discusses each of the two waiver criteria only
once and then evaluates each of CARB's regulations under each
criterion and makes separate decisions with respect to each
regulation.
---------------------------------------------------------------------------

Finally, EPA received comments outside the scope of this action. We
discuss these comments, relating to preemption under the Energy Policy
and Conservation Act (EPCA), the Equal Sovereignty Doctrine and other
constitutional issues, in section III.E. As the scope of EPA's review
under section 209 is constrained, EPA has declined to consider them in
granting these waiver requests.

A. Evaluation of CARB's 2018 HD Warranty Amendments

With respect to the 2018 HD Warranty Amendments, we first address
the proper rubric by which to evaluate this regulation. To determine
the proper rubric, EPA first evaluates whether CARB's 2018 HD Warranty
Amendments should be considered standards or ``accompanying enforcement
procedures'' because ``section 209(b) refers to accompanying procedures
only in the context of consistency with section 202(a).'' \64\
Specifically, under section 209(b)(1)(C), EPA is to deny a waiver if
``such state standards and accompanying enforcement procedures are not
consistent with section 202(a).'' EPA then evaluates whether CARB's
request relating to its 2018 HD Warranty Amendments should be treated
as within-the-scope of a prior waiver request or as a request for a new
waiver. As we explain below, EPA concludes that CARB's 2018 HD Warranty
Amendments are ``accompanying enforcement procedures'' and that it is
also appropriate to treat CARB's request as one for a new waiver. Given
these determinations, EPA applies the first and third waiver prongs
under 209(b)(1) (relating to California's protectiveness determination
and consistency with 202(a)) in evaluating CARB's request. However,
even if EPA were to treat CARB's 2018 HD Warranty Amendment as a new
standard for which California is seeking a new waiver and apply all
three waiver prongs, EPA would nonetheless grant the waiver.
---------------------------------------------------------------------------

\64\ MEMA I, 627 F.2d at 1111-12.
---------------------------------------------------------------------------

CARB requested that the Administrator confirm that the 2018 HD
Warranty Amendments fall within the scope of the 2005 waiver of
preemption that the Administrator granted for California's emission
standards and associated test procedures for 2007 and subsequent model
year heavy-duty diesel vehicles and engines, and its waiver request
includes discussion of how each of the relevant prongs applicable to
enforcement procedures (i.e., that the enforcement procedure does not
undermine California's protectiveness determination and that there is
consistency between the Federal and California enforcement procedures)
are within the scope of the previously granted waiver. In the
alternative, CARB requested EPA grant a new waiver of preemption and
discussed each of the relevant prongs for a new waiver (i.e.,
protectiveness, consistency and, if waiving a standard, the need for
the program as a whole to meet compelling and extraordinary conditions
in the state).\65\ CARB noted that the 2018 HD Warranty Amendments
encompass several elements that individually and collectively establish
more rigorous emissions warranty and emissions maintenance schedule
requirements.\66\
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\65\ See 2018 HD Warranty Amendments Waiver Support Document at
18-25. CARB maintained that the 2018 HD Warranty Amendments are
within the scope of the waiver EPA granted for CARB's 2007 heavy-
duty vehicle emission standards. 70 FR 50322 (August 26, 2005).
Therefore, CARB's waiver request included information to demonstrate
that the 2018 HD Warranty Amendments do not undermine the previous
protectiveness determination associated with the 2007 emission
standards nor do the Amendments affect the consistency of the heavy-
duty vehicles emission standards with section 202(a) of the CAA.
CARB also stated that it is not aware of any new issues raised by
the Amendments. Alternatively, CARB stated that, if EPA must grant
CARB a new waiver for the Amendments (in addition to the two waiver
criteria already discussed for the within-the-scope request),
California continues to need a separate motor vehicle program to
meet compelling and extraordinary conditions.
\66\ 2018 HD Warranty Amendments Waiver Support Document at 18-
25.
---------------------------------------------------------------------------

EPA believes that the 2018 HD Warranty Amendments are properly

[[Page 20695]]

considered accompanying enforcement procedures because they constitute
criteria designed to determine compliance with applicable standards and
are accordingly relevant to a manufacturer's ability to produce
vehicles and engines that comply with applicable standards for their
useful lives.\67\
---------------------------------------------------------------------------

\67\ MEMA I at 1111-13 (``In that setting we believe that the
Administrator correctly classified the in-use maintenance
regulations as accompanying enforcement procedures' rather than as
``standards.''); Decision Document accompanying 51 FR 12391 (April
10, 1986), at 3. EPA sets emissions warranty periods under section
207(a) and not section 202(a). See, e.g., 48 FR 52170 (November 16,
1983).
---------------------------------------------------------------------------

Because accompanying enforcement procedures are only contained in
section 209(b)(1)(C), or the third waiver prong, EPA's historical
practice of considering whether to grant waivers for accompanying
enforcement procedures tied to standards for which a waiver has already
been granted is to determine only: (1) Whether the enforcement
procedures threaten the validity of California's determination that its
standards are as protective of public health and welfare as applicable
Federal standards, (i.e., the first prong) and (2) whether the Federal
and California enforcement procedures are consistent (i.e., the third
prong).\68\ EPA notes that these two criteria are similar to the
questions EPA reviews for within-the-scope requests for both standards
and enforcement procedures. However, when reviewing amendments to a
previously waived standard or accompanying enforcement procedure, for
which CARB seeks a within-the-scope determination from EPA, EPA also
reviews whether the amendments raise any ``new issues'' affecting the
Administrator's previous waiver determination, and if there are new
issues that trigger a full review of the relevant two prongs.\69\
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\68\ MEMA I, 627 F.2d 1095, 1111, 1113; Decision Document
accompanying 61 FR 53371 (Oct. 11, 1996) at 17; 74 FR 3030, 3032
(Jan. 16, 2009).
\69\ 45 FR 54130 (Aug. 14, 1980); 46 FR 36742 (July 15, 1981);
75 FR 44948, 444951 (July 30, 2010).
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In this instance, EPA believes new issues have been raised by the
amendments and therefore it is appropriate to review the Amendments
under the complete waiver criteria applicable to accompanying
enforcement procedures (i.e., the first and third waiver prongs).
Because under either compliance path the manufacturer is under an
additional requirement that creates a new burden rather than a
flexibility, EPA believes this necessarily creates a new question as to
whether the accompanying enforcement procedure meets the requirements
of the third waiver prong. EPA notes that there could be some level of
uncertainty in determining whether ``new issues'' have been raised,
including whether a compliance path where manufacturers only cover the
costs of expected additional warranty claims is equivalent to a new,
more stringent accompanying enforcement procedure. In addition, because
the criteria for a within-the-scope waiver evaluation and a full waiver
are similar, EPA believes it is prudent in this instance to review the
request under the full waiver criteria (i.e., the relevant two prongs
identified above). The 2018 HD Warranty Amendments encompass several
elements that individually and collectively establish more rigorous
emissions warranty and emissions maintenance schedule requirements that
raise issues regarding the technological feasibility of the aggregate
requirements applicable to new heavy-duty vehicles and engines.
Therefore, EPA is evaluating the 2018 HD Warranty Amendments under the
two waiver criteria below that apply to accompanying enforcement
procedures.\70\
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\70\ EPA believes it is only necessary to review: (1) Whether
the enforcement procedures are so lax that they threaten the
validity of California's determination that its standards are as
protective of public health and welfare as applicable Federal
standards, and (2) whether the Federal and California enforcement
procedures are consistent. However, even if EPA were to review the
enforcement procedures under the second waiver criterion (as EPA
does in the alternative below, without conceding the second waiver
criterion applies, which we include in the event that those opposed
to the waiver believe the 2018 HD Warranty Amendments are equivalent
to new emission standards rather than accompanying enforcement
procedures), the opponents of the 2018 HD Warranty Amendments have
not met their burden of proof regarding section 209(b)(1)(B).
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B. First Waiver Criterion: Are California's Protectiveness
Determinations Arbitrary and Capricious?

We now turn to California's protectiveness determinations for the
regulations covered under each of its waiver requests. EPA's evaluation
of this first waiver prong is performed under the construct explained
here. Section 209(b)(1)(A) of the Clean Air Act requires EPA to grant a
waiver unless the Administrator finds that California's determination
that its State standards will be, in the aggregate, at least as
protective of public health and welfare as applicable Federal
standards, is arbitrary and capricious. EPA may not disregard
California's determination unless there is ``clear and compelling
evidence'' to the contrary.\71\ Moreover, ``[t]he language of the
statute and its legislative history indicate that California's
regulations, and California's determination that they comply with the
statute, when presented to the Administrator are presumed to satisfy
the waiver requirements.'' \72\ Additionally, it is ``the parties
opposing the waiver request bear the burden of persuading the
Administrator that the waiver request should be denied.'' \73\
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\71\ MEMA I, 627 F.2d 1095, 1121-22 (D.C. Cir. 1979).
\72\ Id. See also Ford Motor, 606 F.2d 1293, 1297 (D.C. Cir.
1979).
\73\ MEMA I, 627 F.2d at 1121.
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1. EPA's Historical Interpretation of Section 209(b)(1)(A)
EPA's long-standing interpretation (also called the ``traditional
interpretation'') is that the phrase ``State standards'' in section
209(b)(1) means the entire California new motor vehicle emissions
program.\74\ Therefore, as explained below, when evaluating
California's protectiveness determination, EPA compares the California
standards as a whole to the Federal standards. That comparison is
undertaken within the broader context of the previously waived
California program, which relies upon protectiveness determinations
that EPA has previously found were not arbitrary and capricious.\75\
That evaluation follows the instruction of section 209(b)(2), which
states: ``If each State standard is at least as stringent as the
comparable applicable Federal standard, such State standard shall be
deemed to be at least as protective of health and welfare as such
Federal standards for purposes of [209(b)(1)].'' \76\
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\74\ 74 FR 32744, 32749 (July 8, 2009); 70 FR 50322 (Aug. 26,
2005); 77 FR 9239 (Feb. 16, 2012); 78 FR 2112, 2123 (Jan. 9, 2013).
\75\ 36 FR 17458 (Aug. 31, 1971). (``The law makes it clear that
the waiver requests cannot be denied unless the specific finding
designated in the statute can properly be made. The issue of whether
a proposed California requirement is likely to result in only
marginal improvement in air quality not commensurate with its cost
or is otherwise an arguably unwise exercise of regulatory power is
not legally pertinent to my decision under section 209, so long as
the California requirement is consistent with section 202(a) and is
more stringent than applicable Federal requirements in the sense
that it may result in some further reduction in air pollution in
California.''). The ``more stringent'' standard expressed here in
1971 was superseded by the 1977 Amendments to section 209, which
established that California's standards must be, in the aggregate,
at least as protective of public health and welfare as applicable
Federal standards. The stringency standard remains, though, in
section 209(b)(2).
\76\ CAA section 209(b)(2).
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To review California's protectiveness determination in light of
section 209(b)(2), EPA conducts its own analysis of the newly adopted
California standards to comparable applicable Federal standards. The
comparison

[[Page 20696]]

quantitatively answers whether the new standards are more or less
protective than the Federal standards.
Section 209 provides two paths for finding that California's
protectiveness determination is reasonable. In addition to a side-by-
side comparison of California and applicable Federal standards
considering section 209(b)(2), California's program can still be at
least as protective as EPA's program even if some (or even all) of the
new or amended standards in a waiver request are less stringent than
the applicable EPA standards if California's program, as a whole, is at
least as protective as the Federal standards as a whole.\77\ Thus, EPA
first examines whether the side-by-side analysis under section
209(b)(2) resolves the protectiveness inquiry. If there are some EPA
standards that are numerically more stringent that the California
standards, then the question that EPA reviews is whether the new or
amended California standards would cause the State's new motor vehicle
emissions program as a whole (``in the aggregate'') to become less
protective than EPA's program. A finding that California's
protectiveness determination was arbitrary and capricious under section
209(b)(1)(A) must be based upon ```clear and compelling evidence' to
show that proposed [standards] undermine the protectiveness of
California's standards.'' \78\
---------------------------------------------------------------------------

\77\ Id.
\78\ MEMA I, 627 F.2d at 1122.
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As noted previously, when considering whether to grant waivers for
accompanying enforcement procedures tied to standards for which a
waiver has already been granted, EPA has long held that, under section
209(b)(1)(A)'s first prong, it will only address the question of
whether the enforcement procedures are so lax that they threaten the
validity of California's previous determination that its standards are
as protective of public health and welfare as applicable Federal
standards.\79\
---------------------------------------------------------------------------

\79\ MEMA I, 627 F.2d 1095, 1113 n.36 (D.C. Cir. 1979)(The
Administrator ``explored whether the procedures had a negative
effect on the protectiveness of the California standards for which a
waiver had already been granted. See 43 FR 32183 (1978), reprinted
in J.A. at 56. This inquiry is perfectly consistent with the
Administrator's past practice and his position in this court.'')
---------------------------------------------------------------------------

2. CARB's Discussion of California's Protectiveness Determinations in
the Waiver Requests
a. 2018 HD Warranty Amendments
With regard to the 2018 HD Warranty Amendments, CARB made a
determination that the Amendments will not cause California's motor
vehicle emission standards, in the aggregate, to be less protective of
public health and welfare than applicable Federal standards in
Resolution 18-24.\80\ CARB noted that the 2018 HD Warranty Amendments
do not reduce the stringency of the previously waived emission
standards or the associated test procedures for 2007 and subsequent
model year heavy-duty diesel engines and vehicles, but instead
establish emissions warranty requirements for heavy-duty diesel engines
and heavy-duty diesel vehicles that are more stringent than the
corresponding Federal emission warranty requirements for such engines
and vehicles.\81\
---------------------------------------------------------------------------

\80\ EPA-HQ-OAR-2022-0330-0004.
\81\ Id. at 19-20. CARB also noted that the newly established
emission warranty periods for every category of California heavy-
duty diesel engines and heavy-duty diesel vehicles exceed the
corresponding federal emission warranty period of 5 years or 100,000
miles during this time frame. CARB also noted that the newly
established minimum allowable maintenance schedules for emissions-
related parts are more restrictive regarding allowable repairs or
replacements of emissions-related parts than the corresponding
federal allowable maintenance schedules, and the Amendments expand
the scope of California's emissions warranty beyond the federal
emissions warranty by expressly encompassing components monitored by
HD OBD systems which, when they fail, cause the HD OBD system's
malfunction indication light (MIL) to illuminate. Id.
---------------------------------------------------------------------------

b. ACT, ZEAS, and ZEP Certification Regulations
Regarding CARB's request for a waiver for the ACT Regulation, ZEAS
Regulation, and ZEP Certification Regulation, CARB noted that it made
protectiveness determinations for each respective regulation in the
request.
First, CARB stated that in Board Resolution 78-10 it determined
that the requirements related to the control of emissions contained in
the ACT Regulation will not cause California motor vehicle emission
standards, in the aggregate, to be less protective of public health and
welfare than applicable Federal standards, and that no basis exists for
EPA's Administrator to find that determination arbitrary and
capricious.\82\ CARB noted that its ACT Regulation is clearly more
stringent than any applicable Federal requirements because there are no
comparable Federal requirements.\83\
---------------------------------------------------------------------------

\82\ EPA-HQ-OAR-2022-0331-0003. See Board Resolution 20-19.
\83\ Id. CARB further notes that ``because California's pre-
existing motor vehicle emissions program does not require medium- or
heavy-duty vehicles and engines to meet zero emission standards, it
is evident that the ACT regulation will, in conjunction with other
elements of California's motor vehicle emissions program for medium
and heavy-duty vehicles, render California's motor vehicle emission
emissions standards, in the aggregate, to be at least as protective
of public health and welfare as applicable federal standards.''
---------------------------------------------------------------------------

Second, the ACT, ZEAS, and ZEP waiver request also contained CARB's
summary of the Board's protectiveness findings regarding its ZEAS
Regulation and explained that there are no comparable Federal
requirements.\84\
---------------------------------------------------------------------------

\84\ Id. at 20. See Board Resolution 19-16.
---------------------------------------------------------------------------

Finally, in the ACT, ZEAS, and ZEP waiver request, CARB noted that
the ZEP Certification Regulation was also accompanied by the Board
approved Resolution 19-15 that contained a determination that these
regulations will not cause California's motor vehicle emission
standards, in the aggregate, to be less protective of public health and
welfare than applicable Federal standards.\85\
---------------------------------------------------------------------------

\85\ Id. at 20-21.
---------------------------------------------------------------------------

3. Comments on California's Protectiveness Determinations
EPA did not receive any comment suggesting that CARB's 2018 HD
Warranty Amendments threaten the validity of California's determination
that its standards are as protective of public health and welfare as
applicable Federal standards.\86\
---------------------------------------------------------------------------

\86\ Although there is no information in the record that would
support a finding that CARB's protectiveness determination was
arbitrary and capricious in a section ``209(b)(2) type'' of
analysis, we note that, because section 209(b)(1)(A) calls for an
analysis of whether California's motor vehicle emission standards,
in the aggregate, are as protective of public health and welfare as
applicable Federal standards, EPA also incorporates the findings
below regarding the protectiveness of the regulations in CARB's ACT,
ZEAS, and ZEP waiver request to the finding regarding the HD
Warranty Amendments.
---------------------------------------------------------------------------

However, EPA received several comments that claimed that CARB's
protectiveness determinations in support of the ACT Regulation and the
ZEAS Regulation were arbitrary and capricious.\87\ One commenter
claimed that CARB was pursuing a policy directive toward the
acceleration of ZEVs in the medium- and heavy-duty truck sector by
glossing over a number of impacts both within and outside the State of
California that renders the ACT Regulation less protective than
applicable Federal standards.\88\ Several commenters asserted that CARB
over-estimated the emission benefits of its standards, even though CARB
noted that its standards would still enhance the relative
protectiveness of the California

[[Page 20697]]

program that EPA previously found to be as protective as the Federal
program.\89\ EPA did not receive any comments related to CARB's
protectiveness determination for the ZEP Certification Regulation.
---------------------------------------------------------------------------

\87\ Although EPA discusses these comments as provided (meaning
that some comments are discussed in the context of multiple
regulations at once), EPA considered comments separately in its
evaluation of California's protectiveness determination for each
regulation.
\88\ Valero at 2. This commenter asserted that CARB failed to
conduct a full lifecycle analysis in order to understand the full
emission impacts of battery electric vehicles and that CARB did not
consider potential reductions that may be achieved by internal
combustion engines.
\89\ CARB Supplemental Comments, Docket Nos. EPA-HQ-OAR-2022-
0330-0072, EPA-HQ-OAR-2022-0331-0133. CARB noted that if there are
any benefits from the new standards then their adoption cannot
render the existing California program less protective. CARB stated
that, since there are no comparable federal requirements for ACT and
ZEAS, this logic is all the more true.
---------------------------------------------------------------------------

As noted above, EPA received comments that claimed that the ACT
Regulation would slow down fleet turnover and that, by requiring zero-
emission vehicles, this regulation would not ``result in lower
emissions of GHGs and other pollutants than can be achieved by internal
combustion engine (ICE) vehicles.'' \90\ Another commenter contended
that ``to the extent a CARB [commercial truck or tractor (CMV)] rule or
standard is technologically infeasible, or likely result in new CMVs
that are cost prohibitive'' or that raises reliability concerns then
``the agency'' would be acting ``arbitrarily and capriciously'' to
issue such a rule or standard.\91\
---------------------------------------------------------------------------

\90\ Valero at 2; see also AFPM at 8.
\91\ NADA at 2-3. We further address these latter comments in
our analysis of the third waiver criterion below. In general, EPA
has long explained that ``questions concerning the effectiveness of
the available technology are also within the category outside my
permissible scope of inquiry,'' under section 209(b)(1)(C). 41 FR
44209, 44210 (October 7, 1976).
---------------------------------------------------------------------------

In response, CARB noted that these commenters cannot establish
``that delayed purchases or pre-buys or other purchasing choices would
lead to emissions increases as a result of ACT or ZEAS'' because ``both
regulations will require displacement of higher-emitting conventional
vehicles with zero-emission vehicles'' and ``[e]ven if that
displacement is lower or slower than CARB estimated, these standards
nonetheless could not make California's motor vehicle program less
protective than EPA's.'' \92\
---------------------------------------------------------------------------

\92\ CARB Supplemental Comments at 4.
---------------------------------------------------------------------------

EPA also received comments that questioned the policy of CARB's
adoption of the ACT and ZEAS Regulations. One commenter claimed that
maintaining the existing Federal standards would be the best way for
California to minimize environmental impacts, based on a full lifecycle
assessment of emissions, instead of California's approach that would
necessitate expensive battery electric technology that would slow fleet
turnover.\93\ Regarding the ACT Regulation some commenters also claimed
that CARB should have adopted different regulatory approaches, such as
one that incorporates increased introduction of renewable liquid and
gaseous fuels, which the commenter claimed would be more cost
effective.\94\ In response, CARB noted that EPA is precluded from
considering different policy or hypothetical rulemaking options that
CARB might have considered and rather is properly guided by the
language at section 209(b)(2) that clearly states that if each state
standard is at least as stringent as the comparable Federal standard
that such California standards shall be deemed at least as protective
of public health and welfare as such Federal standards for purposes of
section 209(b)(1).\95\
---------------------------------------------------------------------------

\93\ AFPM at 8-12.
\94\ One commenter suggests that, to the extent the ACT
Regulation is technologically infeasible or cost prohibitive for
customers or otherwise raises reliability concerns, then CARB's
protectiveness determination would be arbitrary and capricious.
Another commenter stated that California has not conducted any air
quality analysis per dollar of investment relative to the existing
Federal standards versus the ACT Regulation. This commenter claimed
that a full life-cycle analysis would reveal that the existing
Federal NO<INF>X</INF> standards are the better approach. AFPM at
12-15.
\95\ CARB Supplemental Comments at 2.
---------------------------------------------------------------------------

4. California's Protectiveness Determinations Are Not Arbitrary and
Capricious
As described above, EPA's traditional analysis has been to evaluate
California's protectiveness determination by comparing the new
California standards, or amendments, to applicable EPA emission
standards for the same pollutants. The comparison of EPA and California
standards is undertaken within the broader context of the previously
waived California program, which relies upon protectiveness
determinations that EPA has previously found were not arbitrary and
capricious.\96\ The prior statutory requirement that each California
standard be ``more stringent'' than the Federal standard was superseded
by the 1977 Amendments to section 209, which established that a waiver
must be granted where California's standards are, in the aggregate, at
least as protective of public health and welfare as applicable Federal
standards. This was intended to afford California the broadest possible
discretion in designing is motor vehicle emission program.
---------------------------------------------------------------------------

\96\ 78 FR 2112, 2123 (January 9, 2013).
---------------------------------------------------------------------------

EPA did not receive any comments or information in the record that
demonstrated that CARB's new, more stringent 2018 HD Warranty
Amendments would threaten the validity of CARB's protectiveness
determination applicable to these enforcement procedures. Based on the
record EPA cannot make a determination that CARB's protectiveness
finding regarding the 2018 HD Warranty Amendments was arbitrary and
capricious.
EPA has received no comment or other information in the record to
support an argument that EPA's statutory interpretation of the first
waiver prong for its analysis of the California emission standards
(i.e., ACT Regulation, ZEAS Regulation, and ZEP Certification
Regulation) is unreasonable. In addition, EPA received no comment or
information that provided any type of numerical comparison of the
stringency of CARB's standards to applicable Federal standards.
Specifically, there is no evidence in the record to demonstrate, by way
of numerical comparison, that CARB's standards are not as stringent, in
the aggregate, as EPA's requirements.\97\ To the extent that commenters
stated that CARB over-estimated the emission benefits of its standards,
on the basis of the record EPA agrees with CARB that, under a numerical
comparison of the standards, the new standards will still be more
stringent than the Federal program--especially in the case of the ACT
and ZEAS Regulations, which have no comparable Federal requirements.
---------------------------------------------------------------------------

\97\ EPA notes that CARB's protectiveness determinations,
associated with each of the regulations contained in its waiver
request were not arbitrary and capricious despite subsequent changes
to the ``applicable Federal standards'' in section 209(b)(1)(A). In
this case changes in the applicable standards are reflected in EPA's
recent rule to lower NO<INF>X</INF> and other air pollutants from
heavy-duty vehicles and engines starting in the 2027 model year. See
88 FR 4296 (January 24, 2023). EPA's regulation does not relate to
emission warranty and other requirements for the same model year
(2022-2023) heavy-duty vehicles and engines as the 2018 HD Warranty
Amendments. This is in contrast to EPA's recent rulemaking where the
extended emission warranty period takes place with the 2027 model
year. Likewise, the EPA regulation does not relate to or does not
set zero-emission vehicle requirements related to heavy-duty
vehicles and engines as do the regulations contained in CARB's ACT,
ZEAS, and ZEP waiver request. In addition, at the time CARB
submitted its waiver requests the ``applicable Federal standards''
were EPA's regulations adopted in 2002 and applicable to 2007 and
2010 requirements, and not EPA's most recent rulemaking. As noted,
no evidence is in the record to demonstrate, by way of numerical
comparison, that CARB's standards are not as stringent, in the
aggregate, as the prior EPA standards that commenced in the 2007
model year.
---------------------------------------------------------------------------

Therefore, we find that the opponents of the waiver have not met
their burden of proof to demonstrate that any of CARB's protectiveness
determinations associated with the regulations contained in the two
waiver requests were arbitrary and capricious and,

[[Page 20698]]

therefore, EPA cannot deny the CARB's waiver requests based on section
209(b)(1)(A).
Additionally, in response to comments suggesting that CARB should
have adopted different policies or different regulations, or that
CARB's ACT and ZEAS Regulations will not be effective, EPA notes that
there are no comparable Federal standards mandating, for instance,
sales of a certain percentage of ZEV and NZEV vehicles, or zero-
emission airport shuttle fleet composition.\98\ As such, any
enhancement to CARB's motor vehicle emission program--including its
heavy-duty vehicles standards--cannot render California's program less
protective than the applicable Federal standards. Likewise, and as we
further address these latter comments in our analysis of the third
waiver criterion below, EPA is not permitted in its statutory role to
assess different, hypothetical CARB regulations that CARB might have
adopted and then, in turn, compare those regulations to Federal
standards.\99\ That is, the relevant question before EPA is whether
California's standards are in the aggregate at least as protective as
the Federal ones, not whether California hypothetically should have
adopted a different program that the commenter prefers.
---------------------------------------------------------------------------

\98\ In general, EPA has long explained that ``questions
concerning the effectiveness of the available technology are also
within the category outside [the Administrator's] permissible scope
of inquiry,'' under section 209(b)(1)(C). 41 FR 44209, 44210
(October 7, 1976).
\99\ EPA has recognized that the intent of Congress in creating
a limited review based on the section 209(b)(1) criteria was to
ensure that the Federal government did not second-guess state policy
choices. This has led EPA to state, ``It is worth noting . . . I
would feel constrained to approve a California approach to the
problem which I might also feel unable to adopt at the federal level
in my own capacity as a regulator. The whole approach of the Clean
Air Act is to force the development of new types of emission control
technology where that is needed by compelling the industry to
``catch up'' to some degree with newly promulgated standards. Such
an approach * * * may be attended with costs, in the shaped of
reduced product offering, or price or fuel economy penalties, and by
risks that a wider number of vehicle classes may not be able to
complete their development work in time. Since a balancing of these
risks and costs against the potential benefits from reduced
emissions is a central policy decision for any regulatory agency
under the statutory scheme outlined above, I believe I am required
to give very substantial deference to California's judgments on this
score.'' 40 FR 23103-04. See also LEV I, 58 FR 4166 (January 13,
1993), Decision Document at 64.
---------------------------------------------------------------------------

EPA also received no comments or evidence to support the view that
zero-emission vehicles do not result in some degree of lower
emissions--of either criteria pollutants or GHGs--than conventional
vehicles do. EPA agrees with CARB that this logically supports a
conclusion that the ACT and ZEAS Regulations, which require more and
more of these vehicles, would increase the protectiveness of
California's program.\100\ Moreover, EPA does not agree with the
commenters' claims that considering lifecycle emissions renders the
protectiveness finding arbitrary and capricious. First, the scope of
EPA's review of CARB's protectiveness determination is narrow and need
not include far-reaching assessments of the environmental or other
impacts of CARB's chosen regulations and associated policy decisions.
Section 209(b)(1) does not require California or EPA to consider
lifecycle emissions. Nor does it otherwise suggest that EPA must look
broadly outside motor vehicle emissions to emissions from other
sources, including those regulated under separate federal and state
programs. Therefore, EPA is not required to consider potential broader
environmental impacts in assessing protectiveness. Secondly, to the
extent such impacts and decisions could be relevant to section
209(b)(1)(A), commenters failed to adduce sufficient evidence to
support this argument considering California's technical findings
relating to this issue.\101\
---------------------------------------------------------------------------

\100\ CARB Final Statement of Reasons for ACT Regulation at 105-
06, <a href="https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fsor.pdf">https://ww2.arb.ca.gov/sites/default/files/barcu/regact/2019/act2019/fsor.pdf</a>; CARB Supplemental Comments at 3-4 (``It is, in
fact, unrefuted that zero-emission vehicles result in lower
emissions (and not only of GHGs) than conventional vehicles. This
fact naturally leads to the conclusion that requiring the sale (ACT)
and use (ZEAS) of more and more of these vehicles increases the
protectiveness of California's program which has previously been
found to be at least as protective as EPA's.'').
\101\ CARB Supplemental Comments at 3 (``[T]he only analysis
offered--a report by the American Transportation Research
Institute--does nothing to undermine CARB's determination. That
report (also prepared after CARB's protectiveness determination)
focused only on lifecycle GHG emissions from Class 8 trucks engaged
in long hauls, and, as such, it cannot undermine CARB's
protectiveness determination which was based on consideration of all
affected pollutants and all regulated vehicles. In any event, even
though it focused exclusively on the vehicles that CARB found the
least promising for near-term electrification, the report
nonetheless finds that zero-emission Class 8 trucks engaged in long
hauls would have lower lifecycle GHG emissions than conventional
Class 8 trucks. In other words, this report, too, supports the
determination that California's program with ACT is at least as
protective as EPA's federal program (which has no ACT-like
standards)'' (original emphasis)).
---------------------------------------------------------------------------

EPA also finds no evidence in the record, to the extent commenters
asserted that fleet turnover would be slower, that supports the view
that an emissions increase would occur because of the ACT or ZEAS
Regulations. Such claims, without evidence that the regulations result
in less protective emission standards do not meet the burden of proof
on the opponents of the waiver.\102\ Similar to commenters' claims that
the regulations would result in slower fleet turnover, statements that
these purchasing decisions will result in fewer emission benefits does
not otherwise demonstrate that CARB's emission standards are less
protective than applicable Federal standards, or that CARB's
protectiveness determination was arbitrary and capricious.
---------------------------------------------------------------------------

\102\ As previously mentioned, CARB performed a sensitivity
analysis of both ``pre-buy'' and ``no-buy'' scenarios regarding both
the ACT and ZEAS program. For the ACT Regulation, CARB found that it
would cause no increases in emissions. CARB Supplemental Comments at
3-4.
---------------------------------------------------------------------------

5. Section 202(b)(1)(A) Conclusion
EPA believes that, given the lack of any comments or information in
the record that demonstrate that CARB's new more stringent 2018 HD
Warranty Amendments would threaten the validity of CARB's
protectiveness determination, it has no basis to conclude that
California's determination that its standards are at least as
protective is arbitrary and capricious and therefore deny CARB's waiver
request for the 2018 HD Warranty Amendments under section 209(b)(1)(A).
The same conclusion applies were EPA to consider (in the alternative)
the 2018 HD Warranty Amendments as emission standards as opposed to
accompanying enforcement procedures.
Further, based on the record before EPA, we cannot find that CARB
was arbitrary and capricious in its respective findings that the
California heavy-duty vehicle and engine standards, including the ACT
Regulation, the ZEAS Regulation, and the ZEP Certification Regulation)
are individually, and in the aggregate, at least as protective of
public health and welfare as applicable Federal standards. CARB has
provided reasonably detailed information to support its protectiveness
determination. Commenters have not provided sufficient information and
analysis that calls CARB's analysis (associated with the California
protectiveness determination) into question. Therefore, we find that
the opponents of the waiver have not met their burden of proof to
demonstrate that any of CARB's protectiveness determinations associated
with the regulations contained within their waiver requests were
arbitrary and capricious and, therefore, EPA cannot deny CARB's waiver
requests based on section 209(b)(1)(A).

[[Page 20699]]

C. Second Waiver Criterion: Does California Need Its Standards To Meet
Compelling and Extraordinary Conditions?

Under section 209(b)(1)(B) of the Act, EPA must grant a waiver for
California vehicle and engines standards and accompanying enforcement
procedures unless EPA finds that California ``does not need such State
standards to meet compelling and extraordinary conditions.'' EPA has
traditionally interpreted this provision as requiring consideration of
whether California needs a separate motor vehicle program to meet
compelling and extraordinary conditions.\103\
---------------------------------------------------------------------------

\103\ 87 FR 14332 (March 14, 2022).
---------------------------------------------------------------------------

1. EPA's Historical Interpretation of Section 209(b)(1)(B)
For nearly the entire history of the waiver program, EPA has read
the phrase ``such State standards'' in section 209(b)(1)(B) as
referring back to standards ``in the aggregate,'' in the root paragraph
of section 209(b)(1), which calls for California to make a
protectiveness finding for its standards. EPA has interpreted the
phrase ``in the aggregate'' as referring to California's program as a
whole, rather than each State standard, and as such the Agency
evaluates both protectiveness and need with reference to California's
program as a whole.\104\ EPA has reasoned that both statutory
provisions must be read together so that the Agency reviews the same
standards (e.g., new motor vehicle emission standards program) for need
under 209(b)(1)(B) that California considers in making its
protectiveness determination, and that under this statutory framework
EPA is to afford California discretion in assessing its need for its
motor vehicle emission standards program.\105\ EPA has also explained
that section 209(b)(1)(C) also supports the ``whole program''
interpretation of section 209(b)(1)(B), as EPA's feasibility assessment
necessarily must evaluate any interactions between the standards in the
proposed program (as well as other existing compliance obligations) and
whether those interactions create feasibility problems.\106\ The D.C.
Circuit has held that ``[t]he expansive statutory language gives
California (and in turn EPA) a good deal of flexibility in assessing
California's regulatory needs. We therefore find no basis to disturb
EPA's reasonable interpretation of the second criterion.'' \107\
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\104\ 49 FR 18887, 18890 (May 3, 1984) (``The interpretation
that my inquiry under section 209(b)(1)(B) goes to California's need
for its own mobile source program is borne out not only by the
legislative history, but by the plain meaning of the statue as
well.'').
\105\ 74 FR 32744, 32751, n. 44, 32761, n.104 (July 8, 2009).
See also 78 FR 2112, 2126-27, n.78 (January 9, 2013).
\106\ EPA notes there would be an inconsistency if ``State
standards'' meant all California standards when used in section
209(b)(1) but only particular standards when used in 209(b)(1)(B)
and 209(b)(1)(C). EPA has traditionally interpreted the third waiver
criterion's feasibility analysis as a whole-program approach. 87 FR
14361, n.266. See also 84 FR at 51345.
\107\ Am. Trucking Ass'n v. EPA, 600 F.3d 624, 627 (D.C. Cir.
2010) (ATA v. EPA). See also Dalton Trucking v. EPA, No. 13-74019
(9th Cir. 2021) (``The EPA was not arbitrary and capricious in
declining to find that `California does not need such California
standards to meet compelling and extraordinary conditions,' section
7543(e)(2)(A)(ii), under the alternative version of the needs test,
which requires `a review of whether the Fleet Requirements are per
se needed to meet compelling and extraordinary conditions,' 78 FR at
58,103. The EPA considered `the relevant factors,' Motor Vehicle
Mfrs. Ass'n of U.S. v. State Farm Mut. Auto. Ins. Co., Inc., 463
U.S. 29, 42-43 (1983), including statewide air quality, 78 FR
58,104, the state's compliance with Federal National Ambient Air
Quality standards for ozone and PM<INF>2.5</INF> on a statewide
basis, id. at 58,103-04, the statewide public health benefits, id.
at 58,104, and the utility of the Fleet Requirements in assisting
California to meet its goals, id. at 58,110. Contrary to Dalton's
argument, the EPA did not limit its review to two of California's
fourteen air quality regions. The EPA examined the relevant data
provided by CARB, and it articulated a `satisfactory explanation for
its action including a rational connection between the facts found
and the choice made.' See Motor Vehicle Mfrs. Ass'n of U.S., Inc.,
463 U.S. at 43 (cleaned up).'').
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In addressing the Agency's reading of section 209(b)(1)(B) as
addressing California's need for the motor vehicle emission program
standards program as a whole in the 1983 LEV waiver request, for
example, EPA explained that:
This approach to the ``need'' criterion is also consistent with the
fact that because California standards must be as protective as Federal
standards in the aggregate, it is permissible for a particular
California standard or standards to be less protective than the
corresponding Federal standard. For example, for many years, California
chose to allow a carbon monoxide standard for passenger cars that was
less stringent than the corresponding Federal standard as a ``trade-
off'' for California's stringent nitrogen oxide standard. Under a
standard of review like that proposed by MVMA/AIAM, EPA could not
approve a waiver request for only a less stringent California standard
because such a standard, in isolation, necessarily could be found to be
contributing to rather than helping, California's air pollution
problems.\108\
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\108\ 58 FR 4166, LEV Waiver Decision Document at 50-51.
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In 1994, EPA again had cause to explain the Agency's reading of
section 209(b)(1)(B) in the context of California's particulate matter
standards waiver request:

[T]o find that the `compelling and extraordinary conditions'
test should apply to each pollutant would conflict with the
amendment to section 209 in 1977 allowing California to select
standards `in the aggregate' at least as protective as federal
standards. In enacting that change, Congress explicitly recognized
that California's mix of standards could `include some less
stringent than the corresponding federal standards.' See H.R. Rep.
No. 294, 95th Cong., 1st Sess. 302 (1977). Congress could not have
given this flexibility to California and simultaneously assigned to
the state the seemingly impossible task of establishing that
`extraordinary and compelling conditions' exist for each
standard.\109\
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\109\ 49 FR at 18887, 18890.

Congress has also not disturbed this reading of section
209(b)(1)(B) as calling for EPA review of California's whole program.
With two noted exceptions described below, EPA has consistently
interpreted this provision as requiring the Agency to consider whether
California needs a separate motor vehicle emission program rather than
the specific standards in the waiver request at issue to meet
compelling and extraordinary conditions. Congress intended to allow
California to address its extraordinary environmental conditions and
foster its role as a laboratory for motor vehicle emissions control.
The Agency's longstanding practice therefore has been to evaluate
CARB's waiver requests with the broadest possible discretion to allow
California to select the means it determines best to protect the health
and welfare of its citizens in recognition of both the harsh reality of
California's air pollution and the importance of California's ability
to serve as a pioneer and a laboratory for the nation in setting new
motor vehicle emission standards and developing control
technology.\110\ EPA notes that ``the statute does not provide for any
probing substantive review of the California standards by federal
officials.'' \111\ As a general matter, EPA has applied the traditional
interpretation in the same way for all air pollutants, criteria and GHG
pollutants alike.\112\
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\110\ See, e.g., S. Rep. No. 403, 90th Cong., 1st Sess. 33
(1967) (The waiver of preemption is for California's ``unique
problems and pioneering efforts.''); 113 Cong. Rec. 30950, 32478
(``[T]he State will act as a testing agent for various types of
controls and the country as a whole will be the beneficiary of this
research.'') (Statement of Sen. Murphy).
\111\ Ford Motor, 606 F.2d 1293, 1300 (D.C. Cir. 1979).
\112\ 74 FR at 32763-65; 76 FR 34693; 79 FR 46256; 81 FR 95982.
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In a departure from its long-standing interpretation, EPA has on
two separate instances limited its interpretation of this provision to
California motor

[[Page 20700]]

vehicle standards that are designed to address local or regional air
pollution problems.\113\ In both instances EPA determined that the
traditional interpretation was not appropriate for standards designed
to address a global air pollution problem and its effects and that it
was appropriate to address such standards separately from the remainder
of the program (the alternative interpretation).\114\ However, shortly
after both instances, EPA explained that the reinterpretation of the
second waiver prong in this manner is flawed and the alternative
interpretation is inappropriate, finding that the traditional
interpretation--in which EPA reviews the need for California's motor
vehicle program--is the best interpretation.\115\ In the SAFE 1
Reconsideration Decision, for example, the Agency evaluated the
traditional interpretation and the appropriateness of interpreting
section 209(b)(1)(B) in the same manner for all pollutants and provided
a textual analysis of why both section 209(b)(1)(A) and section
209(b)(1)(C) better support interpreting 209(b)(1)(B) as referring to
California's need for its mobile source emission program rather than to
California's need for a specific standard. EPA has not identified any
reason to revise the interpretation contained in the SAFE 1
Reconsideration Decision.\116\ Further, EPA's two FR Notices for the HD
waiver requests noted the intention to use the traditional
interpretation.\117\
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\113\ 73 FR 12156 (March 8, 2008); SAFE 1 at 51310.
\114\ SAFE 1. In SAFE 1, EPA withdrew a portion of the waiver it
had previously granted for California's Advanced Clean Cars (ACC)
program--specifically, the waiver for California's zero emission
vehicle (ZEV) mandate and the GHG emission standards within
California's ACC program. EPA based its action, in part, on its
determination that California did not need these emission standards
to meet compelling and extraordinary conditions, within the meaning
of section 209(b)(1)(B) of the CAA. That determination was in turn
based on EPA's adoption of a new, GHG-pollutant specific
interpretation of section 209(b)(1)(B). In any event, EPA expressly
stated that its new interpretation of section 209(b)(1)(B) only
applies to waiver requests for GHG emission-reducing standards, SAFE
1 at 51341, n. 263. Therefore, even under the SAFE 1 interpretation
(which EPA does not agree with for the reasons explained below and
in the SAFE 1 Reconsideration Decision), EPA's traditional
interpretation would still apply to this request given all of the
standards at issue are, in whole or in part, related to the
reduction of criteria pollutant emissions, or would otherwise meet
the SAFE 1 alternative interpretation test as it applied to GHG
emission.
\115\ 74 FR 32744 (July 8, 2009); SAFE 1 Reconsideration
Decision at 14333-34, 14352-55, 14358-62.
\116\ Id.
\117\ See 87 FR 35765, 3767 (June 13, 2022).
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2. CARB's Discussion of California's Need for the Standards in the
Waiver Requests
a. 2018 HD Warranty Amendments
As noted above, CARB maintained that the 2018 HD Warranty
Amendments are an accompanying enforcement procedure and, as such, the
second waiver prong at section 209(b)(1)(B) does not apply to the
waiver analysis for this regulation. Alternatively, if EPA deems that
the 2018 HD Warranty Amendments are standards subject to all three
waiver prongs, then CARB maintained that the regulations meet the
second waiver prong.\118\ CARB also noted the same conclusion applies
whether this request involves a new waiver (as EPA has determined) or
(in the alternative), a within-the-scope determination.
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\118\ 2018 HD Warranty Amendments Waiver Support Document at 23-
25. CARB noted that ``[t]he 2018 HD Warranty Amendments are
projected to reduce statewide NO<INF>X</INF> and PM emissions by
0.75 tons per day (tpd) and 0.008 tpd respectively, by 2030.
NO<INF>X</INF> emissions are projected to decrease in the South
Coast Air Basin and in the San Joaquin Valley Air Basins by 0.24 and
0.18 tpd, respectively, by 2030.'' Waiver Support Document at 2.
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b. ACT, ZEAS, and ZEP Certification Regulations
CARB provided similar context in its ACT Regulation, ZEAS
Regulation, and ZEP Certification Regulation waiver support document.
CARB noted that ``[t]hese three rulemaking actions individually and
collectively implement measures in California's State Implementation
Plan (SIP) that are needed for California to achieve compliance with
national ambient air quality standards and to reduce emissions of
greenhouse gases (GHGs).'' \119\ CARB noted that its Executive Officer
determined that ``California needs a separate motor vehicle emission
program to meet compelling and extraordinary conditions'' based in part
on a number of CARB Board findings and statements and information
contained in Staff Reports for the regulations.\120\ CARB also noted
that, even if an alternative interpretation of section 209(b)(1)(B)
requires an assessment of the need for individual emission standards,
CARB needs the ACT Regulation, ZEAS Regulation, and ZEP Certification
Regulation to address compelling and extraordinary conditions that
California faces from both criteria pollution and from climate change--
each regulation expressly requires categories of medium and heavy-duty
vehicles and their powertrains to emit no criteria or GHG pollutants,
thereby addressing these conditions in California. CARB further notes
that EPA has consistently found that California needs emission
standards to address criteria pollutants, and as each of these
standards reduces those pollutants EPA has no basis upon which to find
that California does not need the standards.\121\
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\119\ ACT/ZEAS/ZEP Waiver Support Document at 1.
\120\ ACT/ZEAS/ZEP Waiver Support Document at 22-25 (citing ACT/
ZEAS/ZEP Waiver Request).
\121\ Id. at 27 (``As discussed in Section I, the ACT regulation
is projected to reduce emissions of NO<INF>X</INF> by 6.9 tons per
day (tpd), and emissions of PM<INF>2.5</INF> by 0.24 tpd by 2031,
and the ZEAS regulation is projected to reduce emissions of
NO<INF>X</INF> by 7.60 tons per year (tpy) emissions of
PM<INF>2.5</INF> by 0.15 tpy, and emissions of GHGs by 81 MMT per
day of CO<INF>2e</INF> by 2031. By 2040, the ZEAS regulation is
projected to reduce emissions of NO<INF>X</INF> by 9.99 tpy,
emissions of PM<INF>2.5</INF> by 1.7 tpy, and emissions of GHGs by
107 MMT per day of CO<INF>2e</INF>. These emissions reductions will
assist California in its efforts to attain the national and state
ambient air quality standards for particulate matter and ozone,
reduce individual health risk, and meet climate change goals. EPA
has consistently found that California `needs' emissions standards
to address the compelling and extraordinary conditions resulting
from criteria pollutants, including emissions standards that
expressly specify limitations of emissions of GHGs, and therefore
has no basis to find that the regulations do not satisfy the
`compelling and extraordinary' criterion.'').
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3. Comments on Section 209(b)(1)(B)
EPA received several comments requesting a denial of the
regulations under the two HD waiver requests based on section
209(b)(1)(B) grounds--that ``such State does not need such State
standards to meet compelling and extraordinary conditions.'' Some
commenters asserted that the need for California's standards under the
second waiver prong should be interpreted on a standard-by-standard
basis. In the context of such an interpretation several commenters
claimed that one or more of the standards in the waiver requests were
not needed to meet compelling and extraordinary conditions.
Regarding the interpretive issue of whether EPA should evaluate a
need for the motor vehicle emission program versus an evaluation of the
need for a specific standard, EPA received a comment that raises
arguments that EPA has previously addressed in other waivers. For
example, this commenter claimed that EPA continues to incorrectly
interpret the waiver criteria in a manner that does not allow
evaluation of each new California emission standard. The commenter
asserted that EPA conflates the protectiveness criteria with the
``Needs Test'' in section 209(b)(1)(B).\122\ This

[[Page 20701]]

commenter also asserted that EPA's traditional interpretation of the
second waiver prong grants California with preferential regulatory
treatment ``by rubber-stamping every regulatory change CARB makes'' and
thus violates the equality of the states under the Equal Sovereignty
doctrine and also raises questions of vast economic and political
significance.\123\
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\122\ Texas Public Policy Foundation at 2-4. This commenter also
asserted that legislative intent does not justify EPA's
interpretation and that because California must submit a new waiver
request each time it alters or adds emission standards that
California must also demonstrate a need for such standards--a test
different from whether California continues to need its motor
vehicle emission program.
\123\ Id. at 3. See also AFPM at 16 (``[T]he `whole program'
approach would effectively force EPA to grant a waiver for any later
standard California proposes once EPA decided initially that
California `needs' its own motor vehicle program to address criteria
pollution. EPA decisions made in the 1970s would tie EPA's hands
more than 50 years later and force approval of whatever new
regulation CARB proposes for a waiver.'').
---------------------------------------------------------------------------

EPA also received comments that there cannot be a need for GHG- and
climate change-related standards (the ACT and ZEAS Regulations) under
the second waiver prong. One commenter stated that the causes and
effect of climate change are global, not local in nature, and therefore
California does not need standards addressing climate change under the
second waiver prong. Drawing on principles of equal sovereignty, one
commenter asserted that section 209(b) is ``unconstitutional to the
extent it is construed to allow California to set emission standards
aimed at addressing global climate change, as opposed to California's
local conventional pollution problems.'' \124\ As such, the commenter
argued that California cannot need GHG standards because, unlike
criteria pollutant emissions, GHG emissions in California ``bear no
relation'' to ``California-specific circumstances'' like the local
conditions identified by Congress in enacting section 209.\125\ The
commenter also argued that California does not need the ACT or ZEAS
Regulations because the harms of climate change are not unique to
California and cannot be alleviated by regulating emissions from
sources in one state alone. Similarly, another commenter argued that,
because climate change is a global issue, a single-state standard will
be less effective and more disruptive to the economy than a Federal
rule will.\126\ One commenter also asserted that, within the context of
the alternative interpretation, California only needs to reduce
criteria air pollution in two air districts and cannot therefore
``need'' statewide standards.\127\
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\124\ AFPM at 2. To the extent that this commenter also argued
that section 209(b) is ``unconstitutional in all its applications''
because it violates the equal sovereignty doctrine, that argument is
addressed in section III.E.2.
\125\ Id. at 6-7.
\126\ ATA at 6-7.
\127\ Texas Public Policy Foundation at 3.
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In its own comments, CARB noted that California needs to reduce
criteria pollution along major roadways throughout many parts of the
State and that even if California only needed to reduce criteria
pollutants in the two districts with the worst overall air quality,
statewide standards are still needed due to trucks travelling from one
part of the State to these districts.\128\ CARB noted that EPA has
consistently found these challenges, and the conditions that give rise
to them, are ``extraordinary and compelling'' and thus that California
needs a separate new motor vehicle emissions program.\129\ CARB
explained that its ZEV requirements (i.e., the ACT Regulation, ZEAS
Regulation, and ZEP Certification Regulation) will result in no
tailpipe emissions, reduced brake wear PM emissions, and lower upstream
emissions. As such, CARB stated that, at a minimum, California
``needs'' its ZEV requirements to achieve reductions in criteria
pollution emissions including in extreme nonattainment areas and other
areas overburdened by unhealthy air quality.\130\
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\128\ CARB Supplemental Comments at 5-6, n.36. See also CARB
Initial ACT/ZEAS/ZEP Comments at 11, 14-15 ((``[B]oth the South
Coast and San Joaquin Valley air districts--which are home to over
half of California's population--are classified as `extreme
nonattainment areas for the 2008 eight-hour federal ozone
standard.''') (``Indeed, California has the only extreme
nonattainment regions for ozone in the country, and the San Joaquin
Valley has the highest PM<INF>2.5</INF> levels in the country.'').
\129\ CARB Initial ACT/ZEAS/ZEP Comments at 14.
\130\ Id. See also Environmental and Public Health Organizations
at 31-33 (``California continues to experience some of the worst air
quality in the nation. The South Coast and San Joaquin Valley Air
Basins are in non-attainment of the national ambient air quality
standards for PM<INF>2.5</INF> and ozone. The South Coast has never
met any of the federal ozone standards established pursuant to the
Clean Air Act. . . California also faces compelling and
extraordinary climate change impacts. With each passing year, the
dangers of climate change and health-harming air pollution become
more and more clear. Climate change worsens the effects of local
pollutants: in addition to a severe increase in deadly wildfires and
accompanying particulate pollution, increasing heat favors the
formation of additional ozone, putting compliance with the ozone
NAAQS further out of reach.''); SCAQMD at 1 (``The South Coast Air
Basin continues to face extraordinary air pollution challenges . . .
The area is nonattainment for fine particulates and classified
`extreme' for ozone nonattainment. . . . To highlight one aspect of
one of the regulations, the Zero Emission Airport Shuttle Bus
regulation will promote the use of zero-emission airport grand
transportation at California's commercial airports. The South Coast
Air Basin happens to be home to five commercial airports. Among many
necessary initiatives for attainment of the NAAQS, Southern
California simply needs zero-emission airport transportation to
succeed.'').
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EPA also received comments that California does not need the
individual regulations in the waiver requests (as a factual matter)
because there are other, more ``robust'' or ``logical'' existing or
proposed standards and/or because these standards will not be effective
in reducing criteria emissions. Regarding the 2018 HD Warranty
Amendments, EPA received comment that California does not need such
amendments because CARB's Heavy-Duty Inspection & Maintenance Program
is more effective and because EPA's HD 2027 rule (``a 50-state
harmonized approach'') would soon be finalized.\131\ EPA also received
comment that California does not need the ACT Regulation because they
may actually increase criteria emissions by making new trucks more
expensive and slowing fleet turnover.\132\
---------------------------------------------------------------------------

\131\ ATA at 5-6.
\132\ AFPM at 2-3.
---------------------------------------------------------------------------

4. California Needs Its Standards To Meet Compelling and Extraordinary
Conditions
With respect to the need for California's standards to meet
compelling and extraordinary conditions, EPA continues to apply the
traditional interpretation of the waiver provision.\133\ Many of the
adverse comments arguing against the traditional interpretation were
also made in the SAFE 1 Reconsideration proceeding. EPA's response to
applicable comments on these arguments remains the same as in the SAFE
1 Reconsideration decision, and the Agency incorporates the relevant
reasoning in that action here.\134\
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\133\ EPA's two notices for comment on CARB's waiver requests
noted that the review under the second waiver prong would be done
under this traditional interpretation. EPA has not reopened this
interpretive issue by these notices nor by this final decision.
\134\ 87 FR 14332, 14334, 14352-55, 14358-62 (March 14, 2022).
---------------------------------------------------------------------------

As stated above and similar to the SAFE 1 Reconsideration decision,
EPA continues to believe the best way to interpret this provision is to
determine whether California continues to have compelling and
extraordinary conditions giving rise to a need for its own new motor
vehicle emission program.\135\ EPA believes this continues

[[Page 20702]]

to be true for section 209(b)(1)(B), which was at issue in the SAFE 1
Reconsideration action.\136\ EPA finds that California has demonstrated
that it needs its program to address compelling and extraordinary
conditions, those arising from criteria pollution and separately, those
arising from greenhouse gases. No comments have provided an analytical
basis for undermining California's need.\137\
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\135\ To the extent comments contend that EPA's interpretation
of the second waiver prong provides preferential treatment to
California over other States, EPA notes that the review of CARB
waiver requests is limited to the criteria set forth in section 209
and that we need not engage in an Equal Sovereignty constitutional
law analysis. (See SAFE 1 Reconsideration Decision at 14376). In any
case, for the purposes of reviewing the second waiver prong, EPA
incorporates the reasoning from the SAFE 1 Reconsideration Decision
at 14360. As such, EPA evaluates CARB's waiver requests based solely
on the criteria in section 209(b)(1) and does not consider factors
outside of those statutory criteria, including constitutional
claims. EPA continues to note that Congress struck a reasonable
balance in authorizing two standards (EPA's and California's if
certain criteria are met) but that that equal sovereignty principle
simply does not fit in section 209. EPA further addresses the
commenter's concerns relating to the Equal Sovereignty doctrine in
the Other Issues section below. Similarly, to the extent that
commenters contend that EPA's traditional interpretation raises
questions of vast economic and political significance where Congress
must speak clearly, EPA believes that this doctrine is inapplicable.
That doctrine posits that in certain extraordinary cases, Congress
should not be presumed to delegate its own authority over matters of
vast economic and political significance to Federal agencies in the
absence of clear statutory authorization. These concerns have no
logical connection to provisions that preserve state authority in
areas that fall within the police powers of states, such as the
protection of the environment. Further, EPA has consistently
explained that section 209(b)(1) of the Act limits the Agency's
authority to deny California's requests for waivers to the three
criteria contained therein and as such the Agency has consistently
refrained from reviewing California's requests for waivers based on
any other criteria. EPA acknowledges that California adopts its
standards as a matter of law under its state police powers, that the
Agency's task in reviewing waiver requests is limited to evaluating
California's request according to the criteria in section 209(b).
Furthermore, the language of section 209 provides clear statutory
authorization for the waiver framework, and the history of section
209(b) and (e) provide additional evidence that Congress intended
for California to have great deference in designing its own vehicle
program. MEMA I, 627 F.2d at 1111.
\136\ EPA notes that if Congress had been concerned with only
California's smog problems when it enacted section 209(b) in 1967 it
would have limited California's ability to obtain a waiver to
standards for only hydrocarbons and NO<INF>X</INF>, which are the
known automotive pollutants that contribute to California's smog
problem. But Congress was aware that California would most likely
decide to regulate other non-smog forming pollutants. ``[T]he total
program for control of automotive emissions is expected to include
[in addition to hydrocarbons and oxides of nitrogen] carbon
monoxide, lead and particulate matter.'' 123 Cong. Rec. 30951
(November 2, 1967) (Remarks of Rep. Herlong). Further, Congress
intended that California would serve as a pioneer and a laboratory
for the nation in setting new motor vehicle emission standards and
developing control technology, which extends to ZEVs, BEVs, FCVs and
PHEVs. ``The waiver of preemption is for California's ``unique
problems and pioneering efforts.'' S. Rep. No. 403, 90th Cong., 1st
Sess. 33 (1967); 113 Cong. Rec. 30950, 32478 (``[T]he State will act
as a testing agent for various types of controls and the country as
a whole will be the beneficiary of this research.'') (Statement of
Sen. Murphy). Thus, for example, in the 1990 Amendments Congress
mandated California's LEV program, which includes the ZEV program,
in its State Implementation Plan provision regarding fleet programs
required for certain non-attainment areas relating to issuing
credits for innovative and cleaner vehicles. Specifically,
``standards established by the Administrator under this paragraph .
. . shall conform as closely as possible to standards which are
established for the State of California for ULEV and ZEV vehicles in
the same class. Section 246(f)(4). (``[W]hen it amended the Act in
1990, [Congress recognized] California's LEV program, including the
ZEV mandate. See e.g., Act sections 241(4), 243(f), 246(f)(4).''
MVMA, 17 F.3d at 536.) See also 87 FR at 14360.
\137\ EPA notes that CARB ACT Regulation is only regulating
emissions from new motor vehicles and that such standards are the
types preempted under section 209(a). Section 209(b) requires EPA to
waive such standards unless one or more of the specified criteria
are found. CARB's ACT Regulation is focused on emissions of air
pollutants from this vehicle source and to EPA's knowledge is not
designed to address a broader set of transportation and energy
issues nor is the scope of the waiver criteria in section 209
designed for such a broad and searching review.
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Although nothing in the statutory text limits California's program
or the associated waivers to a certain category of air pollution
problems, EPA notes that each of the regulations contained in the two
waiver requests from CARB is clearly designed to address emissions of
criteria pollutants and will have that effect, regardless of whether
some also reduce greenhouse gases. As such, these standards are no
different from all prior standards addressing criteria emissions that
EPA has found to satisfy the section 209(b)(1)(B) inquiry. In any case,
there is no statutory basis to suggest that GHG emissions should be
treated any differently.
Further, it is inappropriate for EPA to second-guess CARB's policy
choices and objectives in adopting its heavy-duty vehicle and engine
standards designed to achieve long term emission benefits for both
criteria emissions and greenhouse gas emissions. EPA's longstanding
practice, based on the statutory text, legislative history, and
precedent, calls for deference to California in its approach to
addressing the interconnected nature of air pollution within the state.
Critically, EPA is not to engage in ``probing substantive review'' of
waiver requests,\138\ but rather to ``afford California the broadest
possible discretion in selecting the best means to protect the health
of its citizens and the public welfare.'' \139\
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\138\ Ford Motor, 606 F.2d 1293, 1300 (D.C. Cir. 1979).
\139\ MEMA II, 142 F.3d 449, 453 (D.C. Cir. 1998).
---------------------------------------------------------------------------

As noted above, the term compelling and extraordinary conditions
``does not refer to the levels of pollution directly.'' \140\
California continues to experience compelling and extraordinary
conditions that cause it to need a separate motor vehicle emissions
program. These include geographical and climatic conditions (like
thermal inversions) that, when combined with large numbers and high
concentrations of automobiles, create serious air pollution
problems.\141\ For example, as stated in CARB's waiver request and
additional written comment, California and particularly the South Coast
and San Joaquin Valley Air Basins continue to experience some of the
worst air quality in the nation and continue to be in nonattainment
with several NAAQS.\142\ In the context of these serious and long-
lasting pollution challenges, California has demonstrated that every
reduction in ozone precursor and particulate emissions is particularly
critical.
---------------------------------------------------------------------------

\140\ 49 FR 18887, 18890 (May 3, 1984).
\141\ In response to commenters that believe that the
traditional interpretation is simply a ``rubber-stamp[ ]'' because
EPA has already once decided that California ``needs'' its own motor
vehicle program, EPA notes that although California has yet to
resolve its pollution problems, that does not mean it will never do
so or that Congress could not aim for that goal. See 87 FR at 14336
n.22. So long as those problems persist, however, EPA's affirmance
of California's need for a separate vehicle program allows
California to continue to serve as a ``laboratory'' for resolving
its own pollution problems and those of the entire nation. See MEMA
I, 627 F.2d at 1109-11.
\142\ See, e.g., CARB Supplemental Comments at 5-6, n.36; CARB
Initial ACT/ZEAS/ZEP Comments at 11, 14-15; SJVUAPCD at 2 (``Despite
achieving significant emissions reductions through decades of
implementing the most stringent stationary and mobile regulatory
control program in the nation, significant additional reductions in
nitrogen oxide (NO<INF>X</INF>) emissions are needed to attain the
latest health-based National Ambient Air Quality Standards (NAAQS)
for ozone and PM<INF>2.5</INF>.''); State of California et al at 12-
13 (``Sixteen of the 8-hour ozone nonattainment areas are located in
California and the only two extreme nonattainment areas in the
nation are located in the South Coast Air Basin and San Joaquin
Valley of California. Indeed, for the South Coast Air Basin to meet
the federal ozone standards, overall NO<INF>X</INF> emissions need
to be reduced by 70 percent from today's levels by 2023, and
approximately 80 percent by 2031.''); Environmental and Public
Health Organizations at 32 (``California continues to experience
some of the worst air quality in the nation. The South Coast and San
Joaquin Valley Air Basins are in non-attainment of the national
ambient air quality standards for PM<INF>2.5</INF> and ozone. The
South Coast has never met any of the federal ozone standards
established pursuant to the Clean Air Act . . . [H]eavy-duty
vehicles represent the largest source of NO<INF>X</INF> emissions
reductions needed to attain the 2015 8-hour ozone National Ambient
Air Quality Standards (NAAQS), and California's air quality
regulations, like those at issue here, are central to the state's
attainment strategy for the South Coast Air Basin.'').
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In addition, EPA did not receive any adverse comments suggesting
that California no longer needs a separate motor vehicle emissions
program to address the various conditions that lead to serious and
unique air pollution problems in California. EPA did receive comment
that contends that California does not have a need for its standards as
only two areas in the State (the San Joaquin Valley and the South
Coast)

[[Page 20703]]

have serious air quality issues. EPA believes this commenter misses the
mark for several reasons. The commenter provided no legal rationale for
limiting the ``compelling and extraordinary conditions'' to those
conditions experienced by all of California. In addition, California is
responsible, in part, for developing State Implementation Plan (SIP)
measures to address nonattainment and maintenance and EPA sees no basis
to deny a waiver for regulations designed at the state level and that
address emission sources that move around the state. Nor has the
commenter provided sufficient data or analysis to demonstrate that
other areas of California do not need the motor vehicle standards
program to address compelling and extraordinary conditions. Based on
the record, EPA is unable to identify any change in circumstances or
any evidence to undermine EPA's prior findings that California needs
its motor vehicle emissions program to address compelling and
extraordinary conditions. Therefore, using the traditional approach of
reviewing the need for a separate California program to meet compelling
and extraordinary conditions, EPA cannot deny any of the waiver
requests.
Further, EPA does not believe, to the extent that it is appropriate
to examine the need for CARB's individual heavy-duty vehicle and engine
standards to meet compelling and extraordinary conditions, that the
opponents of the waiver requests have met their burden of proof that
California does not need these standards. The record demonstrates that
each regulation in the two waiver requests is designed to produce
reductions in criteria emissions that continue to be a serious air
quality concern in California, which is a result of its compelling and
extraordinary conditions. While EPA believes that CARB has demonstrated
the criteria emission reductions associated with its ACT, ZEAS, and ZEP
Certification Regulations and therefore a need for such standards, EPA
also believes that, to the extent such standards are designed to also
address climate change conditions in California, such standards are
needed to meet compelling and extraordinary conditions.\143\ EPA notes
that the record contains evidence that global warming continues to pose
an extraordinary threat to the economic well-being, public health,
natural resources and environment in California. These adverse impacts
include exacerbation of local air quality problems, severe wildfires,
extreme drought, acidification threats to marine ecosystems as carbon
dioxide is absorbed by the ocean along California's coastline, and a
host of other impacts.\144\ EPA believes the same conditions and
impacts assessed in the SAFE 1 Reconsideration Decision apply to this
waiver decision and incorporates that analysis here.\145\
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\143\ 87 FR 14332, 14365-66 (March 14, 2022).
\144\ California Supplemental ACT Comments at 16-17, California
also noted that the ACT Regulation will ensure the development and
commercialization of technology required to achieve further emission
reductions to address climate changes and to attain national ambient
air quality standards (NAAQS) in California.
\145\ 87 FR 14332, 14334, 14352-55, 14358-62.
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Regarding comments received that the 2018 HD Warranty Amendments
are not needed because EPA's HD 2027 rule and CARB's Heavy-Duty
Inspection & Maintenance Program are or will be more effective, EPA
notes that California is entitled to substantial deference in its
policy choices regarding the best path to address its air pollution
problems, including the choice to adopt or retain emission standards
that overlap with previous California standards and EPA's
standards.\146\ In the context of these arguments about effectiveness,
it is important to note that under the statute, California's standards
in the aggregate must be as protective as EPA's standards--there is no
requirement that they be more protective. This reinforces the deference
owed to California in its determination of whether it needs a
particular configuration of standards as its program to address
compelling and extraordinary conditions. In response to comments
received that the specific regulations are not necessary (as a factual
matter) because they may slow fleet turnover, EPA finds that these
commenters have not met their burden of proof to demonstrate that such
a result in fleet turnover will occur and that if it did occur, it
would cause an increase in emissions. Commenters have also failed to
demonstrate that California does not continue to need every reduction
in criteria pollutant emissions it can obtain.\147\ As EPA continues to
believe California has compelling and extraordinary conditions, it is
appropriate for EPA to continue giving substantial deference to
California's policy choices on how it chooses to protect public health
and welfare and achieve its air quality objectives.
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\146\ See, e.g., 78 FR at 2129 (``The Commenter . . . relies on
the existence of the federal GHG standards and the `deemed to
comply' language to claim that there is no need for CARB's GHG
standards . . . EPA believes that the commenter does not
appropriately appreciate the role that Congress envisioned
California to play as an innovative laboratory that may set
standards that EPA may ultimately harmonize with or that California
or EPA may otherwise accept compliance with the others emission
program as compliance with their own.''). In addition, given that
there are a variety of regulatory measures and levels of stringency
that California may choose to address the durability of emission
controls on vehicles and engines while in use, and the lack of
evidence in the record that an inspection and maintenance program is
more protective than a warranty regulation (or that both may be
implemented at some point), EPA finds that opponents of the waiver
have not met their burden of proof with evidence to support their
policy preference on an inspection and maintenance program.
\147\ CARB Supplemental Comments at 5-6 (``But AFPM provides no
evidence that ACT will slow fleet turnover at all, let alone to the
degree necessary to increase pollution. And none of these comments
refutes CARB's conclusion that zero-emission vehicles placed into
well-suited applications will be less expensive, over their
lifetimes, than conventional ones, or explains why the requirement
to sell a certain percentage of vehicles that will save owners or
operators money would slow turnover to the (unspecified) extent
required to increase emissions. Moreover, the recently passed
Inflation Reduction Act includes numerous financial incentives that
will decrease the cost of zero-emission heavy-duty vehicles, further
undercutting the claim that the high costs of those vehicles will
slow fleet turnover.'').
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5. Section 209(b)(1)(B) Conclusion
As previously explained, EPA believes that the traditional
interpretation of the section 209(b)(1)(B) criterion is the best
reading of the statute.\148\ The traditional approach is for EPA to
evaluate California's need for a separate motor vehicle emission
program to meet compelling and extraordinary conditions. The issue of
whether any particular standard is needed is not the inquiry directed
under section 209(b)(1)(B). Applying the traditional approach of
assessing California's need for a separate motor vehicle emissions
program to address compelling and extraordinary conditions, with the
reasoning noted above and with due deference to California, EPA cannot
deny the respective waiver requests. CARB has repeatedly demonstrated
the need for its motor vehicle program to address compelling and
extraordinary conditions in California and opponents of the waiver
requests have not demonstrated that California does not need its state
standards to meet compelling and extraordinary conditions. Therefore, I
determine that I cannot deny either of the waiver requests under
section 209(b)(1)(B).
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\148\ 87 FR 14332, 14334, 14352-55, 14358-62 (March 14, 2022).
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In addition, although EPA does not believe an interpretation that
requires a demonstrated need for a specific standard is appropriate,
EPA's review of the complete record indicates that opponents of the
waiver requests have not met the burden of proof necessary to
demonstrate that California does not

[[Page 20704]]

need its ACT Regulation, ZEAS Regulation, ZEP Certification Regulation,
and the 2018 HD Warranty Amendments when assessed individually.

D. Third Waiver Criterion: Are California's Regulations Consistent With
Section 202(a) of the Clean Air Act?

Under section 209(b)(1)(C), EPA must grant California's waiver
request unless the Agency finds that California's standards and
accompanying enforcement procedures are not consistent with section
202(a) of the Act. EPA's longstanding approach to this third waiver
criterion is limited to reviewing California's feasibility assessment
and evaluating whether the opponents of the waiver have met their
burden of establishing: (1) That California's standards are
technologically infeasible, or (2) that California's test procedures
are inconsistent with the Federal test procedures. As with the other
two criteria, our review is narrow and deferential to California.
Each of CARB's two waiver requests contained a demonstration that
its standards in each request were based on technologies currently
available or reasonably projected to be available in the lead time
given and giving consideration to costs. As such, CARB argued that its
standards did not create any issues regarding the consistency with
section 202(a) requirements. CARB's waiver requests included their
state rulemaking records for each standard, including CARB's detailed
responses to any issues raised regarding technological feasibility.
Commenters opposed to the waiver did not argue that the 2018 HD
Warranty Amendments were not technologically feasible or that any of
the waiver requests presented inconsistent test procedures. Further,
while EPA received comment to suggest that CARB's ACT Regulation and
ZEAS Regulation were not appropriate policy choices, to the extent
commenters raised feasibility issues regarding the ACT Regulation and
ZEAS Regulation, such commenters either failed to meet the burden of
proof to demonstrate infeasibility in light of California's
demonstration of feasibility or such comments fell beyond the scope of
EPA's technological feasibility review. As explained in detail below,
based on our examination of the record, EPA finds that the commenters
have failed to meet their burden of proof as to the third prong.
In addition, certain commenters asserted that, even if the
standards were actually feasible, EPA should nonetheless deny the
waiver based on the lead time and stability requirements for certain
federal heavy-duty vehicle standards found in section 202(a)(3)(C) of
the Act. These commenters claim that because the third waiver criterion
requires California's standards to be ``consistent with'' section
202(a), California must necessarily comply with section 202(a)(3)(C),
as that is a sub-provision of 202(a). This argument is inconsistent
with the plain text of the statute. Congress used the phrase
``consistent with,'' not ``compliant with.'' The statutory phrase
``consistent with'' indicates that California's standards should be
congruent and compatible with section 202(a), which requires that
Federal standards provide adequate lead time and consider cost. Thus,
EPA interprets this prong of the waiver analysis to require
California's standards to be feasible. The statute does not, however,
obligate California to comply with provisions of section 202(a)
directed solely at the development and design of federal standards.
This would make little sense given Congress' intent to set up two motor
vehicle programs in title II--with California's program dedicated to
address the state's air quality problems and serve as a testing ground
for motor vehicle emissions policy designs and technologies. If exactly
the same requirements and conditions apply to both the Federal and the
California programs, then they would necessarily overlap extensively if
not completely, and California could not serve as the testing ground
that Congress intended. Further, applying some of the language in
202(a) to California standards would directly conflict with the text
and intent of the waiver provisions in section 209. For those reasons,
for over five decades, EPA has consistently granted waivers to
California without assessing compliance with section 202(a)(3)(C), with
a single exception (in 1994).
The commenters' argument regarding section 202(a)(3)(C) fails for a
number of additional reasons. That provision, which requires at least
four years of lead time and three years of stability, is a companion to
a specific Federal standard-setting mandate, section 202(a)(3)(A). That
mandate is for EPA to promulgate certain heavy-duty criteria pollutant
standards that reflect the greatest degree of emission reduction
achievable giving appropriate consideration to a number of factors.
Congress paired the mandated stringency with the lead time and
stability requirements. By contrast, California may adopt state
standards that are ``in the aggregate'' at least as protective as the
Federal standards. As such, California is also not obligated to comply
with either the maximum stringency requirements or the companion lead
time provision in section 202(a)(3)(C) to provide the four years of
lead time and three years of stability that Congress determined was
needed for the federal market.
This plain text reading is well-supported by the history and
purpose of the Act and is also consistent with administrative and
judicial precedents. Commenters rely heavily on EPA's single contrary
decision in a 1994 medium-duty vehicle waiver (1994 MDV waiver) even
though the interpretation contained in that decision was inconsistent
with EPA's historical practice in waiver decisions both before and
after 1994.\149\ Indeed, by 2012 EPA had indicated that it did not
believe section 202(a)(3)(C) applied to California's heavy-duty engines
and vehicle standards and issued a decision consistent with its
historical practice.\150\ We acknowledge that the 1994 MDV waiver took
a different position on this issue than we do today, but as explained
below, we believe that our practice, both before and after the 1994 MDV
waiver, represents the best understanding of the statute. Importantly,
the interpretation in the 1994 MDV waiver is inconsistent with the
plain text of the statute, as discussed below. In this action, EPA is
therefore taking an approach similar to its approach both before and
after the 1994 MDV waiver, and different from the 1994 MDV waiver.\151\
EPA believes that its historical practice and application of the
``consistency with section 202(a)'' language is permissible and is the
best interpretation of the statute based on all the relevant factors.
Additionally, commenters also mistakenly rely on the D.C. Circuit's
opinion in American Motors Corp. v. Blum, 603 F.2d 978 (D.C. Cir. 1979)
(Blum). Blum addressed a different provision of the CAA and is
distinguishable from the instant waivers.
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\149\ See 77 FR 9239, 9249 (February 16, 2012); 46 FR 22302,
22304 (1981).
\150\ 77 FR at 9239. Moreover, in October 2000, EPA informed
California of the intent to ``conduct a new evaluation of . . .
arguments . . . in regard to whether the lead time provisions of the
Act apply to California. . . . [As well as] evaluate the
applicability of the stability requirement in Section
202(a)(3)(C).'' Letter from Margo Oge, Director, Office of
Transportation and Air Quality, to Michael Kenny, CARB Executive
Officer (Oct. 24, 2000).
\151\ FCC v. Fox Television Stations, Inc., 556 U.S. 502 (2009).
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The balance of this section begins with a discussion of EPA's
longstanding approach to the third waiver criterion and relevant case
law (III.D.1). We then

[[Page 20705]]

summarize the positions of CARB and the commenters (III.D.2 and III.D.3
respectively). Subsequently, we evaluate the waiver requests under the
historical approach, finding that those opposed to the waiver have
failed to meet their burden of proof (III.D.4). We then explain why,
contrary to the commenters' arguments, the statutory lead time
requirements in section 202(a)(3)(C) do not apply to California
(III.D.5). A brief conclusion follows (III.D.6).
1. Historical Interpretation of Section 209(b)(1)(C)
Under section 209(b)(1)(C), EPA must grant California's waiver
request unless the Agency finds that California standards and
accompanying enforcement procedures are ``not consistent'' with section
202(a) of the Act.\152\ Section 202(a)(1) grants EPA authority to
regulate motor vehicle emissions generally and the accompanying section
202(a)(2) specifies that those standards are to ``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.'' \153\ Thus, no specific lead time requirement applies to
standards promulgated under section 202(a)(1). EPA has long limited its
evaluation of whether California's standards are consistent with
section 202(a) to determining if: (1) There is inadequate lead time to
permit the development of the necessary technology giving appropriate
consideration to the cost of compliance within that time period; \154\
or whether (2) California and Federal test procedures are incompatible
so that a single vehicle could not be subjected to both tests.\155\ EPA
has also explained that ``the import of section 209(b) is not that
California and Federal standards be identical, but that the
Administrator not grant a waiver of Federal preemption where compliance
with the California standards is not technologically feasible within
available lead time.'' \156\ Further, EPA's review is limited to the
record on feasibility of the technology. Therefore, EPA's review is
narrow and does not extend to whether the regulations under review are
the most effective or whether the technology incentivized by
California's regulations are the best policy choice or better choices
should be evaluated. The Administrator has thus long explained that
``questions concerning the effectiveness of the available technology
are also within the category outside my permissible scope of inquiry,''
under section 209(b)(1)(C).\157\ California's accompanying enforcement
procedures would also be inconsistent with section 202(a) if the
Federal and California test procedures conflicted, i.e., if
manufacturers would be unable to meet both the California and Federal
test requirements with the same test vehicle.
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\152\ EPA must grant a waiver request unless it finds that there
is: ``[i]nadequate time to permit the development of the necessary
technology given the cost of compliance within that time period.''
H. Rep. No. 728, 90th Cong., 1st Sess. 21 (1967). ``That California
standards are not consistent with the intent of section 202(a) of
the Act, including economic practicability and technological
feasibility.'' S. Rep. No. 403, 90th Cong. 1st Sess. 32 (1967).
\153\ CAA section 202(a)(2); H.R. Rep. No. 95-294, 95th Cong.,
1st Sess. 301 (1977) (``Also preemption could not be waived if
California standards and enforcement procedures were found not to be
`consistent with section 202(a)' (relating to the technological
feasibility of complying with these standards).'').
\154\ Previous waivers of Federal preemption have thus stated
that California's standards are not consistent with section 202(a)
if there is inadequate lead time to permit the development of
technology necessary to meet those requirements, giving appropriate
consideration to the cost of compliance within that time. See e.g.,
36 FR 8172 (April 30, 1971) (HD MY 1972 and later MY); 38 FR 30136
(Nov. 1, 1973); 40 FR 23102, 23105 (May 28, 1975) (extending waiver
of April 30, 1971, to MY 1975 HD standards); 40 FR 30311 (July 18,
1975); 70 FR 50322 (August 26, 2005) (2007 California Heavy-Duty
Diesel Engine Standards); 71 FR 335 (Jan. 4, 2006) (2007 Engine
Manufacturers Diagnostic standards); 77 FR 9239 (February 16, 2012)
(HD Truck Idling Requirements); 79 FR 46256 (Aug. 7, 2014) (the
first HD GHG emissions standard waiver, relating to certain new 2011
and subsequent model year tractor-trailers); 81 FR 95982 (December
29, 2016) (the second HD GHG emissions standard waiver, relating to
CARB's ``Phase I'' regulation for 2014 and subsequent model year
tractor-trailers); 82 FR 4867 (January 17, 2017) (On-Highway Heavy-
Duty Vehicle In-Use Compliance Program).
\155\ To be consistent, the California certification procedures
need not be identical to the Federal certification procedures.
California procedures would be inconsistent, however, if
manufacturers would be unable to meet the state and the Federal
requirements with the same test vehicle in the course of the same
test. See, e.g., 43 FR 32182 (July 25, 1978).
\156\ 46 FR 22032, 22034-35 (April 15, 1981).
\157\ 41 FR 44209, 44210 (October 7, 1976); 47 FR 7306, 7310
(February 18, 1982) (``I am not empowered under the Act to consider
the effectiveness of California's regulations, since Congress
intended that California should be the judge of `the best means to
protect the health of its citizens and the public welfare.'''
(Internal citations omitted)).
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In determining whether California standards are inconsistent with
section 202(a), EPA makes a finding as to whether there is inadequate
lead time to permit the development of technology that is necessary to
meet the standards for which a waiver is sought. For this finding, EPA
considers whether adequate technology is presently available or already
in existence and in-use. If technology is not presently available, EPA
will consider whether California has provided adequate lead time for
the development and application of necessary technology prior to the
effective date of the standards for which a waiver is being sought.
Additionally, the D.C. Circuit has held that ``[i]n the waiver context,
section 202(a) relates in relevant part to technological feasibility
and to federal certification requirements. The technological
feasibility component of section 202(a) obligates California to allow
sufficient lead time to permit manufacturers to develop and apply the
necessary technology. The federal certification component ensures that
the Federal and California test procedures do not impose inconsistent
certification requirements. Neither the court nor the agency has ever
interpreted compliance with section 202(a) to require more.'' \158\
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\158\ MEMA II, 142 F.3d 449, 463 (Emphasis added) (internal
citations omitted).
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Regarding the technology costs portion of the technology
feasibility analysis, when cost is at issue EPA evaluates the cost of
developing and implementing control technology in the actual time
provided by the applicable California regulations. The D.C. Circuit has
stated that compliance cost ``relates to the timing of a particular
emission control regulation.'' \159\ In MEMA I, the court addressed the
cost of compliance issue at some length in reviewing a waiver decision.
According to the court:
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\159\ MEMA v. EPA, 637 F.2d. 1118 (D.C. Cir. 1979).

Section 202's cost of compliance concern, juxtaposed as it is
with the requirement that the Administrator provide the requisite
lead time to allow technological developments, refers to the
economic costs of motor vehicle emission standards and accompanying
enforcement procedures. See S. Rep. No. 192, 89th Cong., 1st Sess.
5-8 (1965); H.R. Rep. No. 728 90th Cong., 1st Sess. 23 (1967),
reprinted in U.S. Code Cong. & Admin. News 1967, p. 1938. It relates
to the timing of a particular emission control regulation rather
than to its social implications. Congress wanted to avoid undue
economic disruption in the automotive manufacturing industry and
also sought to avoid doubling or tripling the cost of motor vehicles
to purchasers. It, therefore, requires that the emission control
regulations be technologically feasible within economic parameters.
Therein lies the intent of the cost of compliance requirement
(emphasis added).\160\
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\160\ MEMA I 627 F.2d at 1118 (emphasis added). See also id. at
1114, n.40 (``[T]he `cost of compliance' criterion relates to the
timing of standards and procedures.'').

Previous waiver decisions are fully consistent with MEMA I, which
indicates that the cost of compliance must reach a very high level
before the EPA can deny a waiver. Therefore, past decisions indicate
that the costs must be

[[Page 20706]]

excessive to find that California's standards are infeasible and
therefore inconsistent with section 202(a).\161\
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\161\ See, e.g., 47 FR 7306, 7309 (Feb. 18, 1982); 43 FR 25735
(Jun. 14, 1978); 46 FR 26371, 26373 (May 12, 1981).
---------------------------------------------------------------------------

Regarding the burden of proof under the third prong, EPA has
previously stated that the third prong's feasibility determination is
limited to: (1) Whether those opposed to the waiver have met their
burden of establishing that California's standards are technologically
infeasible, including whether they include adequate lead time or (2)
that California's test procedures impose requirements inconsistent with
the Federal test procedure. Additionally, the burden of proof regarding
the cost component of feasibility also falls upon the waiver opponents.
The scope of EPA's review under this criterion is also narrow.\162\
This is consistent with the motivation behind section 209(b) to foster
California's role as a laboratory for motor vehicle emission control,
in order ``to continue the national benefits that might flow from
allowing California to continue to act as a pioneer in this field.''
\163\ According to the D.C. Circuit, ``The history of congressional
consideration of the California waiver provision, from its original
enactment up through 1977, indicates that Congress intended the State
to continue and expand its pioneering efforts at adopting and enforcing
motor vehicle emission standards different from and in large measure
more advanced than the corresponding federal program; in short, to act
as a kind of laboratory for innovation.'' \164\ EPA has thus long
believed that California must be given substantial deference when
adopting motor vehicle emission standards because such action may
require new or improved technology to meet challenging levels of
compliance. Over 50 years ago, EPA's Administrator discussed this
deference in an early waiver decision that approved a waiver request
for California:
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\162\ 41 FR 44208, 44210 (October 7, 1976)(``While section
209(b) requires consideration of whether the adoption of standards
by California is consistent with section 202(a), nevertheless [the
Administrator's] discretion in determining whether to deny the
waiver is considerably narrower than [his] discretion to act or not
to act in the context promulgating Federal standards under section
202(a).'').
\163\ 40 FR 23102, 23103 (May 28, 1975) (waiver decision citing
views of Congressman Moss and Senator Murphy).
\164\ MEMA I, 627 F.2d 1095, 1110.

There is a well-established pattern that emission control
technology have been phased in through use in California before
their use nationwide. This pattern grew out of early recognition
that auto caused air pollution problems are unusually serious in
California. In response to the need to control auto pollution,
California led the nation in development of regulations to require
control of emissions. This unique leadership was recognized by
Congress in enacting federal air pollution legislation both in 1967
and 1970 by providing a special provision to permit California to
continue to impose more stringent emission control requirements than
applicable to the rest of the nation.\165\
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\165\ 38 FR 10317, 10324 (April 26, 1973) (``[T]he experience of
Federal and State officials as well as the industry itself in
meeting such standards for California will facilitate an orderly
implementation of the more stringent, catalyst-forcing standards for
California.'').

In a subsequent waiver decision approving a waiver request for
---------------------------------------------------------------------------
California, the Administrator stated:

It is worth noting . . . I would feel constrained to approve a
California approach to the problem which I might also feel unable to
adopt at the federal level in my own capacity as a regulator. The
whole approach of the Clean Air Act is to force the development of
new types of emission control technology where that is needed by
compelling the industry to ``catch up'' to some degree with newly
promulgated standards. Such an approach * * * may be attended with
costs, in the shape of a reduced product offering, or price or fuel
economy penalties, and by risks that a wider number of vehicle
classes may not be able to complete their development work in time.
Since a balancing of these risks and costs against the potential
benefits from reduced emissions is a central policy decision for any
regulatory agency under the statutory scheme outlined above, I
believe I am required to give very substantial deference to
California's judgments on this score.'' \166\
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\166\ 40 FR 23102, 23104 (May 28, 1975). See also 78 FR 2111,
2115-16 (Jan. 9, 2013); 79 FR 46256, 46258 (Aug. 7, 2014); 81 FR
95982, 95984 (Dec. 29, 2016).

In keeping with this deferential posture, as noted earlier, EPA's
historical interpretation of section 209(b) has also been to assess
whether California's program of motor vehicle emission standards as a
whole provides for adequate lead time consistent with section 202(a).
This is because EPA's long-standing interpretation is that the phrase
``State standards'' in section 209(b)(1) means the entire California
new motor vehicle emissions program.\167\ Similar to the second waiver
criterion, EPA has also historically viewed the third waiver
criterion's feasibility analysis as a whole-program assessment, i.e.,
one that ensures manufacturers have sufficient lead time to comply with
the program's standards as a whole, accounting for the interactions
between technologies necessary to meet both new and existing standards,
and any interactions between those technologies that would affect
feasibility.\168\ EPA's assessment under section 209(b)(1)(C) is thus
not in practice a standard-by-standard review. Rather it involves an
analysis of feasibility that builds on prior analyses of feasibility
and any impacts of the new standards on the feasibility of the
remainder of the program.\169\
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\167\ 74 FR 32744, 32749 (July 8, 2009); 70 FR 50322 (Aug. 26,
2005); 77 FR 9239 (Feb. 16, 2012); 78 FR 2112, 2123 (Jan. 9, 2013).
\168\ As a practical matter, EPA's consideration of the third
waiver prong, like the first waiver prong, does not necessitate in
every case that EPA re-review previously-approved aspects of
California's program--for example, where it is evident that new
standards will not interact with existing ones. But where a new
waiver request might affect one of EPA's previous assessments under
any of the waiver criteria, EPA reviews the program as a whole--or
any aspect necessary to confirm alignment with the statutory text.
87 FR at 14361 and n.266.
\169\ Id. at 14361. The feasibility assessment conducted for a
new waiver request focuses on the standards in that request but
builds on the previous feasibility assessments made for the
standards already in the program and assesses any new feasibility
risks created by the interaction between the standards in the
petition and the existing standards.
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EPA has also long recognized that the laboratory role and nature of
California's standards may result in California amending or revising
requirements after the grant of a waiver, or otherwise adjusting the
implementation of the waived standards as circumstances dictate.\170\
EPA's waiver practice when California amends a previously waived
standard or accompanying enforcement procedure is to consider whether
such an amendment is within the scope of a previously granted waiver or
requires a new waiver. If EPA considers the amendment as within the
scope of a prior waived standard, then the Agency reviews the amendment
to determine that it does not undermine California's determination that
its standards in the aggregate are as protective of public health and
welfare as applicable Federal standards, does not affect the
regulation's consistency with section 202(a), and raises no new issues
affecting EPA's previous waiver decisions.
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\170\ See e.g., 68 FR 19811 (April 22, 2003), 71 FR 78190
(December 28, 2006), 75 FR 44948 (July 30, 2006).
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Decisions from the D.C. Circuit provide guidance regarding the lead
time requirements of section 202(a). Section 202(a)(2) states that
``any regulation prescribed under paragraph (1) of this subsection (and
any revision thereof) shall take effect after such period as the
Administrator finds necessary to permit the development and application
of the requisite technology, giving appropriate

[[Page 20707]]

consideration to the cost of compliance within such period.'' For
example, in Natural Resources Defense Council v. EPA (NRDC), the court
reviewed claims that EPA's PM standards for diesel cars and light
trucks were both too stringent and not stringent enough. In upholding
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the EPA standards, the court concluded:

Given this time frame [a 1980 decision on 1985 model year
standards]; we feel that there is substantial room for deference to
the EPA's expertise in projecting the likely course of development.
The essential question in this case is the pace of that development,
and absent a revolution in the study of industry, defense of such a
projection can never possess the inescapable logic of a mathematical
deduction. We think that the EPA will have demonstrated the
reasonableness of its basis for projection if it answers any
theoretical objections to the [projected control technology],
identifies the major steps necessary in refinement of the
technology, and offers plausible reasons for believing that each of
those steps can be completed in the time available.\171\
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\171\ NRDC, 655 F.2d 318, 331 (D.C. Cir. 1981).

Another key case addressing the lead time requirements of section
202(a) is International Harvester v. Ruckelshaus (International
Harvester). In International Harvester, the court reviewed EPA's
decision to deny applications by several automobile and truck
manufacturers for a one-year suspension of the 1975 emission standards
for light-duty vehicles. In the suspension proceeding, the
manufacturers presented data which, on its face, showed little chance
of compliance with the 1975 standards, but which, at the same time,
contained many uncertainties and inconsistencies regarding test
procedures and parameters. In a May 1972 decision, the Administrator
applied an EPA methodology to the submitted data, and concluded that
``compliance with the 1975 standards by application of present
technology can probably be achieved,'' and so denied the suspension
applications.\172\ In reviewing the Administrator's decision, the court
found that the applicants had the burden of providing data showing that
they could not comply with the standards, and if they did, then EPA had
the burden of demonstrating that the methodology it used to predict
compliance was sufficiently reliable to permit a finding of
technological feasibility. In that case, EPA failed to meet this
burden.
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\172\ International Harvester v. Ruckelshaus, 478 F 2d. 615, 626
(D.C. Cir. 1979).
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In NRDC the court pointed out that the court in International
Harvester ``probed deeply into the reliability of EPA's methodology''
because of the relatively short amount of lead time involved (a May
1972 decision regarding 1975 MY vehicles, which could be produced
starting in early 1974), and because ``the hardship resulting if a
suspension were mistakenly denied outweigh[s] the risk of a suspension
needlessly granted.'' \173\ The NRDC court compared the suspension
proceedings with the circumstances concerning the diesel standards
before it: ``The present case is quite different; `the base hour' for
commencement of production is relatively distant, and until that time
the probable effect of a relaxation of the standard would be to
mitigate the consequences of any strictness in the final rule, not to
create new hardships.'' \174\ The NRDC court further noted that
International Harvester did not involve EPA's predictions of future
technological advances, but an evaluation of presently available
technology.
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\173\ NRDC, 655 F.2d 318, 330.
\174\ Id. The ``hardships'' referred to are hardships that would
be created for manufacturers able to comply with the more stringent
standards being relaxed late in the process.
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2. CARB's Discussion of the Regulations' Consistency With Section
202(a) in the Waiver Requests
Each of CARB's waiver requests demonstrated that its standards were
based on technologies currently available or reasonably projected to be
available in the lead time provided under each regulation, taking into
consideration costs and other factors. As such, CARB argued that its
standards did not create any issues regarding consistency with section
202(a) requirements. CARB's waiver requests included the state
rulemaking records for each standard, including CARB's response to any
issues raised regarding technological feasibility. In this section
III.D.2, we present CARB's arguments for each of its waiver requests in
turn. In the following section III.D.3, we present the commenters
arguments. EPA has reviewed the information submitted to the record of
this proceeding to determine whether the parties opposing the waiver
requests have met their burden to demonstrate that the respective
standards (and accompanying enforcement procedures) are not consistent
with section 202(a). As explained in subsection III.D.4 below, EPA has
evaluated each of the waiver requests under the test historically used
and is concluding that the opponents of the waiver requests have not
met the burden of proof regarding the third waiver prong. EPA also
discusses, in subsection III.D.5, why, contrary to the commenters'
arguments, the statutory lead time requirements in section 202(a)(3)(C)
do not apply to California.
a. 2018 HD Warranty Amendments
CARB's waiver request noted that the elements of the 2018 HD
Warranty Amendments that lengthen the warranty periods present no
issues regarding technical feasibility or lead time. At the outset,
CARB noted that although manufacturers are incentivized to produce and
use more durable emission related components and systems in 2022 and
beyond, the manufacturers are not compelled to do so. Because
manufacturers may elect to use their existing components to comply with
the regulations, CARB contended that EPA's prior findings of adequate
technical feasibility and lead time found within EPA's waiver for
California's 2007 and later model years remains applicable and
dispositive. CARB also noted that no commenters raised objections
regarding the feasibility and lead time of the extended emission
warranty periods during its rulemaking. CARB noted similar findings
regarding the new minimum allowable maintenance schedules. CARB also
noted its belief that it appropriately considered the costs of the 2018
HD Warranty Amendments and that it is not aware of any test procedure
consistency issues.\175\
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\175\ 2018 HD Warranty Amendments Support Document at 20-23.
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b. ACT, ZEAS, and ZEP Certification Regulations
CARB's ACT Regulation waiver request provided information
pertaining to consistency with section 202(a)'s feasibility
requirements for each of the three regulations covered by the request.
CARB noted that the ACT Regulation's requirements that new 2024 MY
medium- and heavy-duty ZEVs be produced and delivered for sale to
ultimate purchasers in California are consistent with section 202(a)
because the required technology already exists.\176\ CARB's waiver
request also

[[Page 20708]]

noted that the ACT Regulation implements the ZEV sales requirement
through a credit and deficit mechanism, whereby manufacturers' deficits
are generated commencing with the 2024 model year based, in part, on
their annual sales of onroad vehicles with gross vehicle weight ratings
(GVWRs) exceeding 8,501 pounds produced and delivered for sale in
California. Manufacturers may earn credits by producing and delivering
for sale, to ultimate consumers in California, certain types of ZEV
vehicles, and subsequently there is a banking and trading system.\177\
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\176\ ACT/ZEAS/ZEP Waiver Support Document at 31-32 (``As
described in the ACT regulation's rulemaking record, medium- and
heavy-duty ZEVs are currently commercially available . . . This
includes vehicles from companies such as BYD, Motiv, Phoenix
Motorcars, XOS, and others. Traditional manufacturers of heavy-duty
vehicles, including Freightliner, Kenworth, Peterbilt, and Volvo,
are currently demonstrating heavy-duty ZEVs in California, with the
intent to launch commercial products by 2024. 15 manufacturers are
offering more than 50 different ZEV truck and bus configurations,
other than transit buses, from Class 3 through Class 8 through the
Hybrid and Zero-Emission Truck and Bus Voucher Incentive Program
(HVIP). HVIP has provided funding for 2,456 zero-emission trucks and
buses and 2,593 hybrid trucks since 2010 to support the long-term
transition to zero-emission vehicles in the heavy-duty market. These
commercially available zero-emission trucks and buses cover a wide
variety of vocations and duty cycles; some vehicles available today
include delivery vans, school buses, refuse trucks, cutaway
shuttles, terminal tractors, and passenger vans.'').
\177\ Id. at 7-10
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Similarly, regarding the ZEAS Regulation, CARB noted that the
technology needed to produce zero-emission airport shuttle vehicles
currently exists.\178\ Finally, CARB also noted that the ZEP
Certification Regulation, requiring manufacturers to conduct energy-
capacity testing for batteries used in zero-emission powertrains,
presents no issues of technical feasibility because the specified test
procedure only requires use of commercially available test
equipment.\179\
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\178\ Id. at 33.
\179\ Id. at 34-36.
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In addition to showing that the required technology is already
commercially available, CARB noted that it appropriately considered the
cost of each of the regulations, including the incremental capital
costs as well as total costs of ownership (TCO) to potential vehicle
owners.\180\ CARB noted that its Staff Report for the ACT Regulation
included an estimate that the average incremental vehicle price for
certain new ZEVs would be 30 percent to 60 percent higher than a
comparable combustion-powered vehicle in certain years, with costs for
these vehicles declining over time. Further, CARB noted that it had
evaluated the TCO for purchasing an ACT compliant vehicle and all other
related costs including fuel, maintenance, Low Carbon Fuel Standard
revenue, and infrastructure, and noted that ZEVs in appropriate duty
cycles can see a positive TCO by 2024 or sooner and reported similar
TCO positive results for ZEAS by 2028.\181\ CARB also noted that
neither the ACT, ZEAS, nor ZEP Certification Regulations present any
issues of test procedure inconsistency because there are no analogous
Federal requirements and, as such, engines manufacturers are not
precluded from complying with the California and Federal test
requirements with one test engine or vehicle.\182\
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\180\ Id. at 36-38 (ACT), at 38-39 (ZEAS), and 39-40.
\181\ Id.
\182\ Id. at 39.
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3. Comments on Section 209(b)(1)(C)
EPA received a range of comments on each of CARB's regulations
relating to the third criteria. Regarding the ACT Regulation, EPA
received a comment that stated that the applicable technological
feasibility criteria to apply is found in section 202(a)(3)(A).\183\
This commenter maintains that CARB must demonstrate that the ACT
standards ``are achievable through reasonably available technology, and
must similarly consider related costs, energy, and safety factors'' and
that CARB cannot meet this obligation. This commenter notes two
separate studies regarding the current availability of electric and
hydrogen fuel cell medium and heavy-duty trucks, and that one of the
studies noted that electric trucks using present lithium battery
technology would need levels of energy density and battery storage
capacity to support a daily ranger of 600 miles at level that would
weigh 6300 kg and cost approximately $180,000. This commenter maintains
that CARB did not consider several factors including charging networks
as well as safety issues and legal restrictions on commercial activity
at rest stops. The commenter maintains that because these factors were
not considered by CARB then it does not meet the requirements of
section 202(a)(3)(A).\184\ EPA also received supplemental comment from
CARB that was submitted in response to comments submitted in opposition
to the waiver for the ACT Regulation. CARB noted that several comments
fail to satisfy opponents' burden of proof because they misunderstand
the necessary showing or make no showing at all.\185\ CARB also
recognized the challenges to the technical feasibility of the ACT
Regulation raised by one commenter but noted that no commenter has
disputed CARB's evidence that the technology need to comply with the
ACT Regulation already exists.\186\ In addition, CARB responded to
comments regarding ZEV constraints associated with operating ranges and
performance characteristics.\187\ Finally, CARB noted several
commenters' assertions that CARB failed to account for and accurately
assess a number of different costs associated with the ACT Regulation
(e.g., costs of manufacturing and maintaining ZEVs, battery replacement
costs, reduced operational hours due to needs to recharge, etc.) and
pointed to its rulemaking record and submissions to EPA that address
such claims. And in any case CARB maintained that these commenters have
not introduced evidence that establishes that the compliance costs as
so excessive as to make the standards infeasible.\188\
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\183\ Valero at 4. This commenter does not discuss the phase
``greatest degree of emission reduction achievable through
application of technology'' in 202(a)(3)(A)(i) and whether and how
it is related to its cited language regarding the consideration to
``cost, energy, and safety factors.''
\184\ Id. at 4-6.
\185\ CARB Supplemental Comments at 11. CARB noted both EMA and
WSPA comments that do not provide any elaboration of why the lead
time provided is not reasonable. ``[S]ection 209(b) does not give
[the Administrator] the latitude to review procedures at the State
level, and the EPA hearing is not the proper forum in which to raise
these objections. Similarly, objections pertaining to the wisdom of
California's judgment on various public policy matters are beyond
the [Administrator's] scope of inquiry.'' 43 FR 32184 citing 42 FR
44209, 44210 (October 7, 1976).
\186\ Id. at 11-12.
\187\ Id. at 12. (CARB's analysis found that although certain
market segments presented challenges, a large number of other
segments are well suited for electrification across the medium- and
heavy-duty truck market, including refuse trucks, yard trucks and
box trucks within the Class 8 vocational market. CARB expects that
the demand for heavy-duty ZEVs will significantly increase as ZEV
technology improves, resulting in increased operating ranges and
decreased vehicle prices.''). CARB also provided updated data and
noted recently enacted federal action.
\188\ Id. at 12-13 (Citing the ACT waiver request at 31-39, ACT
ISOR at IX-8, ACT FSOR at IX-23-IX-24, IX-27-IX-28, ACT FSOR at 105,
192, 204-222, 269-274 (respond to comments asserting that CARB did
not accurately assess cost impacts of the ACT Regulation).
---------------------------------------------------------------------------

Many of the comments EPA received on the third prong also focused
not on whether the standards under review were actually infeasible
under section 202(a)(2), but on whether CARB, to be consistent with
section 202(a), must provide the four years of lead time and three
years of stability for standards applicable to new heavy-duty vehicles
and engines required under section 202(a)(3)(C). Commenters objected to
the 2018 HD Emission Warranty Amendments and the ACT Regulation on the
grounds that the third waiver criterion requires ``consistency'' with
every provision of section 202(a) and therefore, by the text of the
statute, CARB must provide four years of lead time and three years of
stability for its new heavy-duty vehicle and engine

[[Page 20709]]

standards.\189\ In response, supporters of the regulations argued that
``consistency'' does not require identicality with lead time and
stability requirements imposed on EPA. Such a strict imposition, they
argued, would frustrate Congress' intent to give California flexibility
and deference to create innovative standards that are more stringent
than the Federal standards.\190\ Identicality also cannot be required,
they argued, because it would be impossible for certain sub-provisions
of section 202(a) to apply to CARB.\191\ In response, one commenter
argued that, even if some provisions of 202(a) are relevant only to EPA
and not CARB, ``consistency'' still requires CARB to abide by relevant
provisions, such as 202(a)(3)(C)'s lead time and stability
requirements.\192\
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\189\ EMA Initial Comments at 4-5, 6-7; EMA Supplemental
Comments at 1. NADA at 2; WSPA at 2.
\190\ See, e.g., CARB Initial ACT Comments at 17-18; CARB
Initial Omnibus Low NOx Comments at 9 (submitted as Exhibit 4 of
CARB's Initial ACT Comments); CARB Supplemental Comments at 7-8;
Environmental and Public Health Organizations at 22-24. EPA notes
CARB's contention that section 202(a)(3)(C) was designed with
specific purposes by Congress, and that such purposes were, in part,
to minimize the burden associated with new standards and the
associated new designs of affected vehicles and that in many
instances CARB's regulations do not require a redesign of existing
vehicles. (``The clear purpose of Section 202(a)(3)(C) is to protect
manufacturers with respect to specific EPA standards, from having to
perform redesigns without four years of lead time or more often than
every three years.'' But ``the year-on-year changes in the legal
obligations imposed by ACT are different from those imposed by more
traditional vehicle emission standards--the kind of standards
Congress had in mind when it drafted Section 202(a)(3)(C).'' See
CARB Supplemental Comments, 9-11 and CARB Initial ACT Comments at
19-22. As explained below, EPA finds its textual assessment of
202(a)(3)(C) to be sufficient to determine the inapplicability to
California and that it is not necessary to examine the underpinnings
of this aspect of CARB's argument.
\191\ See, e.g., CARB Initial Omnibus Low NO<INF>X</INF>
Comments at 16-17 (submitted as Exhibit 4 of CARB's Initial ACT
Comments); CARB Supplemental Comments at 7-8; Environmental and
Public Health Organizations at 20-21; ACT/ZEAS/ZEP Waiver Support
Document at 31-32 (citing the ACT FSOR at 131).
\192\ EMA Supplemental Comments at 4 (``Of course, all of the
provisions of section 202(a) are directed on their face to EPA, not
California, and that is no reason to distinguish one part of section
202(a) from another. Consistency means that CARB must abide by and
avoid contradicting those provisions that are relevant. CARB agrees
that it must abide by the technology lead-time requirement directed
at EPA in section 202(a)(2), and CARB must equally abide by the
four-year lead-time requirement in section 202(a)(3)(C) that is
directed at EPA in precisely the same way. Neither of those
provisions is uniquely applicable to EPA'').
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EPA also received comment that four years of lead time is supported
by Federal case law and EPA's prior waiver decisions. In particular,
one commenter noted EPA's 1994 MDV waiver decision document, which
found that CARB is subject to 202(a)(3)(C)'s four-year lead time
requirement.\193\ That decision considered the plain text and
congressional intent of the CAA as well as the 1979 D.C. Circuit case,
American Motors Corporation v. Blum (Blum), which incorporated a
specific minimum two-year lead time from CAA section 202(b)(1)(B) into
the 202(a)(2) general technological feasibility analysis. The commenter
explained that the D.C. Circuit in Blum ``found that the
Congressionally-specified lead time requirement was implicitly
incorporated into section 202(a)(2)'' and argues that Blum's logic
applies equally to section 202(a)(3)(C).\194\
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\193\ EMA Initial Comments at 3; EMA Supplemental Comments at 2-
3.
\194\ EMA Initial Comments at 7-9 (``The D.C. Circuit's
reasoning in Blum applies with equal force here: failing to apply
the minimum four-year leadtime requirement would frustrate the
leadtime that Congress explicitly found to be necessary for [heavy-
duty on-highway] standards.''); EMA Supplemental Comments at 2-3
(``In addition to the general technology-based lead-time required
for all vehicles and engines, section 202(a)(3)(C) is aimed
specifically at the heavy-duty industry, which is not vertically
integrated, involves much lower production volumes, is more capital
intensive, requires longer planning and product development
timelines, and requires longer time periods to recoup large capital
investments. See, e.g., Hearing on S.1630 Before Subcomm. on Env't
Protection, 101st Cong. 312-13 (1989). These considerations make
lead-time necessary regardless of whether it is EPA or CARB that
adopts the applicable standards with which the industry must make
investments to comply. Thus, as EPA rightly concluded in 1994, the
section 202(a)(3)(C) lead-time requirement is no different than the
lead-time provision at issue in Blum.'').
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4. California's Standards Are Consistent With Section 202(a) Under
EPA's Historical Approach
As explained above, EPA has historically applied a consistency test
under section 202(a) that calls for the Administrator to first review
whether adequate technology already exists, and if it does not, whether
there is adequate time to develop and apply the technology before the
standards go into effect.\195\ After a review of the record,
information, and comments received in this proceeding, EPA has
determined that the opponent

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